November 21, 2014

Elyria
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Sherrod Brown critical of Burger King merger

The Burger King restaurant on West Avenue and West Broad Street in Elyria is shown Monday. RAY RIEDEL/CHRONICLE

The Burger King restaurant on West Avenue and West Broad Street in Elyria is shown Monday. RAY RIEDEL/CHRONICLE

Hold the pickle, hold the lettuce, Burger King’s corporate merger really upset us.

Well, Sen. Sherrod Brown, D-Cleveland, anyway. Down with the king, Brown said Sunday at the 20th annual Lorain County Organized Labor Day Family Celebration.

Brown was referring to last week’s $11.4 billion deal in which Burger King plans to buy Canadian doughnut chain Tim Hortons and to locate the combined company in Ontario, Canada. Brown said it is a tax dodge known as corporate inversion in which an American company combines with a smaller foreign company, then relocates its headquarters while keeping most of its operations in the U.S. allowing it to pay lower taxes.

Brown said Burger King benefits from food inspections, police protection and roads paid for by U.S. taxpayers, but won’t be paying its fair share of taxes due to the inversion. He urged the crowd to patronize locally owned restaurants instead of Burger King.

“They decided to renounce their American citizenship,” he said. “So why help them?”

U.S. Sen. Sherrod Brown, D-Cleveland, speaks during the 20th annual Lorain County AFL-CIO Labor Day Festival at Black River Landing in Lorain Sunday. CHRONICLE FILE PHOTO

U.S. Sen. Sherrod Brown, D-Cleveland, speaks during the 20th annual Lorain County AFL-CIO Labor Day Festival at Black River Landing in Lorain Sunday. CHRONICLE FILE PHOTO

Well done, sir, say inversion opponents like Sen. Carl Levin, D-Mich. But some say Brown doesn’t know what he’s talking aboot, er, about.

While Canadian corporate tax rates are lower than in the U.S., New York Times columnist Josh Barro wrote that the merger isn’t a good example of inversion. Tim Hortons had about $3.3 billion in revenue in 2013 compared to $1.1 billion for Burger King.

Barro also noted that while 44 percent of Burger King outlets are in the U.S., it has 21 percent in Canada and 35 percent elsewhere. Burger King has restaurants in 98 countries, according to its website.

While the combined company’s headquarters will be in Ontario, a Burger King news release said Burger King’s headquarters will remain in Miami.

“Burger King will continue to support and preserve its long-standing commitment to local communities and charitable causes in the United States,” the release said.

Barro said proposed laws to prevent inversions probably wouldn’t stop the merger, and the move wasn’t strictly to duck taxes.

“We can change the tax code, but we can’t prevent an American fast food company from going global,” Barro wrote.

Brown’s comments drew some cheers from crowd members, but criticism from an op-ed column in U.S. News and World Report on Wednesday. Writer Stephanie Slade accused Brown of hypocrisy, noting he supported a $260 million tax extension for Cleveland’s professional sports teams paid for by Cuyahoga County taxpayers.

“What does any of that have to do with Tim Hortons and Burger King? Simple: There’s hypocrisy in blasting one company for seeking out a more favorable tax climate while working to solidify tax giveaways for another,” Slade wrote. “If Brown wants to use social pressure to try to dissuade American businesses from moving overseas, more power to him. Better that than using the strong arm of the tax man to force lower-middle-class Americans to subsidize professional athletes and their ultra-rich team owners.”

Contact Evan Goodenow at 329-7129 or egoodenow@chroniclet.com. Follow him on Twitter at @egoodenowct.


  • Fred Garvin

    Sheriff Brown and the rest of the do-nothing politicians have to thank themselves for this with their worthless tax laws.

  • SJ82

    Only a Democrat would be shocked when a business actually reacts to high taxes and hostile laws.

    Idiot.

  • SniperFire

    This is horrible, flawed, agenda driven reporting.

    Burger King will continue to pay taxes on ALL their domestic operations and profits.

    All you had to do was seek the truth, Eric, instead of being a mouthpiece for Marxist Sherrod Brown and letting him get away with a lie on sharing costs for roads and food inspectors.

    • reset

      Last I knew Employees of Burger King pay income taxes. They buy gas for their cars which is taxed to pay for roads and the plates on those cars are taxed to pay for roads. Sherrod Brown is a hypocrite. If anyone really knew of his past they would not put his butt in office.

      • golfingirl

        He is nothing more than a carpet bagging, life-time politician.

  • Dgowner

    Well, Duh! Our government has chased all of our businesses to go to other countries with over taxation and EPA regulations. Look around you and see all of the businesses closing. Our small businesses are especially vulnerable. I know of several who closed in the last two years because of impossible EPA regs. Time for Sherrod Brown to go, by the way.

  • Pablo Jones

    The majority of Burger King restaurants are franchises. That is they are separate companies based in the US that pay franchise fees to the Main Burger King company. So you have a 95% chance of supporting an American company in the US if you go to Burger King. These companies will pay tax on all of their revenue as well as property, SS, medicare, unemployment, etc. taxes.

    Brown isn’t attacking one company for moving a corporate headquarters out of the US. He is attacking hundreds if not thousands of American Businesses.

    • Scout

      Exactly. He forgot to mention that little fact didn’t he? Most big name fast food restaurants are franchises. There is a distinction between the local store and the corporation and in this case we are just talking about the ‘corporation’s’ taxes not the local burger king, etc. on the corner.

  • 2111

    Mr. Brown is a vile creature pandering to the uninformed. I’ll bet every one of the folks cheering would have done the same thing Burger King has done given the same circumstances. Burger King will be paying every dollar of taxes that they were previously paying on all operations in the United States. They are shielding themselves from double taxation on monies earned in other countries where they pay the full amount owed to that country but are forced to make that debt equal to our rate, They are not privilege to the infrastructure here and assume more risks yet the tax code insists they pay taxes at our rate no matter the foreign rate.

    Should we also not have been consumers of Burger King when it was a British owned company for eleven years of it’s existence? Do they think the British company didn’t pay all of the taxes owed to the U.S. during that time?

  • SniperFire

    Brown called for boycotting Burger King, which made National news but is mysteriously missing from this story, and for hurting low wage workers in the process.

    I am wondering if people should not organize and boycott- and do it with protests and big signs on sticks – any corrupt local media that falsifies information just to please political agenda.

  • JoyceEarly

    He doesn’t talk about lowering taxes to keep businesses here; instead we hear the “My fair share” speech. Make America a more business friendly place lower all the ridiculous regulations and the jobs will come and the businesses will stay.

    • stop ur whining part deux

      most companies that are leaving are paying a ridiculously low tax rate after deductions and tax credits. Milan Pharm just moved to Ireland. Last year they paid 17%. The US is more than fair to big businesses. It is greed that forces these companies to move. Share holder profits are all that matter. TO quote the great Henry Ford : “A business that makes nothing but money is a poor business.”

      • JoyceEarly

        If you think like a business you would know some do avoid taxes but the small run businesses aren’t making a killing. Our legislators are in bed with these huge corporations yet are the first to say profit is a bad word. Profits create jobs and opportunities. There are way too many regulations. Businesses leave because our dollar has no value and to survive they do what they have to do. That fact that they leave is a symptom of a problem; not the problem. The problem is unfriendly business atmosphere, ridiculous regulations and high taxes and a monetary policy that watches the dollar sink to no value thus the need for higher minimum wage. It’s unsustainable to continue as we are going. We have to start with sound money and fiscal sanity. The Fed just keeps printing money and that is terrible monetary policy. Builds nothing helps no one.

        • stop ur whining part deux

          Exactly, so raise the import tax on the large corporations and allow your smaller companies to pick up the slack. Americans consume, it is the one thing we do better than the rest of the world. Time to use that to our advantage. Force companies to stay or allow new companies to take the large companies business. If motorola for example decides to leave then raise their import taxes, heck event a new tax, call it the inversion tax. Then motorola has to pay more and rightfully so but now a smaller company has a leg up on taking their businesses..

          • Pablo Jones

            Americans consume the things they want. Just because a company makes a similar product doesn’t mean people will buy it. Look at Samsung phones and Microsoft phones, no one is buying the American Microsoft phone. The auto companies compete as well, but people are willing to spend more money for a foreign car than an American car.

            All you will achieve is raising costs, costs that people will still pay for and have less money for other purchases, including purchases from american companies. You will also disincentivize foreign companies from investing in our country.

