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Tuesday, 26 August 2014 07:26

Burger King's Big Whopper: It Will Incorporate in Canada to Evade US Taxes

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aburgerking(Photo: rob_rob2001)Burger King will, according to the Los Angeles Times and other news outlets, abandon its US corporate citizenship in order to legally evade US taxes. This is a process the largest drugstore chain in the United States, Walgreen, was considering earlier this summer, as recounted in a BuzzFlash at Truthout commentary, "Unpatriotic US Corporations Increasingly Move Headquarters Overseas to Decrease Taxes."

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Walgreen, after an onslaught of critical reactions to its plans, decided to maintain its world headquarters in Deerfield, Illinois. Burger King, however, is going ahead and flipping its incorporation to Canada by acquiring and then becoming a subsidiary of the Canadian fast food restaurant chain, Tim Horton's. This process is allowed by US law and called a corporate inversion.

The Los Angeles Times writes of the motivation for the move by the fast food hamburger franchiser: "The combined federal, state and local corporate tax rate in Canada is 26.3%, according to the Organization for Economic Cooperation and Development. The combined U.S. corporate rate is 39.1%."

A backlash is brewing among some members of Congress who hope to make inversions illegal:

Sen. Sherrod Brown (D-Ohio) urged Congress to act quickly to stop offshore tax shifting and called for a boycott of Burger King.

"Burger King has always said ‘Have it Your Way,'" he said. "Well, my way is to support two Ohio companies that haven’t abandoned their country or customers."

"Burger King’s decision to abandon the United States means consumers should turn to Wendy’s Old Fashioned Hamburgers or White Castle sliders," Brown said Monday after news of the potential deal surfaced.

Given the current pro-corporate majority in Congress, it is unlikely, however, that any legislation will be passed in the near future outlawing inversion and the evasion of US taxes. Senator Brown is to be commended in his effort, but unfortunately, it appears Burger King will indeed have it its way when it comes to abandoning corporate citizenship.

Of course, people in the US can still make personal choices to resist corporate betrayal. One option is to become vegetarian: It's a healthier lifestyle, and has the added advantage of teaching corporations who use the US for profits - but flee it for lower taxes - a lesson.

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