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August 26, 2014 11:34 AM   Subscribe

"International fast food behemoth Burger King Worldwide Inc. confirmed Tuesday that it will pay about $11 billion to buy Canadian chain Tim Hortons Inc., which sells coffee, donuts, and other breakfast food fare. The deal would merge America's second-largest burger chain, which is valued at nearly $10 billion, with the Canadian equivalent to Dunkin' Donuts, which is valued at more than $8 billion. It would also move the new company's headquarters to Canada, where corporate taxes are significantly lower."
"...[W]hen a company reincorporates abroad, as the practice is known, what it's really doing is shifting its corporate citizenship; and when a company shifts its corporate citizenship, what it's really doing is trying to pay less in taxes. The effective corporate tax rate in the U.S., which combines national, state, and city-level tax rates, is nearly 40 percent—the highest across all 34 Organization for Economic Cooperation and Development (OECD) member countries. Canada's, by comparison, is just over 26 percent.

Burger King would hardly be the first large American corporation to move its headquarters—more than 70 U.S. companies have reincorporated overseas since the early 1980s. The practice has been especially popular lately—more than half of those inversions have come since 2003, or almost double the amount that did in the twenty years prior, according to data from Congressional Research Service (CRS).

The increasing popularity of tax inversions has prompted discussions about how to close--or at the very least thwart--the sort of loopholes that allow tax flight in the first place. President Barack Obama has expressed concerns about the practice and its imminent growth. "We don't want to see this trend grow," he said at a news conference earlier this month. And the Treasury Department is already working to assemble a list of ways to help curb the maneuver.

A Burger King reincorporation, however, would be different from most of those that would have preceded it. The Miami-based burger slinger would be one of the most visible to move overseas, at least in the eyes of the American consumers. The vast majority of corporate headquarter hauls have been executed by pharmaceutical companies, whose brand equity is far less important to sales. Burger King's business, by comparison, stands to be more significantly impacted if there is any public backlash.
CBC - Corporate tax evasion 'crackdown' more bark than bite: "Global efforts to stop companies from eroding tax base by moving profits offshore have no teeth, experts say" Canadian Business - Timeline: Lessons for Burger King from the Tim Hortons-Wendy’s merger
"It all started so promisingly. Two folksy brands, Canadian coffee mainstay Tim Hortons and U.S. burger slinger Wendy’s International joined hands in 1995 to form the continent’s third-largest fast-food conglomerate. But after just over a decade of being bound together, Tim’s was spun off and the relationship ended. With the news that Burger King is looking to acquire Tim’s in a move motivated by Canada’s favourable tax climate, the most valued brand in Canada is again for sale. But the Wendy’s deal should provide a cautionary tale for those enthusiastic about this latest burger-coffee collaboration."

Macleans - Why Tim Hortons feels it needs Burger King
It’s clear what’s driving Burger King to pursue this deal. But there’s been far less attention paid to the question: what’s in this for Tim Hortons? According to Tim Hortons, the answer—as it unceasingly has been for the past two decades—is the pursuit of international growth... Whether Burger King will have any more success delivering on that promise than Wendy’s did will be the question hanging over the new company. There is little question that in its current form, Tim Hortons has hit a wall. Its U.S. expansion has been an enduring disappointment... But Tim Hortons’ biggest challenge arguably isn’t its failed U.S. expansion. It’s that the market at home is tapped out. Were it not for opening scores of new stores every year, Tim Hortons growth in Canada would be paltry.
Canadian Centre for Policy Alternatives - Tim’s + BK = $ for Canada right? …. Wrong!
But the loss of US taxes from BK is Canada’s benefit right? Turns out, not so much. The only reason why this particular accounting trick works is because American corporations are taxed on worldwide profits, Canadian companies (and most other countries companies) are not. What that means is that American corps pay the American government taxes on all their profits no matter which country they are made in. Canadian companies only pay the Canadian government on profits made in Canada.

So the BK move to Canada would mean that BK will stop paying taxes on profits it makes in Kuwait to the US government. However, since no Canadian company pays taxes on profits made in Kuwait in any event, Canadian governments would bring in no additional revenues. In BK’s case, this would save them in the neighbourhood of $12 million a year in US corporate taxes. Of course, Canada sees none of that money and essentially gains nothing from this deal.

In the end, many corporations want to pay $0 in income taxes and have the rest of us pick up the tab for health care and infrastructure that we all benefit from. “Tax inversion” is just one of the many accounting tricks that makes regular people pick up the tab for corporations that abuse tax rules or lobby governments to pay less and less every year.
CBC - Tim Hortons, Burger King agree to merger deal
"If the deal goes through as is, 3G would still control 51 per cent of the new company. Current Burger King shareholders would own 27 per cent, and current Tim Hortons shareholders would own the remaining 22 per cent. Although Burger King has roughly twice as many locations as Tim Hortons, the Canadian chain takes in much more revenue from its stores. Tims says it controls 28 per cent of fast food sales in Canada, including 75 per cent of all coffee and caffeinated beverage sales."

Independent UK - Burger King backlash over whopper 'tax inversion' deal with Tim Hortons
"Burger King's "tax inversion" merger with Canadian doughnut chain Tim Hortons has sparked calls for a boycott with politicians and customers accusing the American fast food chain of tax-dodging."

New Yorker - Is the Burger King-Tim Hortons Deal About More than Taxes?
Whatever the reasons for the deal, and the move, Burger King will have a lot of work to do in trying to expand Tim Hortons beyond Canada. In a May post about Tim Hortons’ failure to gain traction in the U.S., Paul Hiebert wrote about one ill-fated marketing campaign: "In the mid-aughts, Tim Hortons attempted to appeal to American curiosity with an ad campaign known as 15 Million Canadians—a number meant to imply that about half of Canada’s population visits a Tim Hortons each week, according to the company... The ads, however, did little to entice. “We did try the Canadian angle, and it failed, because Americans showed zero interest in what Canadians like,” Brynn Burton, a spokeswoman, said."
posted by flex (225 comments total) 34 users marked this as a favorite

 
To call Tim Horton's the equivalent of Dunkin' Donuts is a little off. Tim's is a state of mind for Canadians. Hanging out at Tim's versus getting your coffee at Starbuck's in Canada is something like the Red State / Blue State divide of the US.

On car trips with the kids up Vancouver Island, we usually stop with the kids at Tim's - McDonald's is usually too dirty and everyone loves Timbits. The coffee is awful though.
posted by Nevin at 11:40 AM on August 26 [7 favorites]


I have little but anecdata to report, but so far both right-wing and left-wing "friends" are calling for BK boycotts on Facebook, which is pretty remarkable.
posted by Curious Artificer at 11:41 AM on August 26 [5 favorites]


How is it that Canada has public health care, incredibly low college tuition, AND lower corporate taxes?
posted by the jam at 11:42 AM on August 26 [40 favorites]


How is it that Canada has public health care, incredibly low college tuition, AND lower corporate taxes?

That's just what I was going to ask.
posted by fraxil at 11:42 AM on August 26 [1 favorite]


Operation Maple Mayhem is a GO.
posted by echocollate at 11:43 AM on August 26 [8 favorites]


How is it that Canada has public health care, incredibly low college tuition, AND lower corporate taxes?


Less loopholes.
posted by Lemurrhea at 11:44 AM on August 26 [20 favorites]


I have little but anecdata to report, but so far both right-wing and left-wing "friends" are calling for BK boycotts on Facebook, which is pretty remarkable.

Came here to say that this should happen. I know it won't because...Burger King. That being said, I wonder how long, we, as consumers will allow this to go on without some sort of protest. I'm guessing forever because to protest would mean that we'd have to miss American Idol or Family Guy or whatever.

posted by damnitkage at 11:45 AM on August 26 [1 favorite]


I would boycott BK, but I already do, because I have taste buds.
posted by entropicamericana at 11:45 AM on August 26 [46 favorites]


How is it that Canada has public health care, incredibly low college tuition, AND lower corporate taxes?

It costs a lot to be the world's policeman.
posted by GuyZero at 11:45 AM on August 26 [73 favorites]


Canada spent less per capita government dollars on healthcare even before the aca passed (with statistically similar outcomes to USA). I think because they don't have a medical culture that engages in aggressive intervention for elderly/dying patients.
posted by BrotherCaine at 11:46 AM on August 26 [5 favorites]


How is it that Canada has public health care, incredibly low college tuition, AND lower corporate taxes?

Higher income taxes and a federal sales tax.
posted by Zedcaster at 11:46 AM on August 26 [16 favorites]


Phase 2 in Americanization of Canada now complete.
posted by MoonOrb at 11:46 AM on August 26


Taxes are definitely the prime driver behind this merger, however the combined entity will have a significant presence in Canada. Especially now that BK rarely owns their stores. It's not as pure a tax inversion scheme as some of the recent biotech deals.
posted by 2bucksplus at 11:46 AM on August 26 [2 favorites]


Interestingly, Burger King has done a lot of crazy corporate stuff lately apparently because their CEO is 33 years old - pretty insanely young for a CEO.
posted by GuyZero at 11:47 AM on August 26 [7 favorites]


How is it that Canada has public health care, incredibly low college tuition, AND lower corporate taxes?

Because it's only the federal corporate tax rate that is lower. BK+Tims will still have to pay provincial corporate taxes, which are quite hefty in Ontario. Public health care and university funding both come in at the provincial level, with assistance from the federal government -- so things still get taxed, just at different levels.

I saw a number on HN (that I am having difficulty finding now, admittedly) that said that they would only see a 1% reduction in their taxes, which is a lot of money but not earth shattering.
posted by grandsham at 11:48 AM on August 26 [3 favorites]


Maybe Kid CEO heard that they let 18-year-olds drink in Canada, so he's like OMG U GUYS WE'RE MOVING THE COMPANY WHOO-HOO KEGGER.
posted by Strange Interlude at 11:49 AM on August 26 [15 favorites]


To call Tim Horton's the equivalent of Dunkin' Donuts is a little off. Tim's is a state of mind for Canadians.

When Canada came out with new (colored) quarters ten years ago, they distributed them to Tim Horton's three weeks before they gave them to banks, because they knew it would get them into circulation faster.
posted by Etrigan at 11:49 AM on August 26 [14 favorites]


This article covers some of the "it's not just about dodging taxes" side of things: Burger King Wants to Cut its Exposure to Hamburgers, Not Just Taxes
posted by grandsham at 11:49 AM on August 26


Canada spent less per capita government dollars on healthcare even before the aca passed (with statistically similar outcomes to USA). I think because they don't have a medical culture that engages in aggressive intervention for elderly/dying patients.

Also a quick Google shows that the cost of a PET scan in BC $1300, in California $10, 000 in Mississippi $3200.
posted by Zedcaster at 11:50 AM on August 26 [1 favorite]


I'm not sure what Tim Horton's coffee is like in Canada but here in Maine it is the worst substance I can imagine drinking without organ failure.