      • Pablo Jones

        This is a very misleading statement. “ridiculously low tax rate after deductions and tax credits. ” You make it seems like these are secret tax loopholes for hiding money that only big corp knows about. Those deductions are for building and maintenance costs, costs for food and packaging, advertising, property taxes, employee wages or in other words business costs. You can’t take the taxes they paid and divide it by total revenue and say they are making out.

        2013 Burger King had a pretax profit of about $320 million and paid about $89 million in income taxes. That is about a 28% tax rate.

        • stop ur whining part deux

          Right, but loop holes they are none the less. They are in place to keep companies here by lowering their overall taxes. So when you factor them in and take 28% to 20% they are in fact paying less. We offer theses breaks an incentives and are still providing them and letting them walk. On every level that is wrong.

          • Pablo Jones

            It’s not going from 28% to 20%. They are paying 28% based on the tax law. There are no loopholes just tax law. You can’t tax a billion dollar company $300 million (30% of a billion) if after their expenses they only have $100 million left in pre-tax profit. They won’t have the money to pay, deducting wages and expenses is not a secret way to not pay taxes, these are things that have to be done. You tax them after their costs have been paid.

            Businesses are not in business to pay taxes. Businesses are not in business to provide jobs, wages, and health benefits. Businesses are in business to produce goods and services for a cost and sell them at a rate higher than that costs. If they do well they pay a tax on the profits. If they have to hire people that is a bonus for the community, if they have to pay higher wages and health benefits to have the right employees that is an added benefit to the employees. A business that does not make money won’t stay in business. If they aren’t making money investors won’t invest in their business and the business will not have money to expand or improve their products. In the real world the mythical Utopia doesn’t exist. If you want all the added benefits businesses bring (tax revenue, jobs, etc.) then you have to make businesses want to be where you want them.

  • stop ur whining part deux

    This entire inversion game companies play is pure BS but our politicians continue to let it happen. Our congress overwhelmingly decided against raising the import tax to offset the inversions which is the height to stupidity. If Americans do one thing well it is consume. Wanna dodge taxes? Fine, we will raise the import tax or lock you out of our market allowing smaller business to pick up the slack.

    For all those who support inversion as “a smart move” or “merely taking advantage of tax loop holes”. Think about this. Everyone was up in arms about the welfare surfer that was using EBT cards to buy lobster. He was called a sponge, and a lot worse. In the end the guy is merely taking advantage of loop holes, he is being savvy and taking what he can just like all these huge companies that are already getting ridiculous tax breaks. Milan the pharm company just moved to escape the awful tax burden of 17%!!!! Shame on them and any that support them ,

    • SniperFire

      ‘In the end the guy is merely taking advantage of loop holes, he is being savvy and taking what he can just like all these huge companies ‘

      Ridiculous to compare a freeloader to producers of goods and services.

    • SniperFire

      ‘ Our congress overwhelmingly decided against raising the import tax to offset the inversions which is the height to stupidity.’

      What is being ‘imported’ to tax as a result of inversion?

    • SniperFire

      ‘Fine, we will raise the import tax or lock you out of our market allowing smaller business to pick up the slack.’

      the 19th century called and wants their trade protection policies back.

    • golfingirl

      Guess what?

      This is the world we live in and whether you like it or not, it really doesn’t matter, does it.

      Fact is, companies will leave when they are FORCED to pay the highest corporate tax rates in the world of any developed country.. The Highest! Not a middle of the road tax rate, but the highest!

      Like it or not, the only way to keep them here is to change the tax code. PERIOD!

      To even compare someone who plays the system on welfare, to a corporation which provides jobs and revenue to this country is absurd.

      Change the tax code, or they will continue leaving.

    • Pablo Jones

      Most of these inversions started in the late 1990′s then in 2003 they changed the law that basically stopped them by making them more difficult. Then in 2009 companies started to do them again. Even though they are more difficult they see it as a savings in the long run over the burden government is placing on them.

      How would an import tax affect inversions? If all the manufacturing or actual business takes place in the US, and import tax would not do anything to stop inversions.

      • stop ur whining part deux

        They see it as a way to bolster shareholders pockets. You move your corporate headquarters out of the US then you are officially a foregin company and therefore should pay a steeper tax regardless if it is built in the US. There are plenty of companies that are willing and able to pick up the slack.

