Taxes

The Left's Ridiculous Burger King Freakout

The Burger King move isn't really about "inversion" anyway. This is a merger.

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Mike Mozart/Flickr

Burger King plans to merge with Canuck coffee-and-doughnut chain Tim Hortons and base the company's headquarters in Canada, where it will enjoy the kind of reasonable corporate tax structure that Democrats continue to obstruct here in the United States. And the move has provoked a fresh round of moral panic, faux patriotism, and confusion.

It's doubtful, despite much wishful thinking, that there will be much of a real backlash. Nor should there be. Most obviously, the majority of fast-food customers are probably less inclined than the petitioners of MoveOn.org to mistake high tax rates for patriotism. This kind of distorted understanding of national loyalty may work in populist politics, but not so much in markets. Few reasonable humans will meditate on Burger King's corporate tax "inversion"—or even its Brazilian owners—as they wait for the frozen french fries to be dropped into the deep-fryer.

The four best-selling cars in America so far in 2014 are the Toyota Camry, Nissan Altima, Honda Accord, and Toyota Corolla. One of the best-selling cellphone brands is South Korean. And so on. Does a Whopper taste like a Whopper? That's all that matters. And it's all that should. Nothing really changes for the consumer.

Even among those who do pay attention, there will very likely be many who don't believe that the purpose of a business is to placate the Obama administration or generate more revenue for government. The executive's charge is to grow and sustain a healthy business, which this deal almost unquestionably does. Stockholders? According to TheStreet, the Brazilian equity firm that controls the company may make more in one day with the acquisition of Tim Hortons than it paid Goldman Sachs (and others) for Burger King four years ago. Sounds like a sweet deal.

Obviously, there are people out there who believe that "tax avoidance" is wrong in theory. President Barack Obama wouldn't be harping on the issue and offering punitive legislation if the topic didn't poll well somewhere. Judging from Twitter and comments sections, plenty of misinformed Americans are under the impression that Burger King will stop paying taxes altogether; "inversion" companies are subject to U.S. tax rates on profits earned in America. It's the kind of ignorance that allows crass demagogues like Sherrod Brown (Burger King has "abandoned the United States"!) to do their thing.

The media have done their part, as well, treating a perfectly legal corporate decision that's been practiced for decades as a form of perfidy. Take a recent hit piece by Bloomberg. It "investigates" an entirely legal action by congressmen who "are invested in deals that Obama and other Democrats say are wrong and unpatriotic." Who knows? Maybe House Speaker John Boehner and Rep. Dave Camp (who, incidentally, had plenty of time to push reform themselves) are guilty of pre-crime, but maybe they just think it's "wrong" and "unpatriotic" to drive businesses out of the United States with a corporate tax rate that's the highest in the civilized world. But hey, our president has proposed ex post facto legislation for crimes against "economic patriotism." Let's criminalize behavior we don't like retroactively.

With all that said, the Burger King move isn't really about "inversion" anyway. This is a merger. Tim Hortons has a $9.9 billion market cap and generated more revenue than Burger King last year, so it seems implausible that the deal was made for reasons of tax sedition alone. When you merge with a company from another country, one that helps diversify your reach worldwide, it seems like a basic fiduciary responsibility to place your headquarters in the spot that offers you the best business climate. And though Burger King's move won't save much in the immediate future, it seems that choosing Canada makes sense.

And that's probably what's driving a lot of the overwrought reaction to this merger. The consequences of high corporate taxation could not be more apparent. If Burger King is willing to "leave" the country, it won't matter how much hyperbole Democrats throw around; other established American brands will do the same. It's certainly possible that the left will generate enough of a racket to persuade the fast-food giant to surrender on inversion. But as we've seen, most companies can't be shamed out of making the right decision.

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77 responses to “The Left's Ridiculous Burger King Freakout

  1. On Burger King ‘avoiding’ paying their ‘fair share’:But it’s okay for John Kerry to avoid paying Massachusetts taxes on a yacht he purchased by passing it through Rhode Island I believe it was (?) though, eh?

    Another way politicians avoid paying their own ‘fair shares’ is by investing in municipal bonds.

    They all look for loopholes and breaks. It’s just that the left and Democrats (and same crap up here in Canada) are bigger hypocritical assholes about it.

    1. You just want all the Whoppers. YOU CAN’T HAVE OUR WHOPPERS.

      1. I hate Burger King.

        Of the chains, I prefer Wendy’s or Five Guys.

        1. Not enough mayonnaise on the fries?

        2. Wendy’s then BK for me. Never been to Five Guys yet.

          I tweeted Sherrod Brown that I’ve already been boycotting BK since the Double Whopper w/cheese pushed $6, but I’d gladly go back if they got the price under $5.

