Monday, August 25, 2014

Burger King Relocating To Canada To Dodge Taxes

Damn socialist Canada with its... lower taxes. AP: "Burger King is in talks to buy doughnut chain Tim Hortons and create a new holding company headquartered in Canada, a move that could shave its tax bill. Such an overseas shift, called a tax inversion, has become increasingly popular among U.S. companies and a hot political issue. Burger King was founded in 1954 with a single restaurant in Miami, where it is currently based. Shares of Burger King and Tim Hortons both jumped 17 percent before the opening bell, heading toward all-time highs. In a tax inversion, a U.S. company reorganizes in a country with a lower tax rate by acquiring or merging with a company there. Inversions also allow companies to transfer money earned overseas to the parent company without paying additional U.S. taxes. Companies like AbbVie, a pharmaceutical with its headquarters just outside Chicago, have tied up with companies overseas to achieve that type of tax cut. More recently, Walgreen backed away from such a plan under intense pressure and criticism at home." [AP]

Lawmakers are already calling for boycotts of Burger King and its freedom fries: "Sen. Sherrod Brown (D., Ohio) was the first lawmaker to call for a boycott of Burger King Worldwide Inc., telling customers to shop elsewhere given the company’s pursuit of an acquisition that could allow it to avoid or curtail U.S. taxes. Burger King is in talks to buy Canadian coffee-and-doughnut chain Tim Horton’s Inc., and the new company would be based in Canada, if the deal if finalized. The deal would be structured through a so-called inversion, which would reduce the taxable income paid by the new parent company. Democrats and the White House are trying to design ways to deter these transactions, which have become more popular in recent months, but they have been unable to reach a bipartisan agreement. Mr. Brown, in a press statement on Monday, called on Americans to protest the possible deal with their wallets. Or, in this case, their stomachs." [
WSJ]

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