Burger King's deal to merge with Canada's Tim Hortons
fast food chain has a lot of people talking, especially
about the potential tax benefits for the King.
Burger King is set to become the third largest fast
food company in the world,
with more than 18,000 restaurants
Sales for Burger King have been flat over the last
couple of years, so a merger with another fast food
giant makes business sense.
But what's creating a lot of anger among American
citizens is something called tax inversion. It's why
many think Burger King is merging in the first place.
So, what is tax inversion?
Essentially it's when an American company purchases
another company overseas. Then they effectively move
their company headquarters to that new overseas location,
and that means their earnings are taxed at a far lower
rate in that country.
America currently has the highest corporate tax rate
in the world at just over 39%.
Tax inversion is completely legal, but it doesn't
sit well with many Americans.
Now, many are taking to the internet to call for a
boycott of Burger King, even Ohio Senator Sherrod
Brown asking people not to eat at the fast food chain.