(photo: Anne-Christine Poujoulat/AFP/Getty Images)
27 August 14
ne
of America’s largest, most iconic fast food chains is now risking its
entire brand on a tax dodge that a majority of Americans view as greedy
and unpatriotic. Even though Burger King’s recent $11 billion purchase of Canada-based Tim Horton’s has already gone through, the 800-pound gorilla in the room is Burger King’s consumer base. And it appears that gorilla is already moving on to other feeding grounds.
In acquiring Tim Horton’s, Burger King is using a tax
dodge called “inversion” in which it renounces its U.S. citizenship to
pay Canada’s 15 percent corporate tax rate. Burger King admitted
on its own Facebook page that its headquarters would still be in Miami,
and that Tim Horton’s would remain an independent brand. Burger King’s
workers would still remain in America, as would the majority of Burger
King’s restaurants and revenue. Inversion is simply an accounting
loophole that forces U.S. taxpayers to foot Burger King’s multi-billion
dollar tax bill.
Wealthy shareholders, many of whom are executives who
own stock options, would fatten their pockets with bigger dividends, and
U.S. taxpayers would see more budget cuts to public services as a
result of the drop in Burger King’s tax revenue. Both Burger King and
Tim Horton’s saw their share prices increase with the announcement of
the acquisition. A handful of rich people win. The people lose.
One oft-quoted statistic is that at 35 percent,
America’s corporate tax rate is the highest in the world. But when
accounting for all of the loopholes, credits, and deductions that
American corporations take advantage of, the U.S. is revealed to be an incredibly low-tax country for corporations.
The U.S. raises just 2.1 percent of its total tax revenue from
corporate taxes in relation to total GDP, compared to Canada’s 2.5
percent. And compared to other Organization for Economic Cooperation and
Development-affiliated (OECD) countries, the U.S. has the 5th lowest
effective corporate tax rate at 13.4 percent. Canada’s effective
corporate tax rate is 14.5 percent. Even though Canada has a lower
corporate tax rate, there are far fewer loopholes to take advantage of
in the tax code, equating to a greater overall share of tax revenue for
Canada’s public services, like universal health care.
And even though the U.S. has, on paper, the highest
corporate tax rate, everyday individual taxpayers, like Burger King’s
customer base, foot most of the tax revenue for public services. Yet,
while Canadians are overwhelmingly satisfied with their taxpayer-funded
health care system, Americans get remarkably shoddy services
in return for paying most of the taxes. The World Health Organization
has ranked our health care system, which is the only for-profit,
market-based health care system in the world, as the world’s most expensive and inefficient.
American college students are expected to go decades into a debt for a
college degree, while European college students get a relatively free
higher education in exchange for paying taxes. Other countries with
lower corporate tax rates than ours also enjoy a vast social safety net
like a retirement cushion, stable childcare services, paid sick and
paternal leave (paid maternal leave goes without saying), and many other
benefits. If corporations actually paid a 35 percent tax rate, we would
have more than enough revenue to provide all of these services and more
to American taxpayers.
Walgreens had planned to undergo inversion to avoid
taxes, but blowback from customers scrapped that deal. Judging from
Burger King’s awkward PR responses on Facebook and Twitter, the company
is feeling the heat from angry customers. A petition targeted at Burger
King customers garnered more than 50,000 signatures in just 24 hours, with customers promising to boycott the restaurant unless the company’s board of directors reneges on the deal.
Burger King’s inversion move is a slap in the face
to the customers who make their billion-dollar profit margins possible,
and to the country that allows them to make those profits.
Taxpayer-funded meat inspectors make sure Burger King’s beef is safe to
eat. Burger King pays its workers so little that they can’t afford
health care and food for their families on their meager salary, so
taxpayer-funded Medicaid and WIC programs pick up their slack. Burger
King gets its ingredients trucked in on taxpayer-funded roads. And in
return for all of these services provided by American taxpayers, Burger
King won’t even pay the American corporate tax rate.
Burger King’s executives and shareholders might see a
short-term benefit from the Tim Horton’s acquisition, but their greed
will hurt them in the long term. Restaurant market research has shown
that Americans are overwhelmingly fed up
with mediocre burgers from fast food joints like Burger King. Dodging
taxes on top of making sub-par food may just be the nail in the coffin
for Burger King’s future as a fast food chain.
Carl Gibson, 26, is co-founder of US Uncut, a
nationwide creative direct-action movement that mobilized tens of
thousands of activists against corporate tax avoidance and budget cuts
in the months leading up to the Occupy Wall Street movement. Carl and
other US Uncut activists are featured in the documentary "We're Not
Broke," which premiered at the 2012 Sundance Film Festival. He currently
lives in Madison, Wisconsin. You can contact him at
carl@rsnorg.org, and follow him on twitter at @uncutCG.
No comments:
Post a Comment