WASHINGTON, DC – As Burger King begins talks to purchase Canadian-based Tim Hortons, U.S. Sen. Sherrod Brown (D-OH) – a member of the Senate Finance Committee and a senior member of the Senate Banking Committee – urged Congress to take immediate action to address “inversions,” whereby a corporation shifts profits overseas to avoid paying domestic tax rates.
“Burger King’s decision to abandon the United States means consumers should turn to Wendy’s Old Fashioned Hamburgers or White Castle sliders. Burger King has always said ‘Have it Your Way’; well my way is to support two Ohio companies that haven’t abandoned their country or customers,” Brown said. “To help business grow in America, taxpayers have funded public infrastructure, workforce training, and incentives to encourage R&D and capital investment. Runaway corporations benefited from those policies but want U.S. companies to pay their share of the tab.”
“We need an immediate fix to forestall a flood of these dangerous inversions and a long term solution that lowers corporate tax rates while instituting a country-by-country global minimum tax,” Brown continued. “This kind of common sense reform will close down tax havens that cost our country revenue and cost American jobs. Lowering the statutory corporate tax rate would put companies on a level playing field with foreign competitors and reduce the incentive for them to shift jobs and profits overseas. Creating a global minimum tax rate will increase investment in the United States, raise revenue, and prevent a global race-to-the-bottom.”
In June 2013, Brown submitted a plan to the Senate Finance Committee that would increase American competiveness by overhauling the corporate tax code in order to promote investment in the United States. Brown argued that tax reform must ensure that our nation secures its fiscal future while addressing the challenges of an increasingly globalized economy. Currently U.S. multinational corporations book over 40 percent of their profits in so-called “tax havens” that contain seven percent of their actual foreign investments and four percent of their foreign workers. For example, the profits of U.S. controlled foreign corporations booked in Bermuda represent 646 percent of that nation’s Gross Domestic Product (GDP).
Brown plan would simplify an overly complex international tax system that fails to encourage domestic investment and allows companies to shift domestic profits to tax havens. Specifically, Brown’s plan would: