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Do You Want Some Hogwash with That Burger?

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Cross-posted from Other Words

A sneaky tax dodge is driving the Burger King-Tim Hortons merger

Burger King bills itself as "home of the Whopper," a name intended to convey to burger eaters that this one is a whale of a deal. But "whopper" also means a prevarication, a crock, a tall tale -- hogwash.

Both meanings apply to Burger King's current effort to take over Tim Hortons, a Canadian coffee-and-doughnut chain. The $11 billion price certainly is a whopping big one -- the most ever paid to buy out a fast-food purveyor. And the deal would cook up a massive corporation, with 18,000 restaurants in 100 countries, making about $22 billion in annual sales.

But the deal is clearly a whopper in that it's based on a con. While Burger King's CEO, Daniel Schwartz, offers some credible business reasons for the combine, what he doesn't want BK's American customers to ponder is the clincher in the deal: It gives his corporation a huge tax dodge.

In U.S. tax law, something called an "inversion" is a loophole allowing an American corporation that merges with a foreign one to reincorporate in the foreign country -- and shirk its tax responsibilities to our nation. It's really a perversion of the law.

Schwartz intends to do just that, renouncing Burger King's U.S. citizenship so it can get a lower tax rate as a Canadian citizen. Schwartz & Co. would still be headquartered in Miami, Burger King would still haul in billions of dollars in sales from its U.S. outlets, and its top executives would still enjoy all the benefits that the USA affords them -- but potentially without putting a corporate dime into our national treasury.

Why should we buy this whopper? There are plenty of places to buy a burger, so you don't have to spend your dollars at the one that says it doesn't want to be a U.S. citizen.

If Burger King won't support America, Americans shouldn't support it either.

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Jim Hightower is an American populist, spreading his message of democratic hope via national radio commentaries, columns, books, his award-winning monthly newsletter (The Hightower Lowdown) and barnstorming tours all across America.

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