President Obama’s favorite billionaire has thrown him under the Burger King bus.
Warren Buffett stuck one of his big Midas thumbs in Obama’s eye Tuesday by agreeing to pony-up $3 billion so the hamburger chain can buy a Canadian doughnut outfit — and avoid paying millions in U.S. corporate taxes by moving part of its headquarters to Ontario.
Buffett made the move just a month after Obama denounced “inversion” tactics like this as an “unpatriotic tax loophole” and ordered regulatory changes to curb them.
The White House declined to discuss this flame-broiled whopper of an embarrassment Tuesday.
But when word first leaked out that Burger King Worldwide was buying Tim Hortons, White House spokesman Josh Earnest reiterated exactly what Obama was hoping to do by banning inversions.
“The goal here is to change the law and get Congress to pass legislation that would prevent the ability of American corporations to renounce their citizenship all in pursuit of trying to get out of paying their fair share of U.S. taxes,” he said.
Earnest did not mention Burger King by name.
Team Buffett also did not respond to a call seeking an explanation for why Buffett would risk his relationship with Obama by investing in the Miami-based burger giant’s inversion.
Buffett, the world’s third richest person with an estimated net worth of $66.9 billion, was an Obama ally during the 2008 presidential campaign and a force behind Obama’s “Buffett Rule,” which was designed to increase taxes on rich Americans.
But last month Buffett signaled he was parting ways with Obama on inversions when he defended Pfizer Inc.’s ultimately unsuccessful bid for the London-based AstraZeneca pharmaceutical company.
“I’m not saying they’re doing anything illegal at all in following the rules on inversion,” Buffett told the business news outlet CNBC. “I would personally change that part of the law…but I’m not attacking Pfizer for following the U.S. tax law.”
Tony Fratto, a former White House official in the administration of Obama’s predecessor, George W. Bush, defended Buffett’s investment in Burger King’s inversion.
“Warren Buffett has nothing to be defensive about — this looks like a smart investment that should benefit his shareholders,” Fratto told Bloomberg News.
Burger King Executive Chairman Alex Behring insisted the acquisition, which would create the world’s third-largest fast food company, was “not a tax-driven deal.”
“It is fundamentally about growth and creating value through accelerated expansion,” he said.
Burger King CEO Daniel Schwartz said “we don’t expect our tax rate to change materially.”
Corporate records indicate Burger King’s tax rate last year was 27.5% — or a single percentage point above the 26.5% Canadian rate.
That still means millions of dollars in potential savings for Burger King. And with about 14,000 BK franchises combined with the 4,500 Hortons stores, the company should have plenty of extra dough as it competes for the bleary-eyed breakfast and coffee customers who typically flock to McDonald’s and Starbucks.
Sen. Sherrod Brown, an Ohio Democrat, said it’s still a tax dodge and called on customers to start shunning Burger King restaurants.
“The new Canadian Burger King is a good example of how high tax rates kill business, and, ultimately, American jobs,” chimed in actor Rob Lowe, whose economic expertise apparently comes from playing a White House official on The West Wing.
Out at a Burger King in Ozone Park, Queens, some hard-working, tax-paying New Yorkers said they found the deal distasteful.
“It’s a dirty deal,” said 59-year-old Reggie Rollins, a retired sanitation worker. “Why don’t we all move to Canada and avoid taxes?”
“It’s kind of a slap in the face,” added 24-year-old Ricky Lopez, who works a local Pathmark grocery store.
Across the border, some Canadians weren’t exactly thrilled with the deal either — but for different reasons.
“I don’t like the idea of an American company buying a Canadian company — it’s our brand,” 60-year-old Holly Crosgrey told Bloomberg News at a Tim Hortons in downtown Toronto. “Timmy’s is always trying new things, adapting, they always have good service, and you always get your coffee fast no matter how long the lineup is. Burger King may screw it up.”
With Joseph Matos, Phil Caulfield and News Wire Services
csiemaszko@nydailynews.com