Originally published on LinkedIn
‘We live and work for the dividends of the wealthy’, a strong statement made by [anonymous], after a long discussion about equality in today’s world. To some this might seem a disgruntled person working for a listed company, unhappy with her/his financial circumstances. Yet what if I told you this person’s income is £150k, that s/he owns a stake in this very company and is extremely happy with life at the time of making this statement. Sometimes one simple sentence/piece of information can change the course of how a story enters, and is stored in, our brains. Being able to view information in an unbiased manner is difficult, some will say it is impossible. I believe, and am sure some of you will agree, that we are all products of our environments and that even the most open-minded individuals will have tendencies to cling on to their biases.
To some this paragraph and the statement following it will seem disjointed, to others cohesive. I aim to leave the above as potential fuel for open discussions regarding all pressing social issues. I think ‘Equality’ in the broader sense should always be a topic in which regard an individual is willing to re-evaluate their biases for. That said, I find an open and peaceful discussion with unlike-minded people to always be of use when ‘breaking’ my own biases. As you might now have formed an opinion about some of my stances in life (constantly subjected to re-evaluation) or are lost as to what I stand for due to agreeing that this story seems to be disjointed, I would like to get to the real topic of this story; tax.
‘What? Tax?’, yes, Tax. I am no tax expert, personal knowledge, opinions and biases aside, but what makes an expert? OK, no philosophy, back to tax; according to Google’s search, tax is defined as “a compulsory contribution to state revenue, levied by the government on workers’ income and business profits or added to the cost of some goods, services, and transactions”. I think most people will agree with this, perhaps some would word it slightly differently or find it to be incomplete. Its pure definition is most likely where the consensus regarding tax ends, however. This article will not discuss any existing systems and/or regulations, albeit that some countries will definitely benefit from completely re-inventing their heavily outdated core tax systems, as it would make for a simply boring discussion of a topic that I rather see peacefully debated by the appropriate unlike-minded individuals.
Google’s UK tax bill (paying an additional £130m for 2005–15) is the latest addition to a long list of multinational tax affairs that have been the center of political and public debate. I do not agree nor disagree with any points made in these discussions as such. I do believe, however, that the bill paid at the end of any ‘relatively fair’ negotiation should not be up for re-negotiation, being that the negotiation currently under scrutiny already was a re-negotiation. Unless both parties agree a mistake has been made or such a mistake has been identified by a third party, which is thereafter evaluated. In this case, as the second definition for tax given by Google is ‘a strain or heavy demand’ and rules, which are a mixture of national laws and bilateral trade agreements, concerning taxes that can be levied on such activities seem to remain ambiguous, or simply full of loopholes. I think no such renegotiation will take place for this particular amount. I do hope, therefore, that the aim of the current public discussion will become future taxation in such circumstances and not the unfairness of the taxation of past activities.
The fact that the amount should have been a lot higher seems to gain a lot of consensus, yet seems to be too much of the focal point in the public discussion. Bearing in mind the above ‘no-renegotiation’ and moving past done deals will perhaps provide all of us with the necessary focus on what comes next. I mean to add this to the discussion taking place in the public domain, as I presume these future taxation rules are being intensively debated and drafted by the relevant authorities in the UK, therewith knowing that a lot is ongoing in this regard in the EU’s political hemisphere.
Social debates, government spending/debt, tax systems, crises and all other economy topics aside; contributing to improving the society as a whole requires concessions from all of us. Some will not like paying taxes at all, some may find that they are paying too much, etc. etc.; yet I ask of you to see beyond your ‘own backyard’ including all that you stand for in regard of this topic. Say you work for Google, how much fun that might be with free lunch, napping booths and the likes, would you not want for this great company you work for to contribute to a better living environment for you outside of the workplace? For that contribution to have a knock-on affect on so many issues that you might not even know could affect your personal life and if these were not taken care of? Should not the amount of tax this company pays be a fair amount in the future? Perhaps ‘paying a fair amount of tax’ should even be included in the company’s global CSR policy, because is it not just that; a company’s social responsibility. Temporarily, at least, until it is commonly accepted and when countries seem to have found ways to tax these multinationals in a fair manner.
I am aware that such companies provide for a lot of employment, yet I hope this did not take precedence over other matters in the negotiations that Mr Osborne had with Google (Alphabet) . Speculations aside, as the above actually should not be a leverage tool, the future amounts paid by the likes of Facebook, Alphabet and any other large (technology) multinational will have to be more fair and I hope these companies’ leaders, and the army of lawyers and accountants involved, will be more willing to make clear concessions in the tax arena. I also believe the consultation of these companies could be sought after by governments in order to draft new tax rules concerning these relatively complex business models.
We all, as individuals, make these concessions mentioned earlier and however unwilling some may be to do so, we should want for the companies we love (or hate) and/or work for to do the same. I believe it is the people working for these companies, and/or any other entity for that matter, that could drive this change concerning its fair contributions to societies around the world. A fair statement, with all due respect, to leaders like Mr Zuckerberg, Mr Gates, etc. will then be; we need less philanthropy and more fair ‘corporate societal contributions’.
I would like to end this post with stating that I am by no means all-knowing on the topics I write about and would love for you to leave your comments (including any feedback) and/or questions. I would further like to mention that this post is not ‘complete coverage’, as certain pieces of information my brain might have found irrelevant were the pieces that could form your concurrence or disagreement (please do let me know if that is the case).