Burger King throws down gauntlet to White House, dares them to take action

Published August 25, 2014 by charlenecleoeiben54123

Burger King throws down gauntlet to White House, dares them to take action

In the latest move to save money by a giant corporation, Burger King is in discussion to merge with coffee-and-donuts chain Tim Hortons and relocate headquarters to Canada.

The two fast food behemoths have roughly the same market capitalization (BK at $9.6 billion and TH at $8.4 billion) and Miami-based Burger King would lower its corporate tax rate from 35 percent to 15 percent, according to The Wall Street Journal.

Following a trend by other conglomerates to scoot overseas or up north, the maneuver known as “inversion” has raised hackles in Congress and the White House.

President Obama directed his Treasury Secretary Jack Lew to see if he could legally thwart the process, and has called upon the legislative branch to pick up the cudgel and act.

Potomac Research’s Greg Valliere described the Journal’s Sunday scoop to Business Insider as a direct challenge to Obama and the Treasury Department to back up their rhetoric with deeds. He said:

So much for the theory that Treasury could chill future inversion deals by hinting of possible action. The Burger King deal throws down the gauntlet, and Treasury almost certainly will have to respond by proposing curbs on interest payment deductions. We still don’t expect regulations to be finalized until early next year, after a deliberative comment period, but we think there’s a good chance that Treasury will get a phone call today from the White House, urging quicker action.

The wisdom behind the deal for Burger King lies in its expertise in global marketing to popularize Tim Hortons high-margin quality coffee, grow the company, more easily keep cash outside the U.S., compete with arch-rival McDonald’s McCafe, and simultaneously lower its tax burden.

Hence, the merger is set to be structured without a “walkaway” clause, meaning there’s no going back even if Washington erects barriers, the Journal reported.

Since the Obama White House has proven to be the least business-friendly administration in memory, steadfastly refusing to even discuss lowering taxes, the odds for seeing a bill passed quickly rate about the same as this president vigorously tackling the ISIS threat.

Poor Obama! NPR points out that August is the ‘cruelest month’ for him

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