A sneaky tax dodge is driving the
Burger King-Tim Hortons merger.
Burger
King bills itself as “home of the Whopper,” a name intended to convey to burger
eaters that this one is a whale of a deal. But “whopper” also means a
prevarication, a crock, a tall tale — hogwash.
Both
meanings apply to Burger King’s current effort to take over Tim Hortons, a
Canadian coffee-and-doughnut chain. The $11 billion
price certainly is a whopping big one — the most ever paid to buy out
a fast-food purveyor. And the deal would cook up a massive corporation, with
18,000 restaurants in 100 countries, making about $22 billion in annual sales.
But the
deal is clearly a whopper in that it’s based on a con. While Burger King’s CEO,
Daniel Schwartz, offers some credible business reasons for the combine, what he
doesn’t want BK’s American customers to ponder is the clincher in the deal: It
gives his corporation a huge tax dodge.
In U.S.
tax law, something called an “inversion” is a loophole allowing an American
corporation that merges with a foreign one to reincorporate in the foreign
country — and shirk its tax responsibilities to our nation. It’s really a
perversion of the law.
Schwartz
intends to do just that, renouncing Burger King’s U.S. citizenship so it can
get a lower tax rate as a Canadian citizen. Schwartz & Co. would still be
headquartered in Miami, Burger King would still haul in billions of dollars in
sales from its U.S. outlets, and its top executives would still enjoy all the
benefits that the USA affords them — but potentially without putting a
corporate dime into our national treasury.
Why should
we buy this whopper? There are plenty of places to buy a burger, so you don’t
have to spend your dollars at the one that says it doesn’t want to be a U.S.
citizen.
If Burger
King won’t support America, Americans shouldn’t support it either.
OtherWords columnist Jim Hightower is
a radio commentator, writer, and public speaker. He’s also editor of the
populist newsletter, The Hightower
Lowdown. OtherWords.org
