The uproar over corporate inversions continued this week with the news that Burger King would seek to reincorporate in Canada as part of their purchase of Tim Horton’s. By calling attention to the perversity of the US corporate tax code, companies like Burger King may finally compel Congress to act and move, hopefully, to a more pro-growth system. Boycott? I’m thinking of taking up junk food again. Hail the King!

All other OECD countries treat the profits of their companies’ foreign subsidiaries very differently, relying on the so-called “territorial” method of taxing foreign earnings. For example, a French firm that invests in Ireland pays the 12.5% Irish corporate tax but is then free to repatriate the after-tax profits with a tax of less than 5%.

America’s current tax system adversely affects the US economy in several ways. The extra tax that US firms pay if they repatriate profits raises their cost of capital, thus reducing their ability to compete in international markets. Foreign firms can also outbid their US counterparts in acquiring new high-tech firms in other countries. And when a foreign firm acquires a US company, it pays US tax on the profits earned in the US but not on the profits earned by that firm’s other foreign subsidiaries, thus lowering its total tax bill.

A shift to a territorial system of taxation would remove the disadvantages faced by American multinational corporations and encourage them to reinvest their overseas profits at home, increasing US employment and profits…

via Bringing It Back Home by Martin Feldstein – Project Syndicate.

Almost as delicious is the hypocrisy of Warren Buffet, who is funding a large portion of the transaction. Buffet’s two-faced approach to taxation is nothing new. Many on the left who bang the drum for higher taxes on the “rich” and corporations, are doing so from their private jets, their limousines, their mansions. I’m waiting for one of them to actually lead by example and renounce all of their wealth. I expect a long, long wait.

Mr. Buffett is no doubt aware of the tax implications of this deal, as he always is when investing his fellow shareholders’ money. Despite his public pose as an advocate for higher tax payments, he’s remarkably good at minimizing them for Berkshire. He recently cashed out his investment in Graham HoldingsGHC -1.40% former owner of the Washington Post, by executing a tax-free swap of assets.