That said, everyone here is obsessed with Dunkin Donuts coffee which is similiarly vile so I can't really make fun of Canadians.
posted by selfnoise at 11:51 AM on August 26 [7 favorites]


Interestingly, Burger King has done a lot of crazy corporate stuff lately apparently because their CEO is 33 years old - pretty insanely young for a CEO.

You know who else did a lot of crazy things when he was 33 years old?
posted by ennui.bz at 11:52 AM on August 26 [24 favorites]


How is it that Canada has public health care, incredibly low college tuition, AND lower corporate taxes?

I think people tend to underestimate the scope and reach of American social programs (there is nothing like the food stamp system in Canada, for example) and also underestimate the greater purchasing power enjoyed by Americans. There is a lower cost of living in the States.
posted by Nevin at 11:52 AM on August 26 [3 favorites]


CEO Baby is not the guy moving Burger King to Canada. That would be 75-year-old brazillionaire Jorge Paulo Lemann, who owns (most of) the company.
posted by theodolite at 11:52 AM on August 26 [5 favorites]


According to Tim Hortons, the answer—as it unceasingly has been for the past two decades—is the pursuit of international growth.... Were it not for opening scores of new stores every year, Tim Hortons growth in Canada would be paltry.

I'll ask a question from the Canadian side: Why does Tim Horton's have to be so obsessed with growth? Isn't "making boatloads of profit" good enough for investors?
posted by clawsoon at 11:52 AM on August 26 [5 favorites]


You know who else did a lot of crazy things when he was 33 years old?

John Candy.
posted by Nevin at 11:53 AM on August 26 [7 favorites]


You know who else did a lot of crazy things when he was 33 years old?

I did, how did you ever find out?
posted by jeather at 11:54 AM on August 26 [9 favorites]


Fuck do I ever loathe Tim Hortons. All my life it's been rammed down my throat that it's this Canadian 'institution' that I should praise and identify with and take pride in.

I don't want a Canadian institution. I want diverse and unique places that I'll remember eating and drinking coffee at. Every year when I roadtrip around there's less of those and more identical boxy Tim Hortons stores. To me there's no better symbol of how bland and homogenized this country is getting.
posted by mannequito at 11:54 AM on August 26 [26 favorites]


God, what next, Wal-Mart buying Canadian Tire?
posted by kmz at 11:54 AM on August 26 [3 favorites]


It's less true now, but you used to be able to tell where the suburbs began in Canadian cities by where the Timmies started appearing on every corner and the Starbucks vanished.
posted by bonehead at 11:56 AM on August 26 [2 favorites]


I haven't been to a Tim Hortons in years. Every time I try to go there's a line-up out the door and the drive-thru is a gong show. I look around and say "What the hell is wrong with you people?!" and then I walk out.

The coffee tastes like swill, but I don't know; they put something in it. I was seriously addicted to the stuff for a number of years.

In the 80s and early 90s a typical Tim Hortons restaurant was a dark, smoke-filled, brown brick building that served coffee and donuts and ashtrays. During the day it was full of old people who smoked and drank coffee, and during the night it was full of teenagers who smoked and drank coffee. I miss those old Tim Hortons.
posted by i_have_a_computer at 11:56 AM on August 26 [8 favorites]


"King Tim's" (obviously that is what the merged entity is going to be called) should buy Beaver Tails Inc. (Beaver Tail is the unbelievably most delicious fried dough invention ever and is an Ottawa local specialty, of all places, but has not spread very far at all and is only available in a very few random places like on top of a mountain outside Vancouver, and in Saudi Arabia and Colorado because of SOCIALISM) and put one of their stores or stalls on every damn corner in North America.
posted by Bwithh at 11:56 AM on August 26 [2 favorites]


To call Tim Horton's the equivalent of Dunkin' Donuts is a little off. Tim's is a state of mind for Canadians.

You may be right in terms of the whole country, but in New England, oh boy are you wrong. The number of Dunkin Donuts' per square mile is truly amazing. Krispy Kreme tried to get a foothold a few years back and got completely shut out. Starbucks has made headway, but only in certain market segments.

I'm not sure what the numbers truly are, but I can tell you anecdotally that a huge percentage of people in MA start their day at DD.

(also, there's like 1 Tim Hortons I've ever seen in the US, and it's in CT I believe, and it was super disappointing, so, not excited about the prospect of more)
posted by tocts at 11:57 AM on August 26 [10 favorites]


Speaking as a Canadian, I have to say that their coffee is vile, vile stuff. And their stores are a bit like Mos Eisley, such is their clientele and ambience.

I'll never forget the time I dropped into a Tim hortons only to realize that it was invested by bees, and no one else seemed to notice or care. It was like a scene out of the X-Files.
posted by Yowser at 11:57 AM on August 26 [25 favorites]


Oh, and their stores have a twenty minute seating limit. Which is exactly what customers don't want in a café.
posted by Yowser at 11:59 AM on August 26


I miss those old Tim Hortons.

I don't necessarily miss the smoking, but I do miss the in-house baked goods. There was a time when they didn't ship in everything, and it was great. Now it's just bad coffee and baked goods that are shipped in frozen from across the country. The whole thing just seems to be surviving on consumer inertia.
posted by papercrane at 12:01 PM on August 26 [9 favorites]


Clawsoon: the first lesson we were taught in B-School is "grow or die," and all the evidence backs that up.
posted by Yowser at 12:01 PM on August 26


I'd boycott them.. but I haven't gone in perhaps 10 years anyway?
posted by nickggully at 12:01 PM on August 26 [1 favorite]


I used to work above a combination Tim Horton's/KFC. Yeah. Also it was the size, and had the general ambience, of the handicap stall in a highway rest station.
posted by 2bucksplus at 12:01 PM on August 26 [3 favorites]


I was an American expat living in Toronto for a few years, and I never understood the obsession with Tim Horton's. I had surprisingly vigorous debates about where Timmie Ho's stands in the hierarchy of fast food quality. My position is that it is near the bottom rung, along with Taco Bell, whereas my Canadian comrades generally seem to feel that it's near the top, closer to restaurants like Panera Bread.

I've tried several menu items, and I can confidently say I've never had anything at a Tim Horton's that I was able to finish. The donuts are, quite literally, the worst I have ever had anywhere in the world. They're much worse than the average grocery store donut in the US. I came to the conclusion that the average Canadian just hasn't ever had a good donut, so they don't know any better. As mentioned several times already, the coffee is absolutely vile. The sandwiches are worse than Subway. Just awful.

It makes perfect sense to me that they would merge with BK.
posted by drklahn at 12:03 PM on August 26 [16 favorites]


Interesting article, GuyZero. I love this bit for its slash-and-burn corporate cluelessness:
Schwartz and his co-workers are apostles of 3G’s ferocious approach to cost reduction. They talk about the need to instill everybody at Burger King with an “ownership mentality,” meaning mainly that employees should husband the company’s money as if it were their own.
Unless you're handing out stock options to your burger-flippers or building a successful corporate cult, there's no way that I see this working as a way to successfully motivate employees.
posted by clawsoon at 12:03 PM on August 26 [5 favorites]


Ah, memories...
posted by Atom Eyes at 12:04 PM on August 26 [2 favorites]


Came in to say what tocts just said above: anyone who thinks that Dunkin Donuts is a mere donut chain has not been to Massachusetts &/or Rhode Island. In these states, my current and my original home, DD is just one step away from being a bonafide cult.

Hell, they renamed the Providence Civic Center after DD.
posted by jammy at 12:05 PM on August 26 [6 favorites]


I'd boycot BK but there's only one in my city and I haven't been in there in twenty years.
posted by octothorpe at 12:07 PM on August 26


This will lead to the Poutine Whopper. Mark my words.
posted by delfin at 12:07 PM on August 26 [12 favorites]


My favorite thing about Tim Hortons is the tagline "Fresh, friendly, familiar" and that it doesn't make any claims about taste. The food won't be old, people will be nice, and we're not going to startle you in any way.
posted by the jam at 12:09 PM on August 26 [27 favorites]


Their coffee is fine. It isn't good, but it's perfectly adequate drip coffee. Sure, you can get better coffee, but not all that easily at the price. Their ice caps are pretty good, if somewhat too sweet. I'm not a fan of doughnuts in general, so I have no opinion on theirs. Their sandwiches are not Panera, but I'd say they're pretty much at the level of Subway.


But they're everywhere, and they're predictably acceptable quality, and they're not too expensive, and other than an occasional downtown location near a university, they've also dumped the 20 minute limit.
posted by jeather at 12:09 PM on August 26


The whole thing just seems to be surviving on consumer inertia.

So much this. How something so completely shit could have the chumps lined up for the drive thru all the way out the parking lot blows my mind.
posted by Meatbomb at 12:10 PM on August 26 [4 favorites]


I went to BK a couple weeks ago, for the first time ever. I was super hungover and needed carbs and sparkling water with sugar. I got some tater tots and a large pop. It cost about 7 american dollars and the tater tots were terrible. I didn't think it was possible to ruin tater tots, especially when you have a deep fryer. In conclusion fuck burger king.

I do have a question re: Tim's. Is it like Waffle House in the South? If so I completely understand how the beautiful combination of terrible food, terrible coffee and air thick with cheap tobacco combine into something magical.
posted by kittensofthenight at 12:10 PM on August 26 [3 favorites]


My tongue-only-partially-in-cheek angry suggestion to end tax inversions is to declare assets inside our borders abandoned and nationalize them. I'm sick of capital being mobile and labor having to bear the burden.
posted by ob1quixote at 12:10 PM on August 26 [12 favorites]


Shipley Do-Nuts are superior to Duncan Donuts, Krispy Kreme, et al. This is a true fact proven by Science.
posted by echocollate at 12:11 PM on August 26 [4 favorites]


"Burger King" could easily rebrand itself through the magic of the anagram in Canada as "Bugger Rink," which would have to have a certain homey appeal for all those hockey-mad Canadians, no? And Tim Horton's could save on a similar rebranding (who needs new signage when you can just rearrange the letters on the old signs) and break into the American market as "Moist North." What better name to combat both the association of Canada with a frozen wasteland AND the seductive appeal of moisture in a drought-afflicted land (perhaps not so good for the North East market in the states, though)?
posted by yoink at 12:11 PM on August 26 [15 favorites]


I will not drive longer than 1h30 without a coffee from Tim. But I will also not drink Tim's coffee outside of my car. Go figure.

