A group of Senate Democrats appealed directly to Burger King’s CEO on Thursday to cancel the planned move of the company’s headquarters to Canada.
In a letter addressed to Burger King CEO Daniel S. Schwartz, Majority Whip Dick Durbin and four other senators urged the company to back out of the deal it reached in August to merge with the Canadian doughnut and coffee chain Tim Hortons and move the combined company’s headquarters to Canada.
“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,” the letter reads. “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,” it continued.
The senators also noted Burger King’s use of taxpayer-funded infrastructure and the company’s employees’ use of public services, and accused it of intending to “avoid paying its fair share.”
In recent months, lawmakers and the Obama administration have become concerned about the rising number of corporate inversions, tax maneuvers in which a U.S. business buys a company in a low-tax country and moves its headquarters there.
Schwartz has said that the Burger King-Tim Hortons merger was done for business purposes, and that the company did not anticipate significant tax savings. Nevertheless, the senators warned that the move to Canada would “allow Burger King to avoid paying millions in U.S. taxes.” The merger needs approval from antitrust regulators and Tim Hortons shareholders to go through.
Investor Warren Buffett, who financed $3 billion of the deal, called Sen. Orrin Hatch before the deal was finalized to learn about possible congressional efforts to stop inversions, Hatch said Thursday.
Durbin earlier in the week introduced legislation with Sen. Chuck Schumer, D-N.Y., to raise taxes on companies that have sought inversions. But Democratic-backed legislation is unlikely to become law, as House Republicans oppose short-term measures in favor of comprehensive tax reform.
Nevertheless, Sen. Carl Levin, D-Mich., told the Washington Examiner earlier in the week that he hoped that merely raising public awareness of companies seeking inversions and raising the possibility of legislation could convince additional CEOs not to pursue similar deals.
The other signatories to the letter were Democrats Jack Reed of Rhode Island and Sherrod Brown of Ohio and independent Bernie Sanders of Vermont.
