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Thursday, August 28, 2014

Berkshire, Burger King Deal Draws Criticism Over Taxes

My pal Brian chowing down on a BK burger

Burger King Worldwide Inc. BKW +3.16% defended its acquisition of Tim Hortons Inc.THI.T +0.79% as the hamburger chain came under criticism for its effort, backed by billionaire investor Warren Buffett, to move the quintessential American brand to Canada.
Burger King on Tuesday announced its roughly $11 billion agreement to buy Tim Hortons, the Canadian coffee-and-doughnut chain. The deal is a so-called inversion, as it will move Miami-based Burger King's headquarters to lower-tax Canada. It is also structured to shield Burger King holders from capital-gains taxes.
Though many such takeovers have been struck lately in part to minimize taxes—and have been criticized by legislators and the White House for depleting the government's coffers—executives of Burger King and its owner, Brazilian private-equity firm 3G Capital Management, said the deal is aimed instead at capturing growth opportunities.
The deal, which has been in the works for months, put Mr. Buffett in an awkward position, as the 83-year-old billionaire has been a public advocate of higher taxes on the wealthy. In a 2011 essay, he laid out the case for why the wealthy should pay more in taxes, leading to the so-called Buffett Rule, a tax-fairness principle that has been embraced by the Obama administration.
More at The Wall Street Journal

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