I once drove to Florida (and back), I was SO HAPPY to find that Tim in Pennsylvania on the way back!
posted by coust at 12:16 PM on August 26 [1 favorite]


Burger King doesn't really have all that many burger-flipping employees anymore. It sold all but 52 stores (out of a total of 13,000+ franchises worldwide) and primarily collects royalty fees. Placeholder for joke about The King and royalties. At the same time, their employee headcount went from 38k to 2,425 in the past year. I recommend this poorly-framed but very interesting Business Week article, which is more about the machinations of private equity ownership than anything else.
posted by 2bucksplus at 12:18 PM on August 26 [1 favorite]


Based on my one visit to a Tim's, in Victoria, I hope Burger King brings with them some brooms, mops and squeegies and teaches the staff how to use them.
posted by George_Spiggott at 12:18 PM on August 26 [2 favorites]


I do have a question re: Tim's. Is it like Waffle House in the South?

If the Tim's all over the country are like the ones in Ohio, it's less of a greasy-spoon ambience and more like Dunkin Donuts crossed with the cafeteria at an old folks' home. There is a distinct sense of inertia at every Tim's I've been to. Granted, I've never been to one when I haven't been hung over, but still.
posted by Strange Interlude at 12:21 PM on August 26 [3 favorites]


It's too late anyway, Tim Hortons already infiltrated the American subconscious with a psyops Hollywood product placement campaign.
posted by Bwithh at 12:24 PM on August 26


There is nothing I can eat at a Tim Horton's--the cargo cult mentality of it still mystifies me lo these five years in Canada--but it is a brand I very much associate with Canada now. I was sort of sad about BK's interest in buying it when Shepherd told me about how Wendy's bought most of it, so yeah, that horse has already left the barn.
posted by Kitteh at 12:24 PM on August 26


I am fussy about my coffee at home, but when I'm on my way to work Tim Hortons will serve up an extra large bucket of coffee for $2 and it tastes pretty darn good first thing on Monday morning. Also their ham and swiss sandwiches are one of the healthier things one can pick up in a hurry. Also also, you can buy a pack of 10 Timbits for like $2.50 and I have used it many many times to bribe coworkers to do unpleasant tasks.

Basically if I could choose any fast food outlet to be next to my office, it would absolutely be Tim Hortons.
posted by jess at 12:25 PM on August 26 [1 favorite]


At the New York Times, Josh Barro points out that this isn't a tax inversion in the way so many have objected to on other deals - the result will be a majority Canadian company by many measures: Don’t Get Mad if Burger King Gets Canadian.
posted by twsf at 12:25 PM on August 26 [1 favorite]


TH is popular because primarily they're quick at rush times, they offer high consistency of product and they are very affordable. Fast, familiar and cheap, that's their formula.

IME, they beat almost every other fast food chain in every one of these respects. They own takeaway breakfast in Canada, cleaning MacDonald's clock. For the past few years, they've been doing very well in lunch too. Their main direct competitor for lunch is Subway and they beat them on price on many items too.

Their coffee is a robusta drip. It's no surprise that their classic is the double-double (cream and sugar). This is a beverage not for connoisseur coffee drinkers or to linger over, but for people who want a jump start of calories and caffeine in the morning. It tastes the same from St. John's to Victoria to Fort Mac. They sell a lot for home use too, in those five pound tins of theirs. They've successfully trained Canada to think that this is what (unassuming) coffee tastes like.

BK is getting a very well-run operation which knows its market exceptionally well.
posted by bonehead at 12:26 PM on August 26 [2 favorites]


tim horton's is weird - weird metallic aftertaste to the coffee, weird metallic aftertaste to the chocolate donuts

i have no idea if it's like that in canada
posted by pyramid termite at 12:27 PM on August 26


The effective corporate tax rate in the U.S., which combines national, state, and city-level tax rates, is nearly 40 percent—the highest across all 34 Organization for Economic Cooperation and Development (OECD) member countries.

It looks like this has been changed since this was posted, which is good, because it's wrong. It now says the US has the highest nominal rate, which is totally different from the effective rate, which is what companies actually pay. The US effective tax rate is about on par among OECD countries. But that is also largely meaningless because each company pays a different effective tax rate.
posted by ultraviolet catastrophe at 12:27 PM on August 26 [4 favorites]


Yowser: Clawsoon: the first lesson we were taught in B-School is "grow or die," and all the evidence backs that up.

I'm no financial wizard, but doesn't Warren Buffett keep talking about how great an investment See's Candy was, even though attempts to expand beyond the area where it had strong brand loyalty failed? That seems like a reasonable parallel to the situation of Tim Horton's, which has a fanatical following in Canada but fails elsewhere.
posted by clawsoon at 12:30 PM on August 26 [1 favorite]


I ate in Tim Hortons in Ontario back in the 90s. The Canadian guys I was with seemed to love the place but I wasn't impressed. The doughnut that came with the sandwich was certainly an interesting change of pace, of course.

Fast-forward to recent times and I don't even have to leave town to visit one. There are two within the space of a mile and a half near me. They're both smaller and nicer than the one in Ontario but I'm still not impressed. Even when they have a Cold Stone Creamery in them.
posted by tommasz at 12:31 PM on August 26


I remember being startled by the appearance of a Timmie's near Piccadilly in London.
posted by Kitteh at 12:35 PM on August 26 [1 favorite]


huh. i love Tim Hortons.

Most of the Tims that I go to are clean, and have impeccable service.
Prices are good (compared to other FFood joints) and the workers are usually quick and nimble, and don't waste any time.

Sometimes, I feel like I end up leaving more in tips than I do for the actual food becuase I'm so impressed.

Maybe it's just my experience.

I haven't had BK in a while, but all this talk is making me hungry for a whopper or 2 right now!
posted by bitteroldman at 12:37 PM on August 26 [1 favorite]


tim horton's is weird - weird metallic aftertaste to the coffee, weird metallic aftertaste to the chocolate donuts

that's the taste of socialism, son
posted by murphy slaw at 12:39 PM on August 26 [14 favorites]


The donuts are...much worse than the average grocery store donut in the US. I came to the conclusion that the average Canadian just hasn't ever had a good donut, so they don't know any better.

I'm usually the last Canadian to defend Timmy Ho's, but grocery store donuts in the US are disgusting. Most of them feature beef or pork tallow or lard in the first few ingredients; Tim Hortons donuts haven't had that stuff in them since the last century. So the grocery store donut is going to taste richer, but be commensurately more vile.

That said, Tim Hortons coffee is fucking tragic.
posted by Beardman at 12:39 PM on August 26 [3 favorites]


Canada? Would you take Sonic's from us? Thanks in advance.
posted by dances_with_sneetches at 12:39 PM on August 26


there's like 1 Tim Hortons I've ever seen in the US, and it's in CT I believe

No, there's a bunch in Michigan and even Indiana maybe? And there's like 3 in NYC. Anyway, not much success in cracking the American market, but they're trying.
posted by GuyZero at 12:40 PM on August 26 [1 favorite]


I am old enough to have watched Tim Horton play hockey. I even have one of his game used sticks. I am hoping big time that this merger results in a Luther burger or should I say a Lu-Whopper?
posted by 724A at 12:41 PM on August 26 [2 favorites]


The effective corporate tax rate in the U.S., which combines national, state, and city-level tax rates, is nearly 40 percent
Hahahaha. Find me a company paying anywhere close to that and I'll show you someone too crazy to hire tax advisers. From the GAO's 2013 report (emphasis mine):
For tax year 2010 (the most recent information available), profitable
U.S. corporations that filed a Schedule M-3 paid U.S. federal income
taxes amounting to about 13 percent of the pretax worldwide income
that they reported in their financial statements (for those entities
included in their tax returns). When foreign and state and local
income taxes are included, the ETR for profitable filers increases to
around 17 percent.
The inclusion of unprofitable firms, which pay
little if any tax, also raises the ETRs because the losses of
unprofitable corporations greatly reduce the denominator of the
measures. Even with the inclusion of unprofitable filers, which
increased the average worldwide ETR to 22.7 percent
Statutory maximum rates != paid rates. This is true in all implementations of tax law.

Anyone writing a "serious" article that tries to promote the idea that corporations here are paying 35%+ tax rates is either dangerously stupid or deliberately lying. I leave it as an exercise to figure out which of these apply to Mr. Ferdman and the WaPo editorial staff.
posted by introp at 12:41 PM on August 26 [10 favorites]


I for one welcome our new King Horton overlord.
And tremble in anticipation of my first taste of the Double Double Whopper.
posted by Kabanos at 12:41 PM on August 26


I'm pretty sure this is all just an attempt to fulfill the prophesy of the Ziox civilization and install Zap Rowsdower as the new "Burger-King."
posted by TheWhiteSkull at 12:45 PM on August 26 [5 favorites]


The donuts are...much worse than the average grocery store donut in the US. I came to the conclusion that the average Canadian just hasn't ever had a good donut, so they don't know any better.

This is a fairly recent thing. Maybe 15 years or so. They used to make the donuts in house. Now they get them trucked in.

Their motto used to be "Always Fresh." I think it might still be, even. But everything at Tim Hortons is stale as fuck.
posted by Sys Rq at 12:45 PM on August 26 [1 favorite]


Since they were one of the loudest whiners about the changes to the Temporary Foreign Workers' program, I've assumed that Tim Horton's haven't been super-profitable. Otherwise, they wouldn't require a structurally dependent class of workers who cannot complain or switch jobs without taking a big risk of losing their status in Canada.
posted by Kurichina at 12:45 PM on August 26 [4 favorites]


The hate on for Timmies in this thread kind of surprises me. Seriously? When Harvey's exists?

Timmies is fine. Just get cookies or a scone.
posted by syncope at 12:46 PM on August 26 [3 favorites]


Yeah, I love Tim Horton's too, and I'm hurt by all the hatin' on it. I like my americanos from Starbucks or the local coffee shop, but for drip coffee on the go, Timmie's is the best. Are there any Canadian's here who have tried the Tim Horton's coffee in the US? I don't get why Americans don't seem to like it. Is it different there? Seriously, I lived in the US for a while and Dunkin' Donuts coffee is disgusting, and the stores are unsettingly tacky.
posted by kitcat at 12:47 PM on August 26 [1 favorite]


My best read on this is from Bloomberg View's Matt Levine, who is really the best and funniest if you are into finance. No bullsh*t and lies, but also doesn't dumb stuff down, doesn't simplify, takes finance seriously.

I think Bloomberg is the best news source ever. When they do a funny story in their matter-of-fact tone (their style guide="no adverbs") it's priceless.

"Now, you might naively say: I doubt a lot of multinational companies do a lot of business in Bermuda! But I just told you that was naive. The key tricks are really to:

put a lot of your income in Bermuda, and
then never pay U.S. taxes on it.

Inversion solves the second problem but not the first. The first can be solved, though. For instance, if you are a drug company, it costs you like a dollar to make a pill, and you sell it in the U.S. for $10,000. You might say, "well OK then I have $9,999 of net income in the U.S.," but again you are being naive. The right answer is:"

[...]

