Last week, Burger King Worldwide announced a merger with Canadian restaurant Tim Hortons, creating one of the largest fast-food operations in the world. While Burger King will continue to be based out of Miami, it will make Canada its home for tax purposes.
In this increasingly common practice called “inversion,” corporations shift their headquarters overseas to avoid paying U.S. taxes. They avoid paying their fair share of taxes by designating themselves as foreign corporations on paper, all while benefiting from the legal protections, infrastructure, and workforce available in the United States.
We need commonsense reforms to close down these tax havens that cost our country revenue and cost American jobs. First, we need to lower the statutory corporate income tax rate so that it is comparable with our global competitors – the rest of the nations in the Organization for Economic Co-operation and Development (OECD). The OECD, an international economic organization concerned with stimulating economic progress and world trade, has over 30 member countries with the United States in the lead for the highest nominal corporate tax rate. By lowering our rate, we would be putting American companies on a level playing field with foreign competitors and reducing the incentive for them to shift jobs and profits overseas.
I am also proposing a country-by-country global minimum tax. Corporations that choose to shift their profits to countries with lower tax rates, so-called tax havens, will have to pay the United States the difference between that rate and the minimum tax. No longer will they be able to duck U.S. taxes by sending their profits on vacation to the Cayman Islands. Creating a global minimum tax rate will increase investment in the United States, raise revenue, close down the tax havens, and prevent a global race to the bottom.
Congress must pass corporate tax reforms if we want the United States to remain competitive. Our country has always supported businesses – large and small – and we will continue to do so. I urge my colleagues in the House and Senate to implement these reforms and fix our broken corporate code.