The involvement of Warren Buffett—president Obama’s favorite billionaire—likely muted the criticism over Burger King’s purchase of a Canadian operation and plans to move its headquarters to Canada.
This will save Burger King a bundle, as Canadian corporate taxes are lower than ours. President Obama has called for “economic patriotism” to prevent companies from doing what Burger King is doing, and John Kerry once called such companies “Benedict Arnold companies.”
But that was of course before the Oracle of Omaha so publicly availed himself the Benedict Arnold solution.
Buffett famously has advised the president on tax policies, previously calling for the rich to pay more taxes—this is known as Buffett Rule, and it is dear to President Obama's heart.
So Buffett’s profiting by inversion doesn't fit with the image many have of the billionaire.
Market Watch columnist David Weidner explains that in the Burger King deal Buffett was simply sticking to the one rule he always follows:
In the end, for all of his folksy charm, the “Oracle of Omaha” is about as Wall Street as they come. Buffett has always been about a good investment and the intrinsic value of the brands and companies he buys.
Does this mean Buffett doesn’t care about taxes, wealth distribution or the economy? Of course not. It means he has held true to the core principles that made him and his investors the returns they’ve enjoyed for more than four decades.
In a quote attributed to him, he said: “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1.”
In financing Burger King, Buffett is simply following the rules.
Bravo for Mr. Buffett.
His shareholders will benefit, and more jobs will be created.
Buffett and his billionaire ilk love to advise the lesser folk on such matters as inheritance—Buffett likes to point out that he isn’t leaving his fortune to his kids and urge owners of mom and pop businesses to follow his noble example. He forgets to mention that–unlike Mom and Pop–he has the means to set up foundations to take care of his descendents for generations.
Buffett did the right thing with regard to Burger King, however—and more people will benefit from it than from the billionaire's crowd-pleasing words about how people like him should pay higher taxes.
Still, it is too bad that Buffett hasn’t been quite as vocal on the subject of profits (which are more essential to keeping an economy afloat) as he is on raising taxes.
But actions speak louder than words.