Do You Want Some Hogwash with That Burger?
By Jim Hightower
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 buy out, 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.
– Jim Hightower is a radio commentator, writer, and public speaker. He’s also editor of the populist newsletter, The Hightower Lowdown.
