Posted on 08/03/2008 10:20:18 AM PDT by djsherin
Politicians and Wall Streeters are starting to ask why the Belgian beer company InBev purchased Anheuser-Busch and not the other way around. Anheuser-Busch is an iconic American firm and some find it almost unpatriotic that Anheuser CEO August Busch IV allowed the "King of Beers" to relocate across the Atlantic -- though shareholders were the big winners here with a $50 billion-plus takeaway.
But here's the real question: Was the takeover basically financed by the savings Anheuser expected from escaping America's increasingly uncompetitive corporate tax system? According to the Tax Foundation, Belgium's corporate tax rate is 33%, but the effective tax rate can be half the nominal rate thanks to adjustments for something the OECD calls a "notional allowance for corporate equity." Bottom line: InBev was paying around 20% of its profits in corporate taxes, compared to Anheuser-Busch's rate of 38.4%.
(Excerpt) Read more at online.wsj.com ...
Ah, Budweiser. What gives it that rich, golden color?
Yes, indeed once again Americas stupid tax laws drive off another business, even though they will still be here, they are not now American owned, makes a difference, at least to me, and look at the tax revenue the US lost on this deal.
...and on and on we go - taxing our way to prosperity </s>
On the other hand, we’re spending our way into the ground. Something’s gotta give.
I can’t count the number of times I’ve tried to hammer away at this issue on FR. All I usually get (and especially from the people most worked-up over foreign ownership of anything) is a collective shrug of the shoulders.
The income tax system is a mess. Why can’t WE be the ones to lure investment to the US?
FR has no influence on tax policy, but I agree with your position on it. If it did, you might get more than a shrug.
InBev is publicly traded. Anyone upset about Bud being Belgian owned can buy stock in InBev and become an American owner.
Bud is now Belgian managed, and owned by whoever holds stock in InBev, be they Belgian, Russian, Canadian, Japanese, or American.
It’s just frustrating, that’s all . . . our corporate tax policy creates the incentive for American companies to locate overseas, and people twist themselves into pretzels trying to stop American companies from locating overseas. We are treating the symptom and not the disease.
A giant vacuum has been left behind.... fill it with another American Beer. The King of Beers can only be American owned....
And the same thing will happen to Exxon and other oil companies if the dems pull their stupid “windfall profit tax” they are pushing now. Haliburton was the first and it will happen again.
They don’t keep them big horses around for nuttin’.
Well, if they'd put more hops in the feed, the beer would probably taste better.
One consideration here MAY have been that the parent company may no longer have to pay U.S. corporate taxes on the former Anheuser-Busch profits outside the U.S.
The weak dollar many times will elicit the same response from folks who are unaware that lowering the corporate tax rate and the capital gains tax rate (or at least indexing it to inflation) along with a little deregulation would dramatically increase the FX value of the dollar.
Time for the Fair Tax and these mergers will go the other way with America being a top corporate tax haven.
Augie Quad is a mental lightweight beside whom Al Gore looks like a Rhodes Scholar!
A-B got bought because of widespread stockholder dissatisfaction with poor performance.
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