The Hamburger, a staple in America’s diet since the turn of the 20th century, does not seem so patriotic following the past weeks’ events. Burger King is in serious talks to buy Canadian coffee and doughnut maker, Tim Horton’s according to The Wall Street Journal. The deal is a tax inversion, which means Burger King will subsequently move its headquarters from Miami to Ontario, allowing them to save an estimated ten percent annually on corporate taxes. To add fuel to the fire, the distinguished American investor Warren Buffett, has organized the deal and will also see a large percent of profit from it, if finalized.
It’s no surprise that this potential move is leaving a bad taste in the mouth of the American government and public. ‘Boycott Burger King’ is now making its rounds on social media sites. A simple search of Burger King’s official Facebook page will find a comment section ladened with angry messages. Burger King released a statement on their Facebook page in regards to the public’s outcry stating “We hear you. We’re not moving, we’re just growing and finding ways to serve you better.” We as a nation find it easy to point fingers and lay blame, but this anti-American merger may ironically be our fault.
According to The Washington Post, since 2009, 35 other companies have taken the tax inversion route prior to Burger King. Why are all of these companies skipping out on calling the United States home? The answer is simple. Our government taxes companies more than of any other country in the world, an astounding 39 percent, according to the The Wall Street Journal. Furthermore, our government taxes international companies like Burger King on not only their domestic revenue within the United States, but their global revenue as well. Rule number one of any publicly held company is to maximize shareholder revenue.
A solution to this tax evading problem is far more complex than it seems. The first step is to challenge our government to propose new legislation against these steep taxes. Alex Hance, a Junior Information Systems major believes the Burger King deal highlights the need for a major overhaul to our tax system. “Since Burger King is a widely known consumer brand, this issue is finally being addressed by the media and public. We must now come up with a better solution to our tax structure because it is clearly not designed appropriately” Hance said.
In the coming weeks, Democrats and Republicans will begin debating this tax issue. According to John McKinnon of The Wall Street Journal, Democrats will begin proposing bills that “restrict companies from performing tax inversions, whereas Republicans will propose bills to see a comprehensive tax code rewrite”. Whatever the collaborated decision may be, we as a nation should redirect part of the blame from Burger King and use it to motivate a tax change within our government. Burger King does not have our nation’s best interest economically, yes. But our relatively powerful economy was founded on capitalism and if a company has the ability to increase profits legally, then they are allowed to do so freely. Let’s continue to show our patriotism, but let’s also make sure this does not become a more frequent issue.
Cameron Gildea can be reached at cameron.gildea@spartans.ut.edu