So if you want to use this deal as an example of why the inversion rules should be changed, be careful. For one thing, this seems like a pretty reasonable inversion, as inversions go. For another, even if the rules were changed to ban inversions, this inversion would still be allowed."

He is very smart. Used to be a Latin teacher or something.
posted by niphates at 12:47 PM on August 26 [16 favorites]


The hate on for Timmies in this thread kind of surprises me. Seriously? When Harvey's exists?




Hey now, both Harvey's and Timmie's can be fucking terrible together. It's not zero-sum.


Also Swiss Chalet. How do you get rotisserie chicken that fucking soggy?
posted by TheWhiteSkull at 12:49 PM on August 26 [5 favorites]


Oh god, id forgotten about Tim Hortons' love for the temporary foreign worker program. That's right americans, Canada actually allows (allowed?)importing people to work on the front lines at fast food restaurants. And to think you complain about H1Bs!
posted by Yowser at 12:49 PM on August 26 [5 favorites]


.
posted by oceanjesse at 12:50 PM on August 26


There's this office building near me, had a small family-run cafe on the main floor; coffee, sandwiches, etc. All of a sudden, their landlord decides that they can't sell coffee, sandwiches or pastries anymore. And they are going to lose their inside access to the building's lobby, so you have to go outside to visit them. This is a big issue here in Calgary, where the weather makes going outside prohibitive half the year. Sure enough, shortly afterward, Tim Hortons moves in, and they are selling everything that Kim can't, and they have lobby access. Whaddya know.

It's one thing that somehow Tim Hortons has brainwashed people into thinking that it is fair that a country half founded by the French should have people eating staggeringly mediocre pastries, or that somehow a tenuous connection to a dead hockey player makes you the most Canadian thing possible. Fine; marketing is what marketing is. But you know what's actually the most Canadian thing possible? A small family of immigrants, coming here and working hard. And all of their marketing might isn't enough to fight them fairly, they have to come in and stab them in the back too.
posted by Homeboy Trouble at 12:51 PM on August 26 [17 favorites]


I quite like the Harvey's veggie burger, thank you. Though given the amount of time it takes them to construct a burger based on your particular specifications, I have no idea why in the fuck they offer drive-thru service.
posted by Kitteh at 12:53 PM on August 26 [2 favorites]


The hate on for Timmies in this thread kind of surprises me. Seriously? When Harvey's exists?

When someone pays $11 billion for those oddly rubbery hamburgers, we'll start on the Harvey's hate.
posted by Sys Rq at 12:53 PM on August 26


The merger is not mainly about taxes; in fact, Tim Hortons and Burger King’s effective tax rates are basically the same.

posted by robbyrobs at 12:56 PM on August 26 [4 favorites]


I still like Timbits, and don't mind giving some money to a Canadian company.

Not so fast, BK: I said a Canadian company, not you, you tax dodging shit. You and I aren't speaking.
posted by tyllwin at 1:00 PM on August 26 [1 favorite]


Were it not for opening scores of new stores every year, Tim Hortons growth in Canada would be paltry.

confusedblink.gif
posted by aaronetc at 1:01 PM on August 26 [2 favorites]


there's like 1 Tim Hortons I've ever seen in the US, and it's in CT I believe

They're very common in western NY. Maybe more than Dunkies.
posted by ROU_Xenophobe at 1:06 PM on August 26


Were it not for opening scores of new stores every year, Tim Hortons growth in Canada would be paltry.

confusedblink.gif


No, it's true. They're always so crowded, no one goes to them any more.
posted by yoink at 1:06 PM on August 26 [4 favorites]


Lower tax rates get paid a little more because there are fewer loopholes (necessary at high tax rates) and less of a legal/financial industry developed in that country to dodge them. The US has the most developed tax-dodging industry in the world.

Also, American companies pay a premium for being able to use their government as a weapon against their competitors, suppliers, customers, and future customers, because it's really good at that.
posted by michaelh at 1:07 PM on August 26


The merger is not mainly about taxes; in fact, Tim Hortons and Burger King’s effective tax rates are basically the same.


eh. It totally is. Merced is just being fed. Look at the way its structured (the Matt Levine article is a good one). You don't do something like that until you are looking to minimize the hit from changing the cost basis. Unless you like paying bankers and lawyers. Which these guys don't.

The reality is that US tax code incentivizes capital investment and certain of kinds of productive costs - for someone like Burger King that's basically a royalty business they'll be paying the statutory rate as soon as they burn through what ever deductions they still have left from when they owned the restaurants.

That being said I suspect part of this is that 3G realizes they've already cut costs to the bone, and their revenue initiatives aren't working out, so buy Tim Hortons and repeat the cost cutting game. Keep the stock up.
posted by JPD at 1:20 PM on August 26


there's like 1 Tim Hortons I've ever seen in the US, and it's in CT I believe

Tim Hortons had been popping up all over in upstate NY for a while, though mainly in conjunction with something else, like a Coldstone ice cream place or as a drive through part of a convenience store. Then for a while the TOPS grocery chain (Buffalo based but has stores across upstate NY) was putting a Tim Horton's in every store -- and then weirdly abruptly a couple months later they scaled the almost-brand-new Tim Horton's in-store stores down to just a few humble coffee dispensers, with no doughnuts or other foods - I doubt most shoppers even realize TH are even there anymore, tucked away by the sad prepared foods counter and truly gross hot buffet (meatloaf and mac & cheese that will put you into a coma - but for only 5.99 a lb!).

For what it's worth Dunkin Donuts have made a big push around here too in recent years, more successfully, I would say. They're kind of the standard other store-made donuts are judged by. (Sorry, Wegmans.) That's not to say they're good; they're like the McDonalds of donuts.

As far as BK goes, every time I've ventured into one in the last decade, I have regretted it (even more than the regret I generally have after fast food burgers). A couple things I have seen on the web recently suggest that BK has been trying to branch out, giving up on ever really catching up to the McD share of the burger market.
posted by aught at 1:21 PM on August 26


Burger King has been dead to me ever since they replaced their chicken tenders with a McDonald's equivalent nugget, which are horrible.
posted by foxfirefey at 1:21 PM on August 26 [1 favorite]


Do people go to Dunkin Donuts primarily for the donuts, or for the coffee?
posted by kitcat at 1:24 PM on August 26


God, what next, Wal-Mart buying Canadian Tire?

Well, that's about the only way to make Canadian Tire worse.


I'm not a coffee drinker, and have never understood the crazy love of Tim's in this country. My wife tells me the coffee is mediocre, the donuts are nothing special...but their lunch offerings? It's not a regular place for me to go, but when we are on a road trip, a Timmie's sandwich is a welcome thing. They got lunch right.

What I'm curious about - there are a few joint Wendy's/Tim's locations around here. What happens with that? Anything?
posted by nubs at 1:24 PM on August 26


I quite like Wal-mar *and* Canadian Tire. Both are cheap and have tons of awesome, useful stuff.
posted by Nevin at 1:27 PM on August 26


20 Tim Hortons Secret Menu Items (the other 113 slides first go through bunch of Tim Hortons doughnut flavors then they go into 50 Most Canadian Foods then it goes into slides about 9 historical times the Canadian govt was smarter than the US and then ends with a Why Canada is Great type slideshow)
posted by Bwithh at 1:28 PM on August 26 [1 favorite]


I think Burger King should double down on their slow service and open some Red Robin/Five Guys-style restaurants that don't even pretend to be fast food. I'd try it.
posted by michaelh at 1:29 PM on August 26


What introp said. Nobody believes corporations pay 35% in taxes unless they are pushing an agenda.

Until last year I worked in Newmarket, a town of about 50k people that is also a suburb of Toronto. The Timmy's next to my office played host to not just government employees on their breaks, but contractors meeting with clients, a group of senior women having their weekly investors club meeting, and retired folks out for their morning outing. It's a legit community hub and the way people on this thread are looking down their noses at the station it holds in middle class Canadian society is distasteful.

If you're the type of person who can't understand why Stephen Harper has maintained his hold on the Canadian electorate for 8 years, the answer is that his party has found a way to speak to the swath of Canadians who do genuinely view Tim Hortons as a Canadian institution. I realize that this is cheap retail politics, but that doesn't make it any less effective in terms of winning elections.
posted by dry white toast at 1:32 PM on August 26 [9 favorites]


Hot water is a secret menu item?
posted by jeather at 1:32 PM on August 26 [1 favorite]


If you're the type of person who can't understand why Stephen Harper has maintained his hold on the Canadian electorate for 8 years,

Vote splitting. The CPC got 39.4% of the popular vote last election. I think I mentioned upthread that Tim's represents the Red State / Blue State divide in Canada (although, strictly speaking, the Tories are blue, and the Tories are red. If the NDP is orange I guess they must drink coffee at A&W).
posted by Nevin at 1:35 PM on August 26 [4 favorites]


I'm usually the last Canadian to defend Timmy Ho's, but grocery store donuts in the US are disgusting. Most of them feature beef or pork tallow or lard in the first few ingredients; Tim Hortons donuts haven't had that stuff in them since the last century. So the grocery store donut is going to taste richer, but be commensurately more vile.

I think we have a rift here that is not going to be bridged.
posted by atoxyl at 1:42 PM on August 26 [3 favorites]


What I'm curious about - there are a few joint Wendy's/Tim's locations around here. What happens with that? Anything?

My understanding is that those places are the result of the Tim Hortons/Wendy's merger, which ended in 2006, and which Burger King has apparently learned nothing from.

They're franchises, with the Wendy's and Tim Hortons owned by the same party. A great idea at the time, but after Wendy dumped Tim, probably a pain in the ass. I suspect a lot of those Wendy'ses will turn into BKs just so those franchisees can return to dealing with just one corporation again.

(In fact, this whole deal may be entirely about Burger King swooping in and stealing Wendy's rest stop market share.)
posted by Sys Rq at 1:44 PM on August 26


I'm not particularly impressed by Tim's coffee, and yet I drink one almost every day. The damn stuff practically fuels the country. We can't stop.
posted by davebush at 1:44 PM on August 26 [1 favorite]


Their coffee is pretty bland but you tell me where I can find better for $1.60 and I'll buy it. McDonald's doesn't count, that place is always a chaotic mess that puts me on edge just walking in. I prefer the taste of Starbucks and other fancypants coffee but at $2.25 a cup it's a nontrivial difference for me, and I'm guessing a bunch of other people. And you do get used to it - some kind of stockholm syndrome I guess, but I like it way more now as a ~weekly drinker than when I rarely drank it.

