If Burger King has its way, the company will soon leave its Miami headquarters for Canada and enter the coffee-and-donut business. When the fast-food giant announced its intention to buy the Canadian company Tim Hortons in August, it stressed the coffee-and-donuts part of the deal—or, rather, the opportunities for “growth” and “expansion.” But the chance to move to a country with lower corporate tax rates was undoubtedly part of the appeal. Since 2003, more than thirty-five American companies have dodged taxes through similar deals, which are known as “corporate inversions.”
Now the Burger King move is implicated in a fight brewing between some Senate Democrats and President Obama, a clash that throws into relief the split between the party’s Wall Street wing and its progressives. One of the people involved in the deal was Antonio Weiss, a major Democratic fundraiser, the publisher of The Paris Review, and the global head of investment banking at Lazard Ltd, a firm that has put together several major inversion deals. As of November 12, he’s also President Obama’s pick to oversee the domestic financial system—including the implementation of the Dodd-Frank financial-reform act, and consumer protection—at the Treasury.
But a growing number of senators are objecting to Obama’s latest Wall Street nominee. Unsurprisingly, Massachusetts’s Elizabeth Warren is at the front of the insurrection. “Enough is enough,” she proclaimed in the Huffington Post last week. “It’s time for the Obama administration to loosen the hold that Wall Street banks have over economic policy making.”
Warren has a number of problems with Weiss. The first is the fact that his career has been focused on international transactions. “Neither his background nor his professional experience makes him qualified to oversee consumer protection and domestic regulatory functions at the Treasury,” she wrote. The second is that he’s tied up in the corporate-inversion trend, which, as she notes, the Obama administration has criticized and tried to stop. She issued a sharp retort to White House claims that Weiss did not have a hand in the tax portion of the Burger King deal and that he opposes inversions personally:
This was a tax deal, plain and simple. It was designed to reduce Burger King’s tax burden, and Weiss was an important and highly-paid part of the team…Did he work under protest, forced to assist this deal against his will? Did he speak out against tax inversions? Did he call out his company for profiting so handsomely from its tax loophole work? The claim of personal distaste is convenient, but irrelevant.