        • Pablo Jones

          So using this wonderful logic, lets go back several years. Tim Horton’s a Canadian company wants to expand into the US market (paying taxes and creating jobs). You want to tax them more since they are a foreign company?

          Or in the case of the foreign auto companies you want to tax them more because they are based in another country? So you want to penalize them if they want to build plants in the US and hire thousands of workers. You would rather them keep the jobs out of the country and just import the cars. A $1-2000 import tax on a car is nothing compared to the value generated by having those businesses in the US.

          We should make the country a place where businesses want to be not a place where they want to leave. I think you and the government are just taking this personally. This is like acting like the mean school bully and get upset when the other kids don’t want to be your friend so you beat up on them so more.

        • Otter

          Burger King is not moving anything out of the U.S. Their corp. headquarters are staying right where they are. They are establishing a new, combined, headquarters in Canada.

    • Pablo Jones

      Also if you are referring to Mylan pharmaceuticals. They paid $208 million in taxes on $747 in pretax profits. Roughly 28%.

      • stop ur whining part deux

        “Mylan paid an effective federal tax rate of 16.2 percent in 2013,
        according to a company securities filing, which also indicates an
        effective tax rate of 20 percent in 2012 and 17.7 percent in 2011.” Furthermore Fortune 500 companies that were consistently profitable from 2008 to
        2012 had an average effective rate of 19.4 percent, according to
        Citizens for Tax Justice. The Washington, D.C., tax policy group said 26
        of the companies paid no federal income taxes over the five-year
        period.

        • Pablo Jones

          You need look a little further in the details of their balance sheets and not rely on other sources that either willingly or through incompetence misrepresent the data. They had deferred income taxes most likely through equipment deprecation. They reduce their taxes up front and have to pay it back over the long run. The taxes still get paid.

          See the breakdown between current taxes and deferred taxes.

          http://www.marketwatch.com/investing/stock/myl/financials

          • golfingirl

            You are trying to teach college accounting to a kindergarten child.

            Don’t waste your time….he will never comprehend the complicated math required to understand the tax code.

            Bottom line is this….

            Who do you feel is better at managing money, the government or private enterprise?

            My vote goes to the later. History has supported this view over and over again.

            But some people never learn and insist on repeating the same mistakes.

          • stop ur whining part deux

            Right, i am unintelligent. SO i assume you are all for the Welfare surfer that scammed lobster while on welfare right? I mean he is doing the exact same thing as all these large corporations by taking advantage of loop holes. I, unlike you am not arrogant enough to believe i have all the answers. I am smart enough however to know BS when I see it. WE are giving tremendous breaks to these companies and they still are leaving to cheat the system.

            Is it not a republican virtue to pay your fair share?

    • Conservator440

      I would like to ask you how much extra you pay in YOUR taxes each year if you are so in favor or paying the maximum amount? I would postulate that at least an extra one hundred fifty percent of your tax obligation would be fair. Put thy money where thy mouth is.

      • stop ur whining part deux

        I pay enough in taxes. The problem is that these companies do not. Mylan the phram company that just bolted paid a tax rate of 17% last year and still are complaining?

        Is it not a republican virtue to pay your fair share? These corporations are no different than the “evil surfer” that purchased lobster on welfare. He is merely taking advantage of loop holes.

        I pay my fair share sir, it is these corporations that are not. Record high profits, fully recovered from a financial crisis and still our economy is in the toilet. TIme for corporations to not pay more, just what is fair. You see i am putting my money where my mouth is, it is the large corporations that are not.

    • Scout

      and it all started with: NAFTA

      • stop ur whining part deux

        I do not debate that. IDC if it was red or blue bc in fact they all serve the same master. Large corporations. Red vs Blue is miss direction and nothing more.

  • Don Grantzki

    We can count on Brown to get it wrong, once again.

  • todd

    Funny how a member of the WORST Congress EVER can criticize a business for trying to make money. How about you “CHANGE” the tax code to prevent more companies leaving.
    Oh yeah, can’t do that. Taxes are your solution instead of the problem.

  • bpbatista

    Will Brown also call for a boycott of Democrat Patron Saint Warren Buffet and his company Berkshire Hathaway who are financing this deal?

  • bpbatista

    Leave it to a Liberal/Progressive Democrat to build a financial Berlin Wall to trap people and businesses in a Liberal/Progressive tax hell.

  • Sis Delish

    Sherrod, go ask the folks in your adopted home town of Oberlin why they voted not to Increase the Minimum Wage in that Liberal Paradise…

  • Stan Hughes

    Sherrod Brown needs to crawl back into his hole and hide. With major crises affecting the entire world, he makes fast food and the NFL blackout rules his major concerns. There shouldn’t be any question why our country is in the mess that it is, when one of the 100 most powerful people in the US concerns himself with lowly matters such as these.

  • HankKwah

    While Canadian corporate tax rates are lower than in the U.S., New York Times columnist Josh Barro wrote that the merger isn’t a good example of inversion.

    Neither Brown, nor any other democrat ever let a good, solid fact get in the way of demonizing a person or entity. As long as it looks anti-American to THEM, it works.

    Honestly, who gives a flyin’ fart what sherrod has to say, anyway? He’s part of the problem. As I said before, if he chooses to no longer patronize BK, that’s one less person in front of me when I decide to go.

  • golfingirl

    Can someone please give me one example of a Sherrod Brown accomplishment since he became Senator Brown?

    Not a “trick” question, but honestly cannot think on one.

    • Pablo Jones

      He’s increased his own net worth. He’s increased the amount of donations his campaign receives….Oh wait that is what he has accomplished for himself not for Ohio.

    • levtrotsky

      Moved into a new home with Schultz in a CRA area in Strongsville……

    • reset

      He got all the seniors on and off the bus to get their drugs so they can get all drugged up and vote for him.

      • Scout

        Didn’t that bus go to Canada?

        • golfingirl

          Yep….they spent they money in another country, but Sherrod then complains about buying foreign steel and autos.

          What a hypocrite. He accompanied seniors to go and spend their dollars in Canada.

          I guess if it isn’t steel, or autos, he has a different standard.

  • LookBackTwo

    Down with Brown! He doesn’t do anything to lower corporate taxes, then blames corporations when they have to relocate in order to remain profitable. Only his kind of tax and spend government can operate at a deficit. Individuals and corporations cannot!

  • Beentheredonethat

    Sherrod Brown and his cohorts can’t even pass a budget and he’s sticking his nose into Burger King? Give me a break! Start doing the job you were elected to do and gain some respect back!

  • Fred Garvin

    Usually one becomes a politician because they cannot hold onto a regular job.

  • Wm Maiden

    I think a $50.00 import fee on burgers is in order. Let the businesses go where they will, but place an import fee on all of their services making it unreasonable to invert.

  • Wm Maiden

    …By the way, Burger King is running a commercial where they want to change the design of the $5.00 bill. Of course they do. They want to change it to Canadian Currency.

  • bigmacky

    meh – I am sure there are better things to worry about than a fast food chain merger – how about the sad state of the VA? the beaten to submission middle class? the subsidies of “affordable” healthcare? (who really pays?) look in your own backyard Brown.

    • SniperFire

      Those stories don’t incite the race and class warfare needed by Leftist politicians and their Leftist media accomplices to keep their base mad at those they envy.

  • TrickleDownDoesn’t

    I can’t believe how many in this discussion are sucked into the business school mentality, and don’t realize that corporations are not people, and not the greatest role model, nor the greatest thing since sliced bread. It makes me want to barf! Corporations control politicians, the media, and what and how consumers eat, drink and simply live their lives. If the 99% doesn’t wake up, we won’t have anything.

    • Pablo Jones

      Does that mean you are in the 1%? If corporations had as much control as you think then things would be a lot different. All groups have certain pull over certain issues and when they go against each other it is a toss up which side politicians will support (if they actually make a decision).

      • TrickleDownDoesn’t

        The only groups that have pull are corporations, and only for their greedy, selfish benefit.

        • Pablo Jones

          The environmental groups don’t have pull? The unions don’t have pull? Veteran service organizations don’t have pull? The elderly (AARP and the like) don’t have pull? The NRA doesn’t have pull? Health issue people (No smoking people, control what people eat, etc.) don’t have pull? Hollywood has no pull?

          Each group has pull in their respective area. If just corporations had pull, everyone would be smoking, old people would be sent to corporate concentration camp retirement homes, and cities would have the best equipment and roads because in stead of spending money on wages and benefits for their union workers they would be buying corporate goods and services.