Tim's donuts are thoroughly mediocre but I've never had a donut anywhere near even that level in the US. Maybe you guys like different qualities in donuts or something. The few I've had while visiting have been almost inedible - dunkin donuts in particular were really gross, from what I recall.
posted by randomnity at 1:45 PM on August 26


I never understood why anyone thought their coffee was great, but the doughnuts have always been fine, and I am picky about doughnuts.
posted by pernoctalian at 1:47 PM on August 26


Harvey's is fine (for what it is).
posted by mazola at 1:49 PM on August 26


20 Tim Hortons Secret Menu Items

They don't have my favourite: half coffee-half hot chocolate. They just assume that one, I guess.
posted by bonehead at 1:50 PM on August 26 [1 favorite]


If the NDP is orange I guess they must drink coffee at A&W

Suddenly, after several decades, the time I saw current Canadian ambassador to the USA Gary Doer at an A&W in Dauphin, MB, in 1989 finally makes sense.
posted by Alvy Ampersand at 1:51 PM on August 26 [2 favorites]


Krispy Kreme failed miserably in Canada. I remember many people talking about how horribly greasy their donuts were. I think there's a real difference in preferences.
posted by bonehead at 1:52 PM on August 26 [1 favorite]


randomnity: "The few I've had while visiting have been almost inedible - dunkin donuts in particular were really gross, from what I recall."

Yeah, the donuts at Dunk's are lousy.
posted by Chrysostom at 1:52 PM on August 26 [1 favorite]


where I can find better for $1.60 and I'll buy it. McDonald's doesn't count,

McDonald's coffee in the UK is more like $2 (except the espresso, which is £0.89), but it's the best regular coffee of any high street chain, in my opinion.
posted by ambrosen at 1:55 PM on August 26 [1 favorite]


Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government Incorporation. The history of the present King of Great Britain Burgers is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.
posted by Ogre Lawless at 1:57 PM on August 26


They don't have my favourite: half coffee-half hot chocolate. They just assume that one, I guess.
posted by bonehead at 1:50 PM on August 26 [+] [!]


They have it - you have to go backwards, it was like slide 3 . ( I fixed the slideshow link in my comment to start on the hot water slide )
posted by Bwithh at 2:01 PM on August 26


What introp said. Nobody believes corporations pay 35% in taxes unless they are pushing an agenda.

I'm happy to be corrected, but I think your interpretation of the quotation is incorrect. Corporations pay income tax - corporation tax - on profit not income.

So you can both have a tax rate of 35% and pay 13% of your income in corporation/income taxes. Or indeed 0% of your income in taxes if you are loss-making.

But for a profitable company, every extra dollar of profit is indeed taxed at 35% or whatever. And profits are what pay shareholders and companies are judged on. So it's important to companies.

Or am I misunderstanding, being on the other side of the Atlantic?
posted by alasdair at 2:01 PM on August 26


dunkin donuts in particular were really gross

it's because they use Crisco in everything
posted by Bwithh at 2:02 PM on August 26


I don't think there's a red state/blue state thing going on with Tim Hortons vs. Starbucks. (Or if there was, not anymore.) Around here they're both omnipresent, but Tim Hortons does have a slightly frendlier feel. In Starbucks you're supposed to buy your overpriced cat urine and leave. In Tim Hortons you buy a slightly cheaper, marginally less urine-flavored concoction and can stay a while. It feels a little bit like the diners where everybody used to hang out, a standardized corporate recreation of our own recent past.
posted by Kevin Street at 2:06 PM on August 26 [2 favorites]


Krispy Kreme failed miserably in Canada. I remember many people talking about how horribly greasy their donuts were. I think there's a real difference in preferences.

When I finally tried a Krispy Kreme I was baffled by the enthusiasm with which their entree into the Portland area market had been greeted. A friend of mine cleared it up for me, saying that you have to eat Krispy Kreme donuts when they're hot, which presumably is why people were camped out like concergoers waiting for it to open on the first day.

Personally I think that's cheating: any donut tastes better when it's hot and fresh, being edible when you bring it home in a box is a pretty low bar to not get over. Otherwise, why offer the box at all?
posted by George_Spiggott at 2:08 PM on August 26 [2 favorites]


Timmie's is Rob Ford's favorite coffee shop.
posted by TheWhiteSkull at 2:09 PM on August 26


profit and income are the same thing.

Actually they are the same thing in the UK. The difference is on the top line of the income statement where we call that "revenue" in the US and its "turnover" in the UK (and anywhere else GAAP is a direct descendent of UK Gaap)
posted by JPD at 2:13 PM on August 26 [1 favorite]


The coffee tastes like swill, but I don't know; they put something in it

A fuckton of cream and sugar in my experience. It's like a hot melted coffee-flavored iced cream.

The donuts are, quite literally, the worst I have ever had anywhere in the world. They're much worse than the average grocery store donut in the US.


No accounting for some tastes, I suppose. Grocery store donuts are awful, in the US and elsewhere. Tim's donuts are fine, if you're into donuts. The sour cream glazed and honey crullers are the only ones I'll go for. Tim's aren't the best donuts I've ever had, but they're not bad. It's fast food. I honestly only notice a difference if I go to some kinda fancy frou-frou donut place--I don't find, say, Krispy Kreme or Dunkin Donuts on a whole other tier from Tim's.
posted by Hoopo at 2:16 PM on August 26


The coffee tastes like swill, but I don't know; they put something in it. I was seriously addicted to the stuff for a number of years.

Caffeine, maybe.
posted by Gelatin at 2:18 PM on August 26 [3 favorites]


Your brain adapts to conditioning. It wants what it knows will deliver the sweet sweet caffeine.
Drink any brand of coffee exclusively for a few weeks and you'll eventually think it's the best thing ever, and anything else will taste vile (which is what all coffee is, if you remove the addiction factor)
posted by rocket88 at 2:31 PM on August 26 [1 favorite]


It's a legit community hub and the way people on this thread are looking down their noses at the station it holds in middle class Canadian society is distasteful.

This is way overstated. I grew up in suburban Ontario, too. Tim's was not particularly highly-regarded as an "institution" in that regard. Any neighbourhood donut shop or the like that was open late and let you sit around for hours drinking cheap coffee and barely spending any money was as much a "community hub" as Tim's. It's just there's usually more Tim's around. Where I grew up you'd see the same thing at Country Style, or the local strip mall's sole proprietor donut shop.
posted by Hoopo at 2:32 PM on August 26 [4 favorites]


bonehead: "Krispy Kreme failed miserably in Canada. I remember many people talking about how horribly greasy their donuts were. I think there's a real difference in preferences."

It failed miserably in the North-East US too. Those things were horrible.
posted by octothorpe at 2:33 PM on August 26


Canadian Maple Donut. Your anti-Tim Horton's argument is invalid.
posted by usonian at 2:33 PM on August 26 [4 favorites]


I think we have a rift here that is not going to be bridged.
I for one support the eradication of animal fats from our confection recipes!

I plan to make a killing selling black-market bizcochitos...
posted by roystgnr at 2:42 PM on August 26


I just paid taxes on earnings on my superannuation to the IRS. It was in Australia, I don't have access to the money until I turn 67, I haven't paid into it since arriving in the US and I pay tax on it back in Australia. I had to pay a CPA $1800 to figure out my liability because the rules are so fucking complicated.

All because assholes like these can't pay their fair share of taxes. And even when I do get caught in fucked up double taxation the assholes like these are still able to avoid it. Fuck Burger King. Fuck them.
posted by Talez at 2:45 PM on August 26 [4 favorites]


The most mind-boggling part about this thing from me is something in the article grandsham links to: apparently McDonald's is selling coffee in grocery stores now? Dur, wha?

I get ordering a coffee from McDonalds on the go and because there is one on the way wherever you are going. But who the fuck wakes up in the morning with the time to brew their own coffee and thinks "of all the brands I can make myself this morning, McDonald's brand is the one for me." I thought McDonald's was synonymous with shitty ingredients, but the understood tradeoff was that it would be fast, convenient and cheap.
posted by dios at 2:46 PM on August 26 [1 favorite]


In much the same way that you can buy Taco Bell taco seasoning packets at the grocery store. Because people are fucking horrible.
posted by aaronetc at 2:47 PM on August 26


apparently McDonald's is selling coffee in grocery stores now? Dur, wha?

Everybody's standing up in a grocery store. No lap, no problem.
posted by George_Spiggott at 2:47 PM on August 26


Link about McDonald's in grocery stores.
posted by dios at 2:48 PM on August 26


It's a legit community hub and the way people on this thread are looking down their noses at the station it holds in middle class Canadian society is distasteful.

It's a community hub in the way that it's just a space. I grew up in rural BC where Tim's had not yet covered the land, and the community hubs there were also often fast-food/coffee places. Subway was the usual hangout place, and then local coffee shops, and then probably churches or other places. Or there was the sidewalk outside the gas station or the logging roads.

I don't think Tim's has any special mojo that makes it important. It's just the fact that it is a quiet place and, in those small towns, probably the only place to hang out for cheap.
posted by smasuch at 2:56 PM on August 26 [1 favorite]


> Canadian Maple Donut. Your anti-Tim Horton's argument is invalid.

Fun fact - these are usually the last ones left in a box in my sampling of Ontario workplaces. People just don't go for the fakey maple taste.
posted by scruss at 2:57 PM on August 26 [1 favorite]


When I was a kid Tim Horton's was a place for old men to sit, smoke and read the paper, like every other doughnut shop.
posted by The Card Cheat at 2:58 PM on August 26 [1 favorite]


Personally I think that's cheating: any donut tastes better when it's hot and fresh

Actually, this just isn't true. Dunkin Donuts and most cake-style donuts might taste a little better, if anything. But Krispy Kreme tastes a LOT better. And it's the hot part more than the fresh part - you can just pop the KK into a microwave for a few seconds to get that taste back.
posted by me & my monkey at 3:05 PM on August 26 [3 favorites]


What ever the tax rates nominally are, if Burger King only payed 27.5% tax last year, and Tim Hortons paid 26.8%, how is this story all about taxes?
posted by adamt at 3:09 PM on August 26


You know who else did a lot of crazy things when he was 33 years old?

Alexander?
posted by Carillon at 3:22 PM on August 26


Tim's is, and this can not be overemphasized, fucking disgusting.
posted by five fresh fish at 3:25 PM on August 26 [1 favorite]


Tim Horton's coffee tastes like coffee the way a Big Mac tastes like a hamburger.
posted by The Card Cheat at 3:46 PM on August 26 [3 favorites]


The best thing here is that a company worth only $10 billion is somehow paying $11 billion for something that's worth only $8 billion.

If I walked into a store with ten bucks in my pocket, and there was a thing there priced at eight bucks, why would I pay eleven bucks for it, and how would I even do such a thing?

