US lawmakers are keen to prevent the fast food giant Burger King from taking advantage of lower tax rates in Canada, arguing that it is ‘unpatriotically’ moving its operations there after “profiting” from taxpayer-funded benefits in the US.
In August, the Whopper-maker announced its plans to buy Tim Hortons, Inc. – a Canadian coffee and donut chain – and move its operations to take advantage of Canada’s lower tax rates. The additional benefit of the Canadian tax system is that companies do not pay extra taxes on income earned abroad.
But this move, a so-called “tax inversion,” is a one of a growing trend among corporations keen to avoid the 35 percent corporate tax rate in the US, and it is facing the ire of Washington lawmakers.
A group led by Democratic Senator Dick Durbin (Ill.), wrote to the company CEO to remind him how the corporation benefits from government largess through taxpayer funding with its use of roads, food safety inspectors, wage supplements through food stamps, and healthcare through Medicaid.
“Now, after profiting from these taxpayer-funded benefits, Burger King intends to move its tax address overseas to avoid paying its fair share for these benefits,” the group said in the letter, viewed by Reuters.
“Many of your loyal customers may choose to spend their hard-earned money at one of your many competitors, instead of supporting a company that wants all the benefits of America but refuses to pay its fair share to support our nation,” lawmakers said, calling the move “unpatriotic.”