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Should We Boycott Burger King for Avoiding Taxes?

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The other day, I got some coupons from Burger King in the mail. Typically, I give them one look and discard them.

Why? Most of the time they require the purchase of fries and a drink. I have trouble looking at that without thinking, "Hmmm, fried starchy carbs and sugary or chemically drinks at extremely high margins."

This time, there were a couple of items of interest, some buy one get one free breakfast sandwiches. These, of course, are not a pillar of health, but at least there's significant protein. With the coupons they would be reason.

I mentioned it to my wife and she was not interested. Instead she cited the recent news regarding Burger King.

By now, you've probably read of Burger King buying the Canadian company Tim Horton's. It seems that everyone has come to the conclusion that it has done so to legally move its headquarters to Canada and avoid paying US taxes.

A couple of days later, I mentioned that the idea of boycotting Burger King could make for an interesting article. She doused it a bit by bringing up the points that it was already extremely low on her list of places to eat. She doesn't like the food (save the Italian chicken sandwich) and the health topic has already been addressed. I'm more tolerant of the food's taste, but even so, I only visit it about once a year.

I'm sure Burger King is trembling at the thought of losing $7 a year of revenue from us.

Tossing that aside, should we boycott companies that make moves like these? I consider myself a very Patriotic person and my instinct is to say, "Hell Yeah!"

When I think about it more, I'm not so sure. Burger King has a responsibility to its shareholders to maximize profits. If taking advantage of legal tax codes allows it to do that, is that so terrible? I haven't met anyone who has said, "I like to pay more taxes for the good of my country, so I'm not going to take advantage of my 401K/Roth IRA."

If Burger King doesn't take advantage of these legal tax codes should we chastise them for not maximizing profits for its shareholders?

Sometimes I think big moves like this are needed to fix a broken system. Perhaps the United States government should take a look at this and ask, "Is our tax code effective if companies are effectively trying to buy their way out of country? What can we do to make the system better?"

I'm not sure what the answer is there. I'm not a tax expert and when it comes to corporate taxes, I admit to being particularly ignorant. However, perhaps if the majority of taxation was shifted towards sales tax at the point of purchase, it would matter less where a company's headquarters is located.

It's rare where I can see sympathize with both sides. Readers know that I tend to have strong opinions. If it wasn't obvious in the article, I'm clearly on the fence. Let me know what you think

Posted on September 3, 2014.

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7 Responses to “Should We Boycott Burger King for Avoiding Taxes?”

  1. phr3dly says:

    Let me get this straight… The US produces a completely broken corporate tax code, one that incentivizes companies moving their corporate headquarters abroad, and then when companies do exactly what they’re incentivized to do we call to boycott them?

    There’s no debate here. Demonizing the companies for following the rules is ridiculous.

    My fear is that Obama and the rest of the cronies on both sides of the aisle are going to take this opportunity to make the corporate tax code even more insanely complicated than it already is. They’re not going to fix anything, they’re going to plug the cracks in the dam with silly putty. The end result is that the US will continue its competitive decline.

    • Lazy Man says:

      I can see an alternative view where one makes a case that they took advantage of the United States’ resources to grow and consider them ethically obligated to be “true to its roots.” (I feel there is a better way to say that, but the words escape me now.)

      The average consumer has zero power to change the broken corporate tax code. They have their wallets. So a group of people boycotting (if large enough) could effectively remove the incentive to move elsewhere. Would it happen in practice? I tend to think no.

  2. Homer Dokes says:

    Ahh… corporate taxation. This one is an absolute no brainer.

    Corporations do not and never have paid taxes. Taxes are an ‘indirect expense’ to corporations and are simply passed on to the consumer. It drives me nuts why the average Joe can not figure this out.

    Burger King is not the first corporate entity to move across the boarder to another country to escape the exorbitant amount of taxes this country places on them and they won’t be the last. And for what, to give to people who can’t get off their own dead ass to facilitate their own survival? Why do people not stop to think about why they are moving abroad in the first place? Liberals and the liberal new media (the majority of all media) want to pound into our heads that corporations trying to evade severe taxation are un-patriotic. Are you un-patriotic because you would prefer to purchase from ebay, or barter, or stash your money in tax free IRA’s than give it to the gubment just so they can hand it to your neighbour who sits on their porch day in and day out sucking off the teet of those who do pay taxes?