Sometimes it almost feels like the entire global system of finance is just making shit up as it goes along!
posted by turbid dahlia at 3:50 PM on August 26 [8 favorites]


I found this site: www.insidetimmies.com. It is a Tim Hortons fan, news, humour, and reviews site which says it is not affiliated with Tim Hortons the corporation in any way.
posted by Bwithh at 3:51 PM on August 26


It now says the US has the highest nominal rate

Marginal rate. And that's what matters in tax planning, because dividends from abroad are marginal income.

So the higher marginal rate is, in fact, driving these transactions.
posted by jpe at 3:51 PM on August 26 [2 favorites]


What ever the tax rates nominally are, if Burger King only payed 27.5% tax last year, and Tim Hortons paid 26.8%, how is this story all about taxes?

Because the 27.5% is the worst sort of cherry picking. When you read stories about companies with low effective rates, the authors are using the current tax expense. The 27.5% is the total tax expense which includes both current and deferred tax. IOW, eliminate the tax on foreign income and that 27.5% would drop further.
posted by jpe at 3:54 PM on August 26


I recommend an interview with Nobel winner and economist Joseph Stiglitz, where he points out that our tax system rewards moving jobs offshore, instead of giving breaks for creating jobs at home. He also points out that demand creates jobs, and when too much money is made at the top, it isn't spent domestically, if at all, and the economy suffers, giving a reason for progressive taxation.
posted by Brian B. at 3:57 PM on August 26 [1 favorite]


Having read some of Stiglitz's thoughts on taxes, I would read them skeptically. He doesn't have much of a grasp on how other systems work. It's like reverse exceptionalism.
posted by jpe at 4:01 PM on August 26


I'm going to read this thread, but this just seems like yet another dismantling of Canadian heritage (as silly as that may sound) in favour of corporate interests.

I would question, however, the prevailing wisdom that this is motivated by saving on taxes. See:

How much BK is paying for Tim's: $11 000 000 000.00
How much BK is saving in taxes: $____12 000 000.00

Tim's revenue is what BK wants. And, I suppose, evading US corporate taxes on that revenue.

It's also worth noting how very different TDL's advertising is in the US versus Canada. South of the border it's called Tim Horton's Cafe and Bake Shop, and the couple of commercials I've seen on American channels have hyperfocused on sickly-sweet drinks which only bear a passing resemblance to coffee, and sweet baked goods. In Canada, the ads focus more on heritage/family and COFFEE and their ever-increasing bewildering array of pseudo-healthy fast food products. I have no idea what, if anything, this means.
posted by feckless fecal fear mongering at 4:08 PM on August 26


If I walked into a store with ten bucks in my pocket, and there was a thing there priced at eight bucks, why would I pay eleven bucks for it, and how would I even do such a thing?

Sometimes it almost feels like the entire global system of finance is just making shit up as it goes along!


Well. It was priced for 8 bucks if you wanted to buy one. If you wanted to buy everyone in the entire world you had to pay 11 to convince everyone to give them to you. And if you didn't have eleven bucks in your pocket you put it on a credit card. Or maybe you hit up rich Uncle Warren for some cash if things are really tight.
posted by JPD at 4:08 PM on August 26 [1 favorite]


It's also worth noting how very different TDL's advertising is in the US versus Canada.

Whether the advertising is any different, the US Tim's I've been to all all pretty much identical to the Canadian ones. Like, completely identical.
posted by GuyZero at 4:12 PM on August 26


I would question, however, the prevailing wisdom that this is motivated by saving on taxes.

The argument would be that the premium they paid above what TDL would be worth to a similar Private Equity firm is equal to the value generated from avoiding future taxation on foreign earnings. Seeing as how BK's growth story is ex-US its kind of an important thing. Certainly though they aren't doing this thinking TDL is worthless.
posted by JPD at 4:14 PM on August 26


profit and income are the same thing.

Um - not really.

The fact that only chump businesses in America pay the full 35% is more an indicator of how screwed up the tax system is. Simplify and lower the rates and see what happens. Besides putting a lot of accountants out of work. But since a lot of accounting is being off-shored anyway, I don't see that as too much of a problem.
posted by IndigoJones at 4:17 PM on August 26


fffm, I'm assuming you got the $12 million number from this pullquote in the post?
So the BK move to Canada would mean that BK will stop paying taxes on profits it makes in Kuwait to the US government. However, since no Canadian company pays taxes on profits made in Kuwait in any event, Canadian governments would bring in no additional revenues. In BK’s case, this would save them in the neighbourhood of $12 million a year in US corporate taxes. Of course, Canada sees none of that money and essentially gains nothing from this deal.
So that $12 million is not how much BK would save (globally) in US taxes by moving to Canada - that $12 million is how much it would save not paying US taxes on profits it makes in Kuwait.
posted by flex at 4:20 PM on August 26 [1 favorite]


The tell its a tax thing is the way its structured. BK could have done this as a straight asset purchase, moved their HQ to Canada, offered the three board members to Canada and done the dual listing in NY and Toronto - and it would have been easier and cheaper than this bizarre unit thing they are doing.

Um - not really.

Yeah really. That article is about Gross vs Net. And its actually wrong. Gross income is what remains after the you subtract what it cost you to produce the products that you sold. Not simple turnover.

Colloquially Income and Profit both refer to what's left over after things are subtracted from them.

The fact that only chump businesses in America pay the full 35% is more an indicator of how screwed up the tax system is.

Chump probably isn't the right word. There are certain businesses that could be run by the smartest people in the world and still pay the full provision rate. Not to mention that tax books and GAAP books are different. Not to mention things like NOLs. Its complex. Even in places where the code is simpler.

The real problem is that it needs to be as onerous for a corporation to renounce its US citizenship as it is for a person.
posted by JPD at 4:28 PM on August 26 [4 favorites]


This morning I said to Man, "Man, we're going to have to boycott BK, because this is some bullshit right'chere."

And he said "Woman, do you even know where a BK is?"

And I said "No, but that hasn't stopped me from boycotting C.Fila. In fact, not knowing where they are makes it so much easier."

So, granted, there isn't one near me, and they've never been an important part of my dining reality, but henceforth, they have joined the Evil AntiGay Misspelled Chicken Corp as places that will not get any of my discretionary spending dollars.

If they don't want to pay American taxes, they can just live without my American dollars. Fuck them.
posted by dejah420 at 4:32 PM on August 26 [3 favorites]


My misunderstanding. Derp. I blame rampant insomnia for the past week.

I very rarely go to Tim's anymore--my ex and I used to drop in for a quick cheap bagel on weekend mornings if we didn't have time to make breakfast, but that's been about it for years, concurrent with basically just giving up coffee.

But when I used to go? Yeah, it really isn't about getting a Great Cup Of Coffee. It's about a cheap and efficient caffeine delivery system that tastes exactly the same no matter where you are in Canada. And the sour cream glazed doughnuts. Oh yes. On the spectrum of bad coffee, Tim's comes out basically on top, in kind of the same way that on the spectrum of good coffee (or, at least, coffee that's presented as being good) Starbucks comes out on the bottom.

Cheap, freshly made (the coffee at least; not the baked goods anymore, as noted above), and 10000000000% consistent. That's what allowed TDL to grow like a kudzu vine throughout Canada. And the sandwiches aren't bad.

What I find terminally weird about this deal is the number of new initiatives TDL has launched just within the past year; the CIBC Visa/Tim's Card comes to mind, and the new dark roast coffee. The latter was announced like, last week or something I think.

I think BK has sorely misunderstood how un-American this will appear to be to Americans, and how un-Canadian it's going to be to Canadians. If I were one of their franchisees in the USA, I'd be livid with anger about this.
posted by feckless fecal fear mongering at 4:34 PM on August 26


Most Americans aren't so fascist and won't care about how "american" BK is. The sort of people that care don't eat there anyways.
posted by jpe at 4:37 PM on August 26


> Whether the advertising is any different, the US Tim's I've been to all all pretty much identical to the Canadian ones. Like, completely identical.

The one time I've been inside a U.S. Tim Hortons it was identical to the Canadian ones...except that we were the only customers (in the middle of the afternoon). It was kind of eerie and my first impulse was to think something must be terribly wrong.
posted by The Card Cheat at 4:39 PM on August 26


If they don't want to pay American taxes, they can just live without my American dollars. Fuck them.

They don't want to pay American taxes on their revenue generated outside of America.

If BK makes millions of dollars in Kuwait, why should the US government get a cut? Unlike Apple, BK doesn't have much use of earnings domiciled overseas.
posted by GuyZero at 4:41 PM on August 26


You know who else did a lot of crazy things when he was 33 years old?

Yeah, 2nd Team All-Star, 3rd place in the Norris voting, and winning his 2nd consecutive Stanley Cup is a pretty crazy year, but for my money the craziest Tim Horton season is probably 68-69 when he put up both more points and took more penalties for maximum craziness, and at age 39 to boot.
posted by Copronymus at 4:47 PM on August 26 [3 favorites]


If BK makes millions of dollars in Kuwait, why should the US government get a cut?

Unless I'm mistaken, the US government demands a cut from private citizens on income earned overseas, no?

Corporations having it their way their cake and eating it too is fundamentally unfair to the populace.
posted by feckless fecal fear mongering at 4:47 PM on August 26 [1 favorite]


why should the US government get a cut? Because that's the way taxes work in the US? and if the company has reinvestment opportunities outside of the US it can still make them tax free? The only reason most companies want to bring the cash back to the parent company level is to either payout dividends - where the functional taxation rate =corporate rate+tax on divvy which is cap gains - where the US is actually going to be lower than most of the world, or to do a share repurchase where the functional tax rate is corporate and then the PV of the future cap gains (in theory) generated from the higher per share price when the underlying gets sold.

Its not just corporate tax that matters, its also marginal rates on dividends and cap gains. So in that sense the tax burden on the owners of US corporates isn't out of line.

It also matters because you can't have global taxation on personal income and not have global taxation of corporate income. It would be like Kansas where the first thing anyone did when they stopped taxing LLC's was to put anything they could into an LLC.
posted by JPD at 4:54 PM on August 26 [2 favorites]


Because that's the way taxes work in the US?

Well, tautologically, yes, but my point is that corporate taxes don't work this way in other countries, so why stick around in the US? Domicile shopping is hardly new and happen within the US pretty much every time a new auto plant opens up.
posted by GuyZero at 4:58 PM on August 26 [1 favorite]


Keep in mind that corporations don't pay taxes. Or rather they do, but it is passed on one way or the other. Higher product costs or reduced payroll are generally the way that taxes get paid.

I venture to say the vast majority of people who are upset about this are hypocrites who forget how they save on taxes. They ignore the various means people of all wealth status use to reduce their tax bill. I would especially love to see the tax returns of the politicians who are complaining about this. How much in taxes are they paying? What methods do they use?

