Corporations can run away to Canada to escape Donald Trump…

… and also cut their tax bills substantially.

My Facebook feed is packed with people talking about emigrating to Canada in order to escape the prospect of President Donald Trump.

What about principled corporations? Burger King was criticized by advocates of Bigger Government for skipping out on “hundreds of millions of dollars in U.S. taxes” via a Canadian inversion (Reuters). Now that the specter of Donald Trump is stalking our land, could a corporation become Canadian and be celebrated by fans of a Bigger U.S. Government?

Ernst & Young says that the combine federal and provincial corporate tax rate in British Columbia, for example, is 26 percent (source). A successful Silicon Valley firm, such as Apple or Google, is theoretically subject to 8.84 percent California tax (flat rate says the Tax Foundation) plus roughly 35 percent in federal corporate tax (Wikipedia). Of course, Apple doesn’t actually pay this due to their “Double Irish arrangement” but not all firms can work this angle and, at some point, a Bernie Sanders-like figure might shut down the escape hatches.

Nearly every other country on the planet has lower corporate taxes than the U.S. Should we expect to see corporation emigration in 2016 under the banner of “We are morally opposed to Donald Trump?” This would allow a company to escape U.S. corporate taxes and also occupy the moral high ground in the eyes of all consumers except the minority who are passionate Donald Trump supporters.

8 thoughts on “Corporations can run away to Canada to escape Donald Trump…

  1. @Joe: Mexico’s corporate tax rate is 30%, so there’s nothing racist about it.

  2. Canada might not be the best choice of destination, but a morals-driven tax inversion might be just what they need.

  3. The entire reason these companies are opposed to Donald Trump is that he want so raise US tariffs. Well, that and he also wants to cut off their cheap labor supply. But he has talked about forcing Apple to manufacture in the US, not China.

    If Trump has a supportive majority in Congress, any relocating companies would find a tariff wall between them and the US market. If he doesn’t have Congressional support, he really can’t do anything with economic policies.

    There will come a point where corporations will have sucked the American consumer market dry and will just abandon it. Its a race as to whether this happens before, or after, they face a populist rebellion on the part of the same American consumers.

  4. If Donald Trump is elected President, the “minority who are Donald Trump supporters” might not be such a minority. Although granted, if Trump is elected, it will probably be because many voted against Hillary Clinton.

  5. I was expecting a Ted Cruz joke when I saw this title.

    Speaking of which, can’t you just tell them to vote Cruz? That’ll shut ’em up!

  6. Ole E: or that he mastered the teleprompter. He is a natural (or he has be practicing for a while). His speech at AIPAC made him sound presidential. Scary.

  7. Every election there are tons of folks that get emotional and say they will leave the country. Doesn’t matter if they are Dems or Repubs. The reality is that those same folks just end up being the most vocal whiners for the next 4 years. Corporate entities will actually review policy prior to leaving/changing their business model, as legislation does have it’s consequences.

    The response to 99.99% of your facebook feed is “I don’t believe you.”

Comments are closed.