WASHINGTON, DC–(ENEWSPF)–September 11, 2014. In a letter to the CEO of Burger King, Daniel S. Schwartz, U.S. Senators Dick Durbin (D-IL), Carl Levin (D-MI), Jack Reed (D-RI), Bernie Sanders (I-VT), and Sherrod Brown (D-OH) today urged the company to reconsider its decision to turn its back on American taxpayers and consumers by taking advantage of a tax loophole called “inversion” which allows a company to move its headquarters overseas, but only on paper, in order to avoid paying U.S. taxes.
“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 Senators wrote..
“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.”
Durbin has been a leading voice in Congress against these inversion schemes, raising the issue in the face of a growing trend toward U.S. corporate tax avoidance. In August, Durbin led a letter to President Obama urging him to use his executive authority to reduce or eliminate tax breaks for companies that shift their headquarters overseas to avoid paying U.S. taxes. Also in August, Durbin wrote a letter to the CEO of Lake Forest, Illinois-based Hospira urging the company not invert.
Text of today’s letter is below:
September 11, 2014Daniel S. Schwartz Chief Executive Officer Burger King Worldwide, Inc. 5505 Blue Lagoon Drive Miami, FL 33126
Dear Mr. Schwartz:
In August you and the Board of Directors of Burger King announced an agreement to purchase Canada-based Tim Hortons and move its corporate address to Canada, which will allow Burger King to avoid paying millions in U.S. taxes. We urge you and Burger King’s Board of Directors to reverse your plans to invert and to weigh the long-term consequences this move, known as a corporate inversion, would have on a company that relies on U.S. taxpayers to profit and thrive.
Since the opening of the first store in 1954, Burger King has successfully built a reputation as one of America’s favorite fast-food restaurants with nearly 7,400 locations in the U.S. This success was only made possible through the work of Burger King’s U.S. franchise owners as well as thousands of American workers.
More than half of fast-food workers, including Burger King workers, depend on taxpayer-funded public assistance through programs such as Medicaid, the Children’s Health Insurance Program, or Supplemental Nutrition Assistance Program (food stamps). Public assistance for families of fast-food workers cost taxpayers nearly $7 billion per year, while your company posted $1.1 billion in revenues and $230 million in profits last year.
Further, Burger King relies on U.S. taxpayer-funded roads and bridges to deliver its products, safety inspectors to ensure the food it provides is safe for consumers, and a robust trademark system to protect its brand. 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. Additionally, Burger King has reportedly structured the deal in a way that will allow private equity fund, 3G Capital, which is Burger King’s largest shareholder, to avoid paying capital gains taxes once the deal is completed, taking even more money out of the pockets of U.S. taxpayers.
We believe you will find that turning your back on your loyal, U.S. taxpaying customers by renouncing your corporate citizenship is not in the best interest of Burger King or its shareholders. 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.
Perversely it will be your franchisees – small business owners who remain loyal U.S. taxpayers – that will suffer from your actions, while reaping none of the benefit from your decision.
We urge you and the Board of Directors to reverse your decision to move the company’s tax address overseas to avoid U.S. taxes. Surely, you and the board must recognize that a commitment to America would be good for Burger King’s bottom line.
Sincerely,RICHARD J. DURBIN, United States Senator CARL LEVIN, United States Senator JACK REED, United States Senator BERNARD SANDERS, United States Senator SHERROD BROWN, United States Senator
Cc: Board of DirectorsAlexandre Behring Bernardo Hees Martin E. Franklin Paul J. Fribourg Alan Parker Carlos Alberto da Veiga Sicupira Alexandre Van Damme Roberto Tompson
Senators Durbin, Schumer Introduce Legislation To Stem Recent Tide of Corporate Inversions By Limiting Earnind Stripping – Bill Would Curtail Major Incentive Causing U.S. Companies To Merge With Foreign Companies To Skirt U.S. Taxes