Burger King (NYSE:BKW) – Tim Horton deal – market diversification or tax inversion? Should Buffet be called a hypocrite for backing it?

The fact that Warren Buffet is backing the Burger King (NYSE:BKW) – Tim Horton deal suggests that his support is more for the sake of tax inversion than for market diversification. Burger King (NYSE:BKW) is on the verge of joining corporate expatriates with its new headquarters of the combined company in Ontario.

According to Senator Sherrod Brown, with Burger Kings (NYSE:BKW) exit from the U.S, consumers are left with White Castle Sliders or Wendy’s to satisfy their hamburger cravings. Sherrod isn’t too pleased with the fast food chain for leaving its homeland to pursue other options.

Obama, President of the U.S also agrees with Sherrod when he announced last month that even though inversions are legal, they are completely wrong. He believes that moves such as the one made by Burger King (NYSE:BKW) do not go in favor of country’s finances and ends up increasing deficit. These loopholes in tax laws are wrong and companies should not have the choice to pick their own tax plans.

It would be interesting to see if Obama would take any action against Buffet by going against tax inversion; the question is will he really take any action at all?

Most of the critics are of the view that not only an inversion is wrong but financing an inversion is equally wrong.

Critics do not shy away from calling Buffet a hypocrite who stresses upon the fact that wealthy members of the society should pay their taxes and then goes on to finance a tax inversion himself. Joe Scarborough, MSNBC host reported that Buffet has to explain his actions. Mike Brzezinski, MSNBC co-host, agreed to this by saying that Buffet’s deal doesn’t go well with his preaching.

However, it should not be forgotten that over the years, Buffet has always supported changing tax laws and not corporate or personal voluntary changes in tax. In his last year’s statement, he said that he wouldn’t pay a dime more than he owes in both corporate and individual taxes.

Therefore, his message can be a little shaky on what he actually has to say about these tax regimes.

Buffet’s actions may be justifiable after all, which individual would want to pass up a tax benefit even after knowing its economic utility and public purpose.

It’s perfectly fine to abide by state laws as well as try to change them simultaneously. A person must pay tax as an obligation to play a role in the betterment of the nation.

Tax isn’t a gift that you give to the government; it is something that is used for the betterment and progress of the entire nation; however if the government doesn’t ask you to pay taxes then you are not obliged to pay it.

Therefore, it may be wrong to call Buffet a hypocrite as he knows what is required by him from the society. His actions can’t be judged to be hypocritical because he has never backed down from saying that the society should be allowed to ask him and other like him to do more.