Saturday, September 25, 2021
65.6 F
Fort Worth

Buffett called Hatch to gauge inversion policy in Burger King-Horton deal, senator says

🕐 3 min read

Richard Rubin (c) 2014, Bloomberg News.

WASHINGTON — Billionaire investor Warren Buffett called Sen. Orrin Hatch to gauge Congress’s direction on curbing tax inversions, the senator said Thursday.

Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., is helping finance Burger King Worldwide Inc.’s purchase of Tim Hortons Inc. and its move to Canada. That transaction could be affected by legislative and regulatory changes being considered in Washington.

“He called me and he said you’ve got to do something about tax inversions,” said Hatch of Utah, deviating from his prepared remarks Thursday in a speech at the U.S. Chamber of Commerce in Washington. “I think he wanted to know where we were going and he knows I’ll tell him the truth, which I did.”

Lawmakers are deadlocked on curbing tax inversions and appear to be heading toward leaving Washington for the campaign season without acting on the issue. The Treasury Department is studying its administrative options and will make a decision in the “very near future,” Secretary Jack Lew said this week.

Hatch, the top Republican on the Senate Finance Committee, contradicted himself on the date of the Buffett call, at first saying it was last week and then saying it was before the Burger King deal became public on Aug. 26.

“We’re friends,” said Hatch, 80, who is poised to become Finance Committee chairman if Republicans take over the Senate majority. “I think the world of him in many respects. I’ll never understand why he’s a Democrat.”

Buffett, 84, is the third-wealthiest person in the world with a fortune of $67.6 billion as of Wednesday, according to the Bloomberg Billionaires Index. His father, Howard, was a Republican member of Congress.

Buffett, who has been an informal tax policy adviser to President Barack Obama, a Democrat, said in a 2012 Bloomberg documentary that his political views were shaped in part by civil rights issues. He said Democrats were “much more attuned” to that. Buffett didn’t immediately respond to a request for comment sent to an assistant Thursday at Omaha, Nebraska-based Berkshire.

Executives from Miami-based Burger King have said the transaction wasn’t designed to reduce taxes and wouldn’t lower the company’s tax bill significantly.

Charles Munger, Berkshire’s 90-year-old vice chairman, said Wednesday that Berkshire will pay the U.S. government more because of its $3 billion investment in the deal.

“Anyone who thinks this is a great tragedy and a great injustice is stark raving mad,” Munger said regarding the fact that the new company will be based in Canada. “It’s a non- event.”

Because the combined company will have substantial operations in Canada, it probably wouldn’t be affected by a bill that would generally prevent U.S. companies from buying smaller foreign businesses and taking their addresses for tax purposes. The combined company could be hurt by limits proposed by Senator Charles Schumer of New York, who wants to curb inverted companies’ interest deductions.

Berkshire will earn 9 percent annual interest on its $3 billion investment tied to the Burger King deal and has the option to buy a 1.75 percent stake in the combined restaurant company.

Hatch, who sharply countered the administration’s criticism of inverting companies as unpatriotic, has set out what he described as a high bar for his support for any stopgap tax law to stem inversions.

Any bill, he said, must be revenue-neutral, apply only prospectively and move the government toward a tax-code revamp that would mean lighter taxes on U.S. companies’ foreign income.

The current set of Democratic proposals, he said Thursday, don’t meet those tests, which he called non-negotiable.

“I know I’ve set a pretty high bar for any potential approach to dealing with inversions, and that’s not by accident,” Hatch said.

— With assistance from Noah Buhayar in New York.

Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

Related Articles

Our Digital Sponsors

Latest Articles

Not ready to subscribe?

Try a few articles on us.

Enter your email address and we will give you access to three articles a month, to give us a try. You also get an opportunity to receive our newsletter with stories of the day.

Get our email updates

Stay up-to-date with the issues, companies and people that matter most to business in the Fort Worth.

  • Restaurants
  • Technology
  • and more!

FWBP Morning Brief

FWBP 5@5

Weekend Newsletter

  • Banking & Finance
  • Culture
  • Real Estate