          Brown seems to think that the company exists to fund the government (and provide it’s employees with health care and a living wage)

          1. We all exist to fund the government. Are you not of the body?

            1. Great Star Trek TOS reference!

              1. Thank you!

            2. Excuse me, but what is Star Trek?

        3. My own 600 gram inside-out chipotle cheeseburger with fried onions and mushrooms beats them all. We don’t need no stinking buns, but lots of my favorite vegetable- Heinz ketchup (sorry, GOP).

    2. Forget Kerry. The Kennedys have $billions stashed in Fiji on which they effectively pay zero taxes on.

  2. We aren’t supposed to recognize titles of nobility in this country anyway.

    1. IF that’s the case, why do they keep making all these new czars?

      1. why do they keep making all these new czars?

        Because people are so stupid they don’t know what czar means?

        1. Because ‘Oligarch’ has too many syllables…

          1. I think baron would be more appropriate. A czar is accountable to nobody. A baron is accountable to his liege lord.

            The Climate Baron.
            The Drug Baron.
            The Energy Baron.

            That works.

            1. And the Beer Baron

              1. I’ll drink to that!

              2. I prefer overlord.

            2. The problem with barons is they get all uppity and then you end up with a Magna Carta.

    2. “Governor” Palin, “Speaker” Gingritch, and “Congressman” Weiner agree.

      1. Do you know what “nobility” means?

        1. Obviously not.

        2. the group of people belonging to the noble class in a country, especially those with a hereditary or honorary title.

          Yes, I do.

  3. The United States Tax Code was designed to be gamed. Don’t hate the player.

    1. I take issue with your use of the word “designed”. I would say it was accreted.

      -jcr

      1. Excreted is better.

        1. defecated

  4. We are getting to the point where multinationals with significant overseas income are going to have a fiduciary duty to exit the US. There’s a fabulously lucrative shareholder suit waiting to be filed, holding corporate directors responsible for NOT doing something that is hugely beneficial to the company and its shareholders.

  5. I am sure that there are leftists out there wistfully wishing that a corporation that they actually patronized would do something they could argue against.

  6. For a while, Tim Horton’s was owned by Wendy’s. Then it was spun off and incorporated in Delaware. Then Tim Horton’s re-incorporated as a Canadian company.

    So this basically isn’t even news, it’s more like a repeat.

    1. What I’d like to see is Dunkin Donuts or some other competitor come to Canada and break the Tim’s monopoly. It’s ridiculous to have ONE choice for doughnuts.

      Alas, it’s Canada. We don’t like too much choice because…America and it’s impolite.

      Dunkin’ was basically ran out of town in Canada. Wonder if the muscle provided to Tim’s by Wendy’s had anything to do with it. If memory serves me right, that’s when Tim’s really took off. I could be wrong.

      1. Tim’s monopoly

        Ever hear of French-Canadians?

        Tim Horton has competition.

        Note: Canada’s Dunkin Donut website is in french…and has a picture of hockey on its home page.

        Why do i i have the urge to strangle our resident Canadian neocon right now?

        http://www.dunkindonuts.ca/

  7. Ridiculous. All he’s missing is a tin foil hat and shnotts hanging from his nose.

    You don’t mix a square pattern with cross-patterned (diagonal) ties while adding a shirt with more squares. With a suit like that a solid colored shirt (white, light pink etc.) or striped lightly, with a dotted tie or one with simple indiscreet patterns is more appropriate.

    As it stands, there’s no contrast but more importantly it’s retarded…wait…never mind. It’s perfect for him.

    1. FUHHHH! Twice I mispost in the wrong thread!!!

  8. Ahem. It’s not your fucking money.

    1. That’s for a judge to decide..

      1. NO, that’s for Obama to decide.

  9. What does David Harsanyi think about “the libertarian moment”?

    He ought to write about that here.

    1. The Millenials may be down with pot, ass sex and Mexicans but, unlike Reason, Harsanyi doesn’t seem to think that’s enough:

      http://thefederalist.com/2014/…..t-arrived/

      1. You Know Who Else was an immigrant who joined a foreign army, had gay supporters, took drugs, defeated the established political parties, was supported by the youths and opposed US foreign policy?

          1. That was the xxx rated version and his name was Dildo Baggins.

            1. You got that half right. His name was Dildo Bugger.

              That’s BORED OF THE RINGS for those who haven’t had the luck to run across it.

        1. Paul atreides?

        2. Adolf Hitler?

          1. Is this a trick question?

  10. Where the hell is shrike when you want him.

    Love to hear his bat shit insane response to this and Buffet’s involvement.

