Treasury takes aim at a ‘Double Whopper’

The Treasury Department announcement last week that it will take action to slow down corporate tax inversions. It is a rare bit of good news for taxpayers, but it is certainly not enough. When big corporations dodge taxes and shortchange workers, taxpaying Americans are the ones to foot the bill.

We’ve all heard about the Burger King example. Last month, the company announced its plans to abandon its U.S. citizenship by acquiring Tim Horton’s, a Canadian coffee and doughnut chain.  Burger King’s tax dodge is the latest in a series of “inversions,” in which a U.S. corporation buys a smaller company, renounces its American citizenship, and then uses its foreign subsidiary’s address to lower its tax bill.

{mosads}But not many other companies have Burger King’s “Double Whopper” strategy to pick taxpayers’ pockets – twice.  Not only is Burger King avoiding taxes, it’s also paying workers wages so low that many are forced to turn to food stamps, WIC, Medicaid, and other taxpayer-funded government programs.  The National Employment Law Project found that the fast food industry’s poverty wages cost the U.S. Treasury $7 billion per year.  Burger King employees use $400 million in public benefits each year—a corporate subsidy that comes out of the pocket of working Americans.

Treasury’s steps to close regulatory loopholes to reduce the benefits of inversions are a small step in the right direction but Democrat and Republican lawmakers agree that it is not enough.  We need Congress to pass legislation to close tax loopholes and make corporations pay their fair share, and to counter the Double Whopper, pass a $10:10 federal minimum wage so working Americans don’t remain stuck in poverty.

In this era of partisan gridlock that might take time, so companies must do the right thing by paying their fair share of taxes, paying their workers a living wage, and encouraging their fellow companies to play by the rules, too.

And there’s a role for all of us too. When Walgreens  announced plans to abandon its Illinois headquarters and move its tax address to Switzerland, Walgreens customers, local officials, and civil society organizations banded together to keep Walgreens here—and won.  Fed up with earning poverty wages, fast food workers across the country have joined together to call on Burger King, McDonalds, Wendy’s, and other big chains to increase wages.  Inspired by their efforts, the city of Seattle agreed to raise its minimum wage to $15 per hour, and other communities across the America are considering similar increases.

Burger King tells its customers to “have it your way.”  By demanding that companies play by the rules, pay their taxes, and value their employees, we as consumers, taxpayers, and elected officials can make sure that we all have it our way.

Offenheiser is Oxfam America’s president.