Apple Inc. made news when they were criticized for attempting to reduce their tax liability in the U.S. by keeping their profits overseas. After that, cases of other companies using similar tactics were reported. Now Burger King is being attacked by lawmakers and critics for evading taxes.
According to reports, Burger King paid substantially less in taxes before it was bought by private equity group 3G. It is interesting to note that 3G is still Burger King’s major shareholder. Burger King joins the ranks of other companies that have sought a lower tax liability by using tax inversions.
A common complaint from corporations is that the U.S. tax rate is too high. Currently, the tax rate is the highest in the world at 35%. In reality, though, many companies don’t pay the 35% rate. They often use legal methods that exploit tax loopholes.
Companies that have the resources, especially multinational companies with operations in various countries, can avoid paying as much in taxes in the U.S. Even President Obama expressed his displeasure at tax inversions. Many critics believe that a revision of the tax code will be necessary to affect real change.