Tonight's CBS Evening News spent 63 seconds on the Burger King fast-food chain's plan to merge with Canadian donut chain Tim Hortons, a move which would also relocate the new company to Ontario, Canada, for "substantial tax savings" where the corporate tax rate is much more favorable for business (15 percent) than the present federal corporate rate (35 percent).
But while business correspondent Anthony Mason noted that "Burger King could face a backlash if the deal goes through," he failed to present the viewing audience with the rebuttal that conservatives would offer to liberal Democrats -- the rash of "inversion" plans American corporations are executing is proof positive of the need for comprehensive tax reform that lowers the corporate income tax rate -- the better to be globally competitive -- and simplifies the U.S. tax code. Attached below is the transcript of the segment:
CBS Evening News
August 25, 2014
tease in opener:
6:30 p.m. Eastern
MAURICE DuBOIS, substitute anchor: Anthony Mason reports Burger King has a whopper of an idea to avoid U.S. taxes.
6:40 p.m. Eastern; 1 minute, 3 seconds
MAURICE DuBOIS, substitute anchor: Burger King says it is in talks to buy Tim Hortons, the Canadian donut chain. Senior business correspondent Anthony Mason here to tell us that dollars-to-donuts it's more about dollars than donuts, as it turns out, Anthony.
ANTHONY MASON, reporter: That's true, Maurice. The merger would create a fast-food powerhouse with 18,000 restaurants worldwide. And it would mean the home of the Whopper would move to Canada, where corporate tax rates are significantly lower.
In international mergers like this, American companies can legally shift their headquarters abroad. And it can mean substantial tax savings. Several U.S. drug companies have made similar moves. Valeant Pharmaceuticals, for example, bought an Ontario drug maker in 2010, and is now headquartered in Canada. Pfizer recently tried to buy the British AstraZeneca in order to move itself to England.
But Burger King could face a backlash if the deal goes through. One senator called for a Burger King boycott. And the White House called on Congress today to close the tax loophole that allows the moves.
DuBOIS: We'll see. Anthony, thank you.
Two more things. DuBois's teaser is misleading in that, even with an "inversion," Burger King would still owe Uncle Sam taxes on any profits made in U.S.-based stores. Secondly, Mason failed to mention that senator is Buckeye State Democrat Sherrod Brown, and it's likely his attack on Burger King was in no small part also in defense of his home state's Wendy's fast-food chain, headquartered in Dublin, Ohio.
