Burger King’s merger with Tim Hortons could prompt tax fight in Congress
08/27/2014 12:32 PM
08/27/2014 12:47 PM
Burger King’s purchase of the Canadian doughnut chain Tim Hortons is raising new questions of whether Congress will respond by changing corporate tax laws.
Democratic Sen. Carl Levin of Michigan said Burger King, based in Miami, is “renouncing its U.S. citizenship” and provides another example of why Congress must intervene “to put a stop to tax dodging.”
“If this merger goes through, there could well be a strong public reaction against Burger King that could more than offset any tax benefit it receives from a tax avoidance move,” Levin said in a statement.
Critics say the deal illustrates the danger posed by corporate “inversions,” deals that allow large corporations to merge with smaller foreign companies and then shift their corporate residences out of the country as a way to avoid taxes.
Last month, the White House estimated that inversions could cost the U.S. as much as $17 billion per year. President Barack Obama is among those who want to close the loophole, saying the lost revenue could be spent on job-training programs.
Some are calling for a boycott of Burger King.
“Burger King’s decision to abandon the United States means consumers should turn to Wendy’s Old Fashioned Hamburgers or White Castle sliders,” Democratic Sen. Sherrod Brown of Ohio said in a statement. “Burger King has always said ‘Have it Your Way.” Well, my way is to support two Ohio companies that haven’t abandoned their country or customers.”
Brown called for the creation of a global minimum tax as a way to close offshore tax havens and eliminate incentives for companies to move.
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