Transcript for Did Burger King Defect to Canada to Save Tax Money
Tonight an American original is under fire, burger inning can, home of the whopper, accused of doing something a lot of Americans question, defecting heading north of the border to Canada and saving a lot of tax money. What's the worth of what they're doing. ABC's chief business correspondent Rebecca Jarvis tracked down the CEO with the questions tonight. Reporter: Burger king, a company founded in 1957 in Miami will now combine with Canadian donut giant Tim Horton's, becoming the world's third largest fast food company with more than 18,000 restaurants worldwide. Why is burger king doing this? Sales have been about flat over the last couple years and Tim Horton's is the biggest coffee player in Canada. Reporter: But they'll also pay lower taxes, a point we pressed today with bk's 34 year-old CEO. How much over the next ten years does burger king expect to save on its taxes? Tax wasn't really the driver from this deal. Reporter: Burger king makes about $1 billion a year in sales. Analysts say by moving to Canada it could save as much as $50 million on taxes. The U.S. Has the highest corporate tax rate in the world, 39%. Canada's? Just 28%. Burger king like many companies pays below the U.S. Rate, but moving to Canada it gets an even better deal. The term tax inversion has come up a lot. Basically a company in the U.S. Shifting their tax base overseas. Reporter: Americans outraged online. The president earlier this summer criticized companies for relocating. My attitude is I don't care if it's legal. It's wrong. Reporter: Fearing backlash, Walgreens recently walked away from a similar deal to move overseas. But helping finance this deal, billionaire investor and friend of the white house, Warren Buffett, who famously complained that billionaires shouldn't pay lower taxes than average Americans. But this is not just about burger king. We've seen a sizable increase in U.S. Companies relocating to foreign addresses to save on their taxes, and it comes at a price. It could cost the U.S. As much as $19 billion, Diane, over ten years if this continues to happen. And it's firing up the social media tonight. Thanks so much, Rebecca.
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