    Burger King and all other corporations that seek to lower their bottom line to keep their product ‘affordable’ to you should be commended. And who’s damn business is it anyway whether or not their menu offering is healthy or not? EVERYTHING is not healthy if not taken in moderation. You can drown drinking too much water. For those who are capable but take no personal responsibility to care for themselves I say… let Darwinism take it’s course.

    People need to open their eyes. Ask questions. Recognize when they are being ‘programmed’ to think one dimensionally.

    Corporate America is charged the highest ‘corporate’ taxes of any country. Think about it… and let me say this again… Corporations are charged more taxes than even countries with absolute dictatorships. Tell me you wouldn’t be looking to go elsewhere if the same were happening to you? Oh wait… it is… and most are oblivious to it.

    Again, that cost to the corporation is simply passed on to the consumer in higher costs for product and services. Add that to those taxes you DO see. Paying corporate taxes through the purchase of their goods and services is just one in many ways you pay taxes and you don’t see it.

    The Fair Tax (fairtax.org) eliminates corporate taxes, the IRS, AND your payroll taxes. In place is a sales tax which EVERYONE purchasing NEW goods is charged. Everyone is you, the drug dealer down the street who doesn’t pay ANY now, the rich and famous, EVERYONE. The fair tax would contribute to eliminating special interest groups and remove the threat of incarceration that the IRS (i.e. the gubment) can impose on you at any time for any reason…. and is there for THAT specific purpose. Ask yourself, why do we have a government at all that seeks to continue to enact laws which are there to insure the oppression of the masses. Taxes can be collected WITHOUT an IRS and their power to seize and incarcerate and can be done so in such a fashion as to insure everyone’s contribution.

    With all due respect to anyone finding themselves on the fence… WHY? Again, this is a no brainer. This country is spending so much that even your great great grand children will be saddled with so much of their pay check going to uncle same they will essentially be slaves.

    Severe taxation and the associated oppression stifles growth, ingenuity, the desire to be the best, self reliance and responsibility, and everything else that made this country the greatest country in the world. Today… we are not that any longer. No one has pride in themselves, their community, and especially their country and elected officials. It’s a damned shame we find ourselves settling for mediocrity and someone else telling us when to wipe our asses and who and what to hate.

    How is it most do not see that other countries are trying to be what we once were and are moving that direction yet we find ourselves trying to be what they are all trying to get away from and we have most certainly moved in their direction?

    One more comment on taxation. It was suppose to be illegal to double and triple tax the same dollar as it goes through circulation. Today it is not only the norm but the gubment is leading the charge on it. And you say you don’t care?

    Taxes, Power, and Control serve only to continue to put this country in the dumper and make 3rd class citizens out of all but the self designated righteous bastards.

    Come on sheeple!!! WAKE UP! Use the brain you were given. Take pride in the fact that you are alive, a human being, with a limited amount of time on this earth. Make the best of yourselves, your community, and your country. STOP RELYING ON EVERYONE ELSE TO DO IT FOR YOU… because if you don’t… in the end… you will find you wasted your sliver of time on this earth for a select few to enjoy theirs. We can be and ARE better than that.

    Just my 2 cents.

    Sincerely,

    Less than average Joe…. but still fighting.

  3. Vogel says:

    Shifting the tax burden to a sales tax would be a form of regressive taxation.
    https://en.wikipedia.org/wiki/Regressive_tax

    It would jack up the cost for those who eat at Burger King, and their typical customer would probably feel that price bump in the pocketbook.

    It’s the nature of corporations to look for attractive loopholes like going offshore, so the best solution overall would probably be to simply close the loophole. Corporate America isn’t hurting for profits lately either; they are flush with cash.

    Until the loopholes are closed, there’s nothing wrong with consumers voicing their opinion through their buying choices. A “Buy American First” mentality wouldn’t be such a bad thing.

  4. Cathie says:

    We don’t eat crap anyway, so they wouldn’t miss me or my money.