People go to great lengths. Some fail to report income. Others make use of both adults filing head-of-household (using different addresses). People sell the use of their kids. People make purchases at the end of the year. And a million other ways including moving to a state with no income tax
posted by 2manyusernames at 4:59 PM on August 26


For those who think that the US can't have a separate tax regime for personal and corporate income tax with regards to overseas income, states already have separate tax regimes just for companies they happen to like a lot:

Toyota Motor Corp., the world’s biggest automaker, is being offered $146.5 million in tax incentives by Kentucky to expand a plant in the state that’s already the company’s largest in North America.

Why is there one set of tax rules for Toyota and another for Uncle Jed's tupperware factory? Because. Just because.

Congress could lower the rate on repatriated overseas corporate earnings anytime they want.
posted by GuyZero at 5:03 PM on August 26


Because everyone else should do what the US does?

Also the idea that you don't pay tax is silly - like say I own a french sub and I'm a US company - the difference I pay is from the 2% difference between US and French Statutory tax rates.

In practice US taxes are slightly higher than other developed world taxes, but the income generated from corporate shares is much lower - so its kid of a wash outside of a few places like Singapore where there are no or super low taxes paid.

The big repatriation issues mostly revolve around companies using tax dodges - like owning IP in Ireland or Singapore and then wanting to get the money back into the states. I don't feel a need to fix that problem.

At the end of the day after tax Return on Capital in the US is higher than the rest of the developed world. If the tax thing were really an issue that wouldn't be the case.
posted by JPD at 5:04 PM on August 26 [2 favorites]


[One comment deleted. Folks, please be decent to each other and act like you want to be in a conversation with people here. Thanks.]
posted by LobsterMitten at 5:08 PM on August 26 [2 favorites]


Burger Kings is a $10B company. It's not a massive company in the grand scheme of things...
posted by Nevin at 5:10 PM on August 26


Keep in mind that corporations don't pay taxes. Or rather they do, but it is passed on one way or the other. Higher product costs or reduced payroll are generally the way that taxes get paid.

And reduced cost of doing business through enforcement of contracts, streamlined legal processes, a well trained workforce, a stable society and a stable, secure customer base are amongst the many benefits corporations get from paying taxes. Very roughly similar to the benefits natural persons get from paying taxes, but with a great deal more ability to bend the rules and outlawyer the government, and dare I say it, less likelihood of having a conscience.

Painting taxes as a zero-sum game is disingenuous, and I hope you know it.
posted by ambrosen at 5:11 PM on August 26 [3 favorites]


For those who think that the US can't have a separate tax regime for personal and corporate income tax with regards to overseas income, states already have separate tax regimes just for companies they happen to like a lot:

Yes, they do. And its a bad thing. Its beggar they neighbor. Toyota (or any of the imports) was going to build a plant somewhere in one of the right to work states. That tax subsidy is a net negative for the US as a whole.
posted by JPD at 5:13 PM on August 26 [3 favorites]


Yes, the notion that taxes raise prices is sort of silly. Taxes are part of costs just like labour or cost of goods sold. I mean, by that logic you could say that BK would be more profitable if they didn't pay employees anything, in which case no one would work there. If BK had to do all their own meat inspection, hire their own private police force to keep restaurants secure and educate their employees for 12 years I doubt it would be cheaper than paying taxes.

That tax subsidy is a net negative for the US as a whole.

So this is a very excellent counterpoint to my argument. You are right.

However, given that the existing US corporate tax regime does bad things, why not do a few more?
posted by GuyZero at 5:17 PM on August 26


Do people go to Dunkin Donuts primarily for the donuts, or for the coffee?

The coffee, by far. I can't believe Dunkies even stocks so many different types of donuts; they've gotta be tossing a shit-ton of them every night.
posted by threeants at 5:18 PM on August 26 [1 favorite]


Burger Kings is a $10B company. It's not a massive company in the grand scheme of things...

Yeah, it's only Fortune 1000. Pikers.
posted by Etrigan at 5:20 PM on August 26 [1 favorite]


The sort of people that care don't eat there anyways.

Yeah, it's annoying that I'm going to have to buy something there for the first time, um... possibly ever, to the best of my recollection... before the move, or I won't be able to boycott them.
posted by George_Spiggott at 5:35 PM on August 26


However, given that the existing US corporate tax regime does bad things, why not do a few more?

Logically that's an argument for higher taxes in the rest of the world? Besides the fact that returns on higher in the US with higher taxes shows that the US is a fundamentally more attractive market to invest in than most of the rest of the world.

The real problem is growth in the US - which means a lack of productive investment opportunities, not returns. And I think we've spend the last thirty years disproving the idea that lower taxes neccesarily incentivizes growth.

Once you factor in personal + corporate rates the US is still at the low end of the tax curve.
posted by JPD at 6:03 PM on August 26


Well of course they should be somewhere with a monarchy.
posted by miyabo at 6:17 PM on August 26 [1 favorite]


I spent the summer I was 16 working night shift at a 24-hour Tim Hortons in a mid-sized town. After the late-night crowd cleared out, but before the shift workers started coming in, it would be just me, another teenage girl, one of the bakers (this was when things were still made in house), and the people who hang out at Tim Hortons smoking all night. For all the creeps I had to deal with, it was an incredibly fun summer. I could drink all the coffee I wanted and you meet some interesting characters at 4am in a Tim Hortons. I also honed my timbit-and-broom hockey skills. The coffee isn't great, but it's hot, fresh, full of caffeine, and relatively inexpensive. Sometimes that's really all you want.
posted by atropos at 6:23 PM on August 26 [2 favorites]


That Bloomberg article is great. TIL 80% of BK's revenue comes from the idea of the burger.
posted by BinGregory at 6:26 PM on August 26


I'm really curious about where all the people hating on Tim Hortons coffee go for coffee in the morning.

Starbucks? If you get the lightest roast they have, you get a slightly better coffee, but which costs 60% more. (That, and you wait in a line that's 15 minutes long.) If you get anything else, it's flavorless water brewed from charcoal bits. I could get the same effect by putting oven scrapings into my coffee maker.

Second Cup? Except for the lightest roast, it's expensive charcoal water, but at least it's expensive Canadian charcoal water.

Dunkin' Donuts? Consistent quality. Consistent bad quality. Served boiling in a foam cup so it never cools down and is harder to recycle. (Terrible donuts as well.)

Local café? As much as I'd like to sit around and read the newspaper, I have an office to get to, and I'd like to take my coffee with me. And most of these local places burn their beans nearly as badly as Starbucks.
posted by one more dead town's last parade at 6:46 PM on August 26 [1 favorite]


Doug Ford worried that there are more libraries in his ward than there are Tim Hortonses.
posted by TheWhiteSkull at 7:08 PM on August 26 [1 favorite]


I had a Tim Horton's coffee the other day and because it was in Quebec and my French was all flustered I ordered way too much cream and sugar and it was fucking delicious.
posted by thisclickableme at 7:19 PM on August 26 [3 favorites]


I think BK has sorely misunderstood how un-American this will appear to be to Americans, and how un-Canadian it's going to be to Canadians

Burger King was a British company for years and no one cared.
posted by octothorpe at 7:37 PM on August 26 [2 favorites]


I'm really curious about where all the people hating on Tim Hortons coffee go for coffee in the morning.

Starbucks? If you get the lightest roast they have, you get a slightly better coffee, but which costs 60% more. (That, and you wait in a line that's 15 minutes long.) If you get anything else, it's flavorless water brewed from charcoal bits. I could get the same effect by putting oven scrapings into my coffee maker.


The worst coffee I've ever had at Starbucks, which I believe was contaminated with some kind of cleanser, was many, many times better than Timmy's swill. Frankly if you didn't know it was supposed to be coffee, you could probably pass it off as an entirely distinct beverage.
posted by sevenyearlurk at 8:27 PM on August 26 [1 favorite]


Local café? As much as I'd like to sit around and read the newspaper, I have an office to get to, and I'd like to take my coffee with me.

Where do you live that the local cafés don't let you take your coffee to go? Probably somewhere where all the best ones have closed down and been replaced by those multi-national chains you mention.
posted by sfenders at 8:37 PM on August 26 [3 favorites]


Those two companies deserve each other. Let them merge, just be sure to kill their spawn.
posted by blue_beetle at 8:53 PM on August 26


Apparently Burger King made this decision almost immediately after appointing to their Board of Directors, the members of U2.
posted by 4ster at 8:54 PM on August 26 [1 favorite]


Former U.S. Secretary of Labor Robert Reich was on Chris Hayes' show tonight to discuss the merger. The money quote (so to speak) was something along the lines of "it used to be that American companies made something -- Burger King isn't a hamburger company anymore, they're a finance company."
posted by tonycpsu at 8:55 PM on August 26


Apparently Burger King made this decision almost immediately after appointing to their Board of Directors, the members of U2.

I don't get this joke at all but it still made me laugh
posted by threeants at 9:32 PM on August 26 [1 favorite]


Tim-Bitties in the BK lounge...
Forget the burgers, let's walk over to the donut store.
posted by woggle at 9:40 PM on August 26 [1 favorite]


Timmies coffee is insipid and foul, double double makes it just palatable as a sweet hot, coffee milk shake. The doughnuts are alright, when we lived overseas, a maple cream doughnut was a must everytime we came back for a visit. Their sandwiches and bagels are cheap, consistent and edible, perfect road trip food.

The closest store to my office in Calgary does business volume that is scales of magnitude more than the Second Cup or Starbucks. It's a good business, the tax is just icing on the doughnut.
posted by arcticseal at 10:41 PM on August 26


>States already have separate tax regimes just for companies they happen to like a lot.

>Yes, they do. And its a bad thing. Its beggar they neighbor ... That tax subsidy is a net negative for the US as a whole.

In principle, this is easy to fix. The IRS currently treats taxes paid by a company to a state as an income deduction for federal taxes. By symmetry, the IRS could just as easily treat subsides paid from a state to a company as an income increase and tax much of that money right back. States would just be transferring revenue from their own state to the U.S. Treasury.

However, this would have no chance of passing in Congress. Republicans like the race to the bottom because it keeps labor cheap.
posted by JackFlash at 11:07 PM on August 26 [3 favorites]


Apparently Burger King made this decision almost immediately after appointing to their Board of Directors, the members of U2.

I don't get this joke at all but it still made me laugh
posted by threeants at 9:32 PM on August 26
[+] [!]


U2 moved their assets offshore to avoid paying Irish taxes, but yeah, it is funny to imagine The Edge sitting in a boardroom and looking at a spreadsheet and remarking how he doesn't like how in the last quarter, they lost ground to Arby's.
posted by 4ster at 1:52 AM on August 27 [2 favorites]


Mazel Tov to Burger King on voting with their feet. If Obama wants to curb tax flight so much, then he should get his party together to lower the tax rate so people actually want to stay.
posted by corb at 1:55 AM on August 27


Race to the bottom, eh, corb? Say, how do you propose to pay for repairs to America's decrepit and failing infrastructure?

