It looks like the fast food chain,
Burger King was in the news again last week. After a sizable contingent of
their employees (along with those employed by McDonald's and Wendy's) walked off the job last May in protest of low
wages http://www.reuters.com/article/2014/05/15/usa-restaurants-strike-idUSL1N0NZ2BE20140515, now it seems they are drawing fire
for their proposal to move company headquarters Northward in what appears to be
a tax-saving maneuver http://www.businessweek.com/articles/2014-08-25/burger-king-looks-to-ride-coffee-boom-save-on-taxes-by-acquiring-tim-hortons.
This controversial strategy, which
has come to be known as tax inversion, is nothing new to corporate America, but
it has accelerated under the Obama administration as policies during that
tenure have shifted towards forcing corporations to pay their fair share. The medtech
giant, Medtronic shed its U.S. tax burden in 2013, by moving to Ireland. Chiquita
Brands as well as U.S. big pharma corporation, Perrigo made similar moves to
the UK, both within the last eighteen months.
These aren't outright pick-up-stakes
and get outta Dodge tactics. No, the companies in question are smarter than
that. Tax inversion works, instead by acquiring a company based in another
country and, as a result taking advantage of the best (and avoiding the worst)
in both countries by relocating their apparent home base to whichever of the
two is most advantageous to them.
In the case of Burger King, this
"move" (most of the company's executives will remain in the U.S.) was
signaled by the burger-maker's announcement that it intends to acquire Canadian
coffee and donut chain, Tim Hortons, and subsequently to redub Tim Hortons
headquarters in Ontario, the new "Home of the Whopper."
Over the course of the days to
follow , the Obama administration reiterated its condemnation of such fiscally
evasive tactics, and Facebook was buzzing with redoubled cries calling for a
countrywide boycott against Burger King in protest to their removal of revenue
from the ledgers of the United States tax base. Burger King and its apologists
have, and will continue to trot out the usual rhetoric: "the dangers of
interfering with the free market...BK is only doing what is necessary to remain
competitive...lack of tax incentives domestically, etc...."
But, that particular dog and pony
show is losing its luster. In the information age it isn't hard to find the
exact dollar amount BK made last year (2013 Revenue $1.15 billion; net profit
$233.7 million), and armed with that information, American taxpayers are having
trouble foreseeing buying what Burger King is selling in more ways than one.
While the company makes moves to increase their already hefty profits, they
continue to pay below a living wage to a great many of their workers, which in
turn forces many of those same employees to seek federal assistance in order to
survive. This allows Burger King (as well as many other like-minded companies)
to rely upon our tax dollars to make up the difference towards what BK refuses
to provide. We are, in effect, subsidizing their payroll.
Now, as they ready themselves to migrate
North to cheaper climes, they are expecting us to continue to chip in to that
same subsidy, and to add insult to injury, Burger King is taking their tax
money with them, shifting even more of the burden within that subsidy onto the
American taxpayer. Thus, we are being taxed two times so that Burger King can
grow its profit margin.
It isn't hard for me to uphold a
Burger King boycott. Since I don't eat that crap anyway, I could easily enact a
lifetime ban. As for the public at large it seems, unfortunately, that there is
often a motivational inner conflict or a lack of long-term stamina when it
comes to making these big corporations squeal. Fast food has always been overpriced
anyway, when we weigh cost and potential nutritional value against damage to
the population as a whole...that is, unless you are a BK stockholder.
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