  5. Evan says:

    I go back and forth on the topic too:

    http://www.myjourneytomillions.com/articles/sure-feel-recent-tax-inversion-activity/

    On the one hand there is something annoying about a company that built itself on America’s infrastructure and then leave when its “convenient.” Could BK as a corporation have thrived in another part of the world? Maybe but we’ll never know. AMERICA RULES lol.

    However, nothing is that simple and logic must prevail. One of my favorite quotes if from Judge Learned Hand way back in 1934,

    “Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes and public duty to pay more than the law demands.”

    In the end I think I am in the camp of – fix the problem don’t chastise those corps that are doing what their mandate is (i.e. increase shareholder value).

    Interestingly, WAG decided against it b/c they felt that in the long term they could get screwed by the federal gov’t. As such, they are following their long term mandate as well.

  6. Big-D says:

    You ask for an opinion and I will give one :) Burger King (BK), by law is required to maximize shareholder value and make money. Did you know you can sue an outgoing CEO or board of directors for not making enough money for a company and being negligent in their duties? What does that say about a company where they are looking to purchase another company, and then not only pay that companies taxes, but pay additional taxes in the US? The US (and one other who I forget at this point) are one of only two countries on the planet which tax foreign income. Let me say that again, the US is one of only 2 countries in the world who tax foreign income.

    So in BK’s role here, they purchased Tim Horton’s (TH), an now being a US company, now have to pay the following taxes. They pay their 35% tax on all income made in the US, pay the Canadian Rate on profits in Canada for TH’s profits (which are exclusively Canadian), and then, on what is left, have to pay the US 35% on that remaining income. Lets put numbers to this so that you can see the scale. Lets say BK makes 10 billion in the US, and TH makes about 10 billion (again – just to show scale but these are close). BK pays 3.5 billion in taxes to the US, 2.5 Billion to the Canadian government, and 2.625 billion to the US government on their foreign earnings. If BK moves it’s headquarters to Canada, they pay the same 3.5 billion to the US government, 2.5 billion to the Canadian government, and nothing else. So what people are talking about (when they are called tax dodgers or cheats), is that the US government is losing out on 2.625 billion in potential tax revenue. Not “lost” revenue, potential.

    An example of this was a few years ago when the estate tax was screwed up and one year they had no estate tax. That year a billionaire died, and his family had to pay no estate (or death) tax on the families money. People cried and said that they were cheats, etc. First off, someone died, and without committing suicide, it cannot be planned. Secondly, the US government made it’s tax laws, so live with the consequences. My point in bringing this up is that should that family decided to pay the US government their 50% of their estate because they wanted to feel benevolent? Nope they won the lottery (literally) and took their money and ran.

    My point is simple in this, many companies already do this. Did you know Microsoft’s headquarters is in Ireland? Same with Amazon, eBay, Google, and thousands of large US companies? Why is this? To not pay US taxes on international profits. Why do 95% of fortune 1000 companies incorporate in Delaware? No state tax on businesses. Again, look at Microsoft, their headquarters is in Redmond, Washington, that is where the CEO’s office is, everything. Know where their headquarters is? Nevada. Some office building in Nevada. Why? State Taxes.

    So back to BK for a moment. Do I begrudge them for minimizing their tax burden by doing something perfectly legal and with hundreds of years of legal precedent? Nope. Should the US fix their silly tax laws. Heck yes. I like the Fair or Flat tax method. People complain they are regressive, but that is if they are not implemented properly. If you limit items (necessities) to a certain cut off, then there is no regressions, and everyone is paying their share on luxuries. The first $50 on clothes are tax free. So you want to get those Nike Jordan’s .. great .. then you get the first 50 bucks free, and then pay the tax on the next 100 bucks. Simple. You want to have those shoes, great, but when just as good of shoes are available at Walmart for $25, then that is your choice to be taxed on that extravagance. Same thing for food, first $15k of a car, etc. This method fixes all the issues with progressive and regressive tax methods.

    While at the end of the day our government will never be so bold as to fix the problems we have, proposals galore can be suggested to them. Honestly, if they followed the tax laws of other countries (No deductions, straight line taxes, no tax on foreign income, etc.) then conservative estimates state we would double our revenue for the US government (I don’t have the link on me, it is a peer reviewed journal, not some FOX News site). Again, this is by removing loopholes, and using the already existing tax laws we have.

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