Republicans like the race to the bottom because it keeps labor cheap.

They say the poor have only themselves to blame. Get a job! Then they pass "right to work" laws, fight minimum wage, decimate their state economy...
posted by five fresh fish at 4:01 AM on August 27 [5 favorites]


OMG, corb, you're a parody of yourself sometimes. Thanks Obama!

Next you'll link BK moving to Benghazi!


If Burger King wants to do business in the US and with Americans, they can pay American taxes. It's not like the shit they call food is irreplaceable.

50% tariff on their US-made profits before they can go back to Canada should do the trick.

Fuck them. The reason they are in trouble to begin with is no one eats there anymore.
posted by spitbull at 4:14 AM on August 27 [4 favorites]


Also, I just visited a Tim Horton's for the last time too.

Funny how "patriots" in our midst hate America so much.
posted by spitbull at 4:16 AM on August 27 [3 favorites]


corb: then he should get his party together to lower the tax rate

"His party" has offered to do lower the rate from 35% to 28%. All they're asking for in return is to close loopholes that lead to companies paying nowhere near either of those numbers.
posted by tonycpsu at 5:34 AM on August 27 [5 favorites]


Canadian Maple Donut

Which is actually fake maple topping on a boston cream doughnut (yes BOSTON!). In french labelled Tims they call it "Boston a l’érable".

This doughnut as an interesting duality during the playoffs in Mtl.

But absolutely my favorite (but not during playoffs).
posted by coust at 5:42 AM on August 27 [1 favorite]


>Were it not for opening scores of new stores every year, Tim Hortons growth in Canada would be paltry.

confusedblink.gif


I think I understand what this means (but I certainly could be wrong). Opening a new store results in sales that weren't there the year before -- growth of a sort. But that can mask the fact that sales in previously-existing stores show only a little growth (or decline, even). So it's a temporary way to make the numbers look good, but not sustainable in the long run.
posted by oakroom at 7:39 AM on August 27


It can. Also depends, though, on whether you're entering new markets or oversaturating existing ones.

Also this endless growth thing just pisses me off in general terms. Yeah, yeah, stockholders shmockholders. Endless growth isn't mathematically possible. Not everyone can afford, or will want to, buy your product. Argh. Plus, slow and steady organic growth is a strategy more likely to win long term. But these capitalist vultures give no fucks about what happens tomorrow, let alone ten, twenty years from now.
posted by feckless fecal fear mongering at 7:49 AM on August 27


So actually reading all these articles finally I was under the impression that maybe Canada had a different foreign earnings tax regime than the US but maybe I'm wrong there. I'm not sure that this is about taxes at all really, although I'm also not sure what the advantage of re-incorporating is either. An acquisition to goose growth numbers, sure. Maybe it is about marginal rates and anticipated growth. But I don't think it's about taxation of foreign earnings like I did before.
posted by GuyZero at 8:53 AM on August 27


I think there is a big component of the 3G guys wanting to push their "model" onto another fast-food chain, but the only plausible explanation for the weird units thing and the fact its structured as a reverse merger is that its at least partially about tax.

I also have no idea how the weird unit thing works. Its like a weird derivative that somehow means you don't have to take the gain on the your new tax base until you want to? You'd never do that unless you really wanted to re-domicile for some reason.

I ask the Canadians - is it even plausible that Harper's government would have declared Tim Horton's a strategic asset if this had been structured as a traditional deal? I know fuck all about Canadian politics - but even when the French did that with Danone the rest of world thought the were crazy. And that's France.
posted by JPD at 9:01 AM on August 27


As TH has little to do with the oil industry, it seems highly unlikely he would interfere. He's let larger companies go without comment.

Anyway this is being sold as "Big US company moves to Canada!" in the popular press, so it's unlikely to cause much public discontent either.
posted by bonehead at 9:11 AM on August 27


The major foreign investment he's turned down has been an Egyptian attempt to buy one of the cell carriers. He's let sovereign Chinese and other foreign state investment into the oilsands without an eyeblink.

It seems very far fetched to me that he'd try to defend TH from Brazilian ownership, unless he was trying to make a point. We're not in a major conflict with Brazil right now---there was some spy stuff earlier in the year, but that seems to have blown over.
posted by bonehead at 9:17 AM on August 27


Anyway this is being sold as "Big US company moves to Canada!" in the popular press

God I hate our media outlets sometimes. If you're just going to parrot PR releases at least bloody well say so. "Big US company swallows Canadian icon whole and moves to Canada in some kind of weird tax dodge" would be more accurate. Clunky, I suppose.
posted by feckless fecal fear mongering at 9:43 AM on August 27 [2 favorites]


"Big US company swallows Canadian icon whole and moves to Canada in some kind of weird tax dodge"

It's not the first time, though. Wendy's, remember?

This is barely anything. I'm honestly surprised anyone cares.
posted by Sys Rq at 10:13 AM on August 27


Yeah, I know about Wendy's. Even so.
posted by feckless fecal fear mongering at 10:25 AM on August 27


If Burger King wants to do business in the US and with Americans, they can pay American taxes.

Do they not? Presumably there's US tax on the sales and revenue they generate in the US, no?
posted by Hoopo at 10:31 AM on August 27


well also its franchisees are paying tax.
posted by JPD at 10:46 AM on August 27


I went to BK last night as my final visit, after not having been there in a while. The "Big King" sandwiches (I got a fish, and a mushroom swiss) were half the size they used to be, and tasted like cardboard. Good riddance.
posted by DesbaratsDays at 12:24 PM on August 27


Good riddance? Those stores are owned by local people in your community and employ local workers. Like somehow eating at Jack in the Box is any better?
posted by GuyZero at 1:07 PM on August 27 [1 favorite]


Do they not?

They will continue, as I understand it, to pay all taxes for sales in the US. The franchise owners will continue to pay tax too.

What the new company will save are the taxes currently owed for sales abroad, which are currently brought back through the US (to pay shareholders and debt and other things presumably). Other countries, including Canada, don't tax income from outside their borders, so this may be a big savings for the new company.
posted by bonehead at 1:09 PM on August 27


Those stores are owned by local people in your community

Not necessarily.

and employ local workers.

Who could work at local restaurants that aren't kicking a percentage out of town.

Like somehow eating at Jack in the Box is any better?

If there's anywhere that those are the only options, that's part of the problem.
posted by Etrigan at 2:42 PM on August 27 [2 favorites]


The Biggest Tax Scam Ever
posted by the man of twists and turns at 5:28 PM on August 27 [2 favorites]


I lived in Canada from birth until my early 20's and my only exposure to Tim Horton's up to that point was the fact that my father was killed in a collision with a Tim Horton's truck in 1969.

These days when I go back to visit my mom in BC, they're all over the damned place. I've still never been inside one.
posted by stavrosthewonderchicken at 6:07 PM on August 27


The US needs a VAT.
posted by klangklangston at 7:37 PM on August 28 [1 favorite]


VATs are pretty regressive.
posted by JPD at 9:10 AM on August 29 [1 favorite]


The giant holes in the Tim Hortons deal.
posted by GuyZero at 11:15 AM on August 29 [2 favorites]


VATs are pretty regressive.

It's possible to compensate for that via mechanisms like the Earned Income Tax Credit etc. It is notable that very high VATs are a very typical feature of economies we tend to regard as much more social democratic than the US.
posted by yoink at 11:17 AM on August 29


Then the correct statement is "The US needs a VAT, and mechanisms to make the VAT less regressive."

I would have also accepted "The US needs to import Finland's political system and policies."
posted by tonycpsu at 11:19 AM on August 29 [3 favorites]


From GuyZero's link to The Star opinion piece:
The actual M.O. of 3G Capital, chief entity of the Brazilian investor group acquiring Tim Hortons, is to buy scads of companies, building revenues by simply buying other people’s successes stories. The 3G windfall machine then reaps profit by rapidly cutting as many jobs and other expenses as possible at its acquired companies, in contrast to the Tim Hortons model of constant reinvestment in a business built to last.

There is a role for 3G’s quick-buck approach, in the case of hopelessly distressed firms that can be profitably lowered into the grave.

But taken to excess, as it has been over the past generation, the widespread practices of vulture investing and creation of near-monopolies by acquiring every major business in an industry have undermined capitalism.

They help account for an unhealthy 21st century capitalism that is undermined by short-sighted emphasis on immediate gain; stifling of cost-intensive innovation; reduction in consumer choice; and destruction of household incomes, with depressed consumer spending and stagnant GDP growth the result.

There’s no “net benefit” to Canada. A merger of Tim Hortons and Burger King would not be of “net benefit” to Canada. Which means that, according to federal law, the proposed combination is illegal and should be blocked.

There is ample recent precedent for that, the Harper government having blocked no fewer than three high-profile attempted foreign takeovers since taking office.
I'm no Harper government cheerleader, but has there ever been a negative consequence to blocking mergers with foreign companies? (Or blocking mergers of large domestic companies like banks?) Seems like it was a good decision every time.
posted by Kevin Street at 1:50 PM on August 29


"VATs are pretty regressive."

They can be; really, any tax without progressive mechanisms is pretty regressive. I tend to favor a VAT tax to replace many corporate taxes because it pegs the amount remitted to the government to the economic performance of the corporation, and because it would eliminate a fair number of tax shenanigans that currently occur because most of our trading partners use VAT and we use sales tax. VAT plus a progressive personal wealth tax would be my ideal, generally, though that's an opinion weakly held (I largely think that implementation matters a thousand times more than underlying form; a VAT could end up just as muddled and ineffective as our current system).

But it's all kind of academic, as it'd take a huge shift to have it implemented in America.
posted by klangklangston at 2:56 PM on August 29 [1 favorite]


but has there ever been a negative consequence to blocking mergers with foreign companies?

Yeah, the entire Canadian mobile phone industry is a shithole. Mostly because of xenophobia. And protectionism for Bell/Rogers/Telus.

Not that really applies to this deal. If Timmie's went bankrupt tomorrow there'd still be coffee and donuts to be had.
posted by GuyZero at 3:40 PM on August 29


I don't think allowing telcos to merge and become even bigger would make the mobile industry better. It would probably make things worse.
posted by Kevin Street at 4:04 PM on August 29


It's about foreign capital being invested into small carriers to create more national-level competition. Basically, letting Verizon or whomever buy Wind and making Wind into a real player through investment. Basically Ottawa prohibits foreign investment (through acquisition or mergers) in the telecom space. It's antiquated. Rogers merged with Fido which was somehow OK (it was bad for consumers) but a foreign company wasn't allowed to buy Fido to create real competition.
posted by GuyZero at 4:57 PM on August 29 [1 favorite]


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