Sunday 27 January 2013

I have sympathy with Amazon, Google and Starbucks

Well, only to a point, of course. These companies - along with many others - have organised their affairs, come to agreements, planned their finances to pay very little tax in the UK (and other countries too. They just don't pay tax). They do this, of course, to maximise profits, and provide the highest possible earnings for the shareholders and directors. The people who make most of the decisions are also the ones who benefit from this and, like most people, they look to their own benefit. In this, I have no sympathy with them.

However I do find some sympathy with the idea of withholding tax from a government who seems to be behaving in the same way - managing the country's economics to the benefit of themselves and their friends. Those who argue for a boycott of Amazon because of their tax avoidance policies should also consider whether they should withhold taxes from the government who are refusing to support the NHS, those on benefits, those who are the poorest and most oppressed in our society. The principle is, surely, just the same. If you argue for boycotting one company, one organisation, because they are acting irresponsibly with their money, then surely it should also apply to others. If we object to Amazon, Google, Starbucks not taking their civil duties seriously, not fulfilling their duties where they conduct their business, then surely the government should also not be paid.

At the same time, there is news this week that J K Rowling has dropped out of the Forbes Billionaires list because she has given so much of her money away to charitable purposes. I mention her, because she is famously happy to pay her taxes. She is a person who seems to represent the true spirit of the rich, quite prepared to pay her civil duties, but also generous with her money. She stands out because she is pretty much unique in doing this.

I am not, I should point out, suggesting a mass non-payment of tax. I think there is another broader issue here. We cannot ignore the fact that many organisations are not cross-national (and many people too), and it is no longer appropriate to consider how to tax them in one country. We need to find ways of appropriately taxing trans-national entities, that provides appropriate commitment from companies, wherever they are based, and provides suitable contributions to the countries in which they operate. It is time to end the tax havens, where individuals and organisations can operate from purely for the purposes of avoiding paying tax.

It means that companies like Starbucks should have to pay whatever percent of their profits globally, irrespective of where they are based and where they operate. It means that this money should then be fed back to the countries in which they operate based on their taking in those countries.

It means that individuals should pay reasonable rates of tax on their earnings, and this should be paid back to the countries where they spend their time.

It is time that we accepted the impact of an increasingly small world, where sovereign states are no longer as significant as they were. Or rather, they are not the largest or most significant entity. A bigger picture needs to be taken. It is time to make the tax-avoiding tactics of those who can afford it a thing of the past.

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