The Burger King Controversy: A Call for Regicide

Burger King’s announced purchase of Canadian fast food chain Tim Hortons, and its plans to relocate its headquarters to Canada to take advantage of the lower corporate income tax rate, were followed by predictable liberal cries of outrage over BK’s lack of “patriotism.” It’s “unpatriotic,” critics say, for the company to take advantage of taxpayer-funded benefits in the US and then bail out to avoid paying taxes to fund those benefits.

What did they expect? There’s no such thing as a “patriotic” corporation. Governments are extractive tools of, by and for corporations. Providing taxpayer-funded benefits to privileged economic actors who don’t pay for them is what government is for. The central trend of corporate capitalism over the past 150 years had been the socialization of operating costs and risks and the privatization of profit. And as much as some liberals like to talk about “patriotic billionaires” like Warren Buffett, billionaires are only “patriotic” — i.e. maintain the appearance of loyalty to a government — when it suits their interest. Buffett’s economic ventures, as much as other corporate endeavors, depend entirely on government subsidies to his operating costs and on gouging consumers with government-enforced monopolies that together far outweigh whatever he pays, or advocates paying, in taxes.

Further, the corporate income tax — despite a name that suggests sticking it to corporations — really isn’t very “progressive.” I hate corporations as much as anyone, and probably a lot more than most. But the main function of the corporate income tax is to increase the concentration of power, not reduce it. Targeted tax deductions and tax credits, both refundable and not, mean that many large corporations engaged in favored activities (like capital-intensive, high tech, export-oriented production, and large-scale mergers and acquisitions) pay little or no tax at all. As a result of the longtime struggle between the Yankee and Cowboy factions of American capital, the latter (including low-wage, labor-intensive service industries like fast food) bear the brunt of the corporate income tax and are the most vocal advocates for lowering it. On top of that, Yankee industries tend to be oligopolies in which the large firms can collude to pass on tax costs to consumers through administered pricing, whereas Cowboy industries are more likely to eat the cost themselves.

If we want to attack Burger King on the basis of privilege, going to Canada to escape taxes is pretty minor compared to things like their use of trademark law, franchise fees and all the supplier lock-ins that come with a franchise to put local franchise owners in a position where labor is literally the only thing available to cut. The way the corporation treats franchises is a lot like the way Walmart treats its vendors.

As Tom Knapp (our Media Director at C4SS) said, beneficiaries of state privilege will, like anyone else, shop for the best deal for their privilege. One side effect of globalization is that it’s easier to do that kind of shopping — just park your headquarters in the place with the best tax rate knowing that you still get your “intellectual property” claims, etc. enforced by other states pursuant to “trade deals.”

The way to fight Burger King is to outdo it in terms of agility. If BK’s headquarters can jump national borders, so can labor solidarity movements. Wobbly locals can take direct action in Burger King restaurants in Canada as well as the US. And at the local level, we can build counter-institutions, like low-overhead, home-based micro-restaurants and guerrilla delivery of home-produced food, to combat entry barriers like zoning and licensing that give established restaurants an artificial advantage. In so doing, we give ordinary people an opportunity to turn their labor directly into subsistence income outside the wage system and reduce dependence on fast food’s lousy pay and working conditions.

The root is privilege itself — not the economic actors who take the fullest advantage of it.

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