Congress wants to keep Burger King from having it their way on taxes — but can’t agree on how

Policy makers from both parties cried foul Tuesday over Burger King’s potential tax-shaving merger with Canadian coffee giant Tim Hortons, but they couldn’t find common ground on how best to beat back the specter of corporate tax dodging.

Sen. Charles E. Schumer (D-N.Y.) said in a statement that he and other lawmakers are now drafting a proposal that would combat the “egregious cost-cutting ploy” of tax inversion, in which the fast-food king could lower its taxes by shifting its headquarters to Canada.

That proposal, which would limit how companies use the interest payment deduction, could emerge when Congress returns next month, a spokesman said.

Sen. Sherrod Brown (D-Ohio) encouraged consumers to boycott Whoppers in lieu of “Wendy’s Old Fashioned Hamburgers or White Castle sliders.”

But Republicans have taken to blaming Burger King’s switcheroo on the U.S. tax code itself, which a spokesperson for Sen. Orrin Hatch, the Senate Finance Committee’s top Republican, decried as arcane and anti-competitive. Hatch, the spokeperson said, is working with other lawmakers on a separate proposal.

The White House has in the past called tax inversion a “loophole,” and U.S. Treasury Secretary Jack Lew said in a letter last month that Congress should “shut down this abuse of our tax system.” In July, President Obama questioned the patriotism of companies that invert, calling them “corporate deserters.”

“My attitude is, I don’t care if it’s legal,” he said. “It’s wrong.”

Earlier this month, Democratic Sens. Elizabeth Warren (Mass.), Richard J. Durbin (Ill.) and Jack Reed (R.I.) urged Obama to “use your authority to reduce or eliminate tax breaks associated with inversions.”

Burger King’s chief executive officer, Daniel Schwartz, defended the merger in a conference call Tuesday by saying the deal “is not really about taxes. It’s about growth.” The company also took to Facebook with a post saying, “The WHOPPER isn’t going anywhere.”

Drew Harwell is a business general assignment reporter at The Washington Post.
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