Burger King is getting whopped over its plan to avoid U.S. taxes by fleeing to Canada.
People flooded the fast-food chain’s Facebook page on Monday with threats of a boycott after the company announced talks to merge with Canadian coffee and doughnut chain Tim Hortons. The combined company would be headquartered in Canada.
Burger King is just the latest American company to attempt a so-called tax inversion -- where a bigger U.S. company buys a smaller foreign firm in a country with a lower tax rate, renounces its U.S. corporate citizenship and then reincorporates in the other nation. Politicians and pundits have said the moves amount to little more than unpatriotic ploys to avoid paying taxes. The corporate tax rate in the U.S. is 35 percent, the highest in the world. Canada's is about 15 percent.
"Move to Canada to avoid paying taxes and I will never darken the door of a Burger King again," Mike Gee, of Magnolia, Arkansas, wrote in a comment. "Does corporate greed in this country ever end?"
Radina Russell, a Burger King spokeswoman, declined to comment.
Taxes aren't Tim Hortons' only appeal to the Miami-based burger chain. The company sells a lot of coffee and doughnuts, and Burger King has struggled to compete with rivals McDonald's and Taco Bell in the fast-food war over breakfast. It's not clear how much the move to Canada would reduce tax costs on the combined company. But the deal would allow it to avoid paying double taxes on profits earned abroad, even though the company would still pay U.S. taxes on domestic sales.