    1. Corning|8.29.14 @ 5:37PM|#
      “Where the hell is shrike when you want him.”

      Where I want him is jammed into the septic tank with the lid back on.

  11. I had my first Whopper in close to a decade last week… utterly insipid crap. And I say this not as a food snob but someone who eats at Wendys and McD’s once in a while.

    1. BK used to be better. Remember the chicken whopper? It was awesome, but that was a long time ago.

      1. I liked the long chicken sandwiches more than the Whopper back when I ate there regularly, but remember the Whopper tasting a lot better than blackened sawdust then.

    2. BK has good milkshakes and that’s about it.

  12. Progressives are always talking about how they fear corporations and hate their executives.

    Shouldn’t they be happy when a corporation decides to leave?

    1. Oh who the hell is this John Galt dude anyway?

    2. They go crazy when anyone (or thing) “defects”.
      I love it.

    3. They are spoiled children. Daddy is supposed to give them what they want and never, ever come in their room or tell them when to be home. When Daddy up and says keep the house kiddo, I’m getting a place somewhere else and good luck to you they freak out because now where is the money gonna come from? They don’t know how to make it.

    4. Well, yes. But they want the MONEY to stay in the US.

      1. Not only that, they want the money made in other countries be brought back to the US so they can tax it.

  13. Subservient Chicken will fit right in in Canada.

  14. You know what pisses me off? When *analysts* say, “Tim Horton’s is UNDERLEVERAGED.”

    Not having a huge debt overhang is bad. Good grief.

    1. You have a patriotic duty to borrow and spend in order to appease the animal spirits. Otherwise, we have to burn you as a witch hoarder.

      1. There’s the television. It’s all right there – all right there. Look, listen, kneel, pray. Commercials! We’re not productive anymore. We don’t make things anymore. It’s all automated. What are we *for* then? We’re consumers, Jim. Yeah. Okay, okay. Buy a lot of stuff, you’re a good citizen. But if you don’t buy a lot of stuff, if you don’t, what are you then, I ask you? What? Mentally *ill*. Fact, Jim, fact – if you don’t buy things – toilet paper, new cars, computerized yo-yos, electrically-operated sexual devices, stereo systems with brain-implanted headphones, screwdrivers with miniature built-in radar devices, voice-activated computers…

        1. What the fuck is a duvet?

  15. Two more lefties aghast at a company OBEYING TAX LAW!

    “David Sirota: Microsoft Admits Keeping $92 Billion Offshore to Reduce Taxes”
    http://dianeravitch.net/2014/0…..uce-taxes/

    1. This is akin to a hold-up man bitching because you didn’t take out the maximum from the ATM before he mugged you. You need to clean out your account so Obama can take it.

    2. These are the same people who were pissed off when AR-15 manufacturers redesigned their weapons to comply with the AWB.

      They really, really don’t understand the incentives created by legislation.

  16. Let’s criminalize behavior we don’t like retroactively.

    Well, don’t give them any ideas!

  17. I hope I never see another Burger King. That suff is as nasty or worse than McDonalds. If you want a decent burger fast, at least go to Wendys, or much better, Five Guys.

    1. Five Guys has good burgers but I could do without their lunchbag-size serving of fries. I tend to just bring in a bag of chips when I go to eat there.

  18. BK has slipped of late. I don’t know what’s changed, but not as good as it used to be (unless it’s absolutely fresh – then it’s still pretty good).

    I’m definitely eating more Wendy’s, and moreso Arby’s. Love just a plain ol’ roast beef sammich. Bun, meat – GOOD!

  19. Politicians view businesses as a source of jobs & tax revenue. The products, services & wealth they create is an annoying side effect.

  20. The corporate tax is lower in Canada but the minimum wage is higher. The lesson the left should learn from this is if you lower taxes, you can pay your employees more.

    1. “But if the the employees get more money, they won’t need us”-any politician

    2. Or you can hire a better class of worker for a comparatively higher salary.

      If the US were to go crazy and mandate a $15/hr wage for McDonald’s employees, a lot of people on the NYC “living wage” picket line would be in for a rude awakening when they get fired and replaced by better educated, less obnoxious whose labor might actually be worth $15 an hour to their employers.

    3. Multiple steps of thinking is not really their thing. Their philosophy is “if we charge more, we get more money!!”

      They’re like the guys who think there’s only one place to get shoes and pay the extra 50 dollars because of their lack of awareness. Or mindfulness.

  21. Curious note: wondering if Canadian tourists in the US will start hitting up Burger Kings out of Canuck pride?

    Or: Canadian Bacon breakfast sandwiches will slowly takeover.

    Maybe BK will use real maple syrup now?

    Why do the Democrats hate Canadians? You’d think they’d be happy with this…

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