Tax the billionaires!

Submitted by Matthew on 7 September, 2016 - 11:26 Author: Editorial

The EU, after a long investigation, found on 30 August that Apple has evaded $13 billion (£10 billion) in taxes. That’s just Apple. The EU has also ordered Starbucks to pay €30 million to the Netherlands, and is likely to order Amazon to pay €400 million to Luxemburg.

And then there’s Google. And all the other tax-dodging billionaire corporations and their tax-dodging billionaire owners. The worst-off households pay a bigger percentage of income in tax (including VAT and such) than the best-off. In 2011-2, the worst-off 20% were paying 36.6% in tax, the best-of 20% were paying 35.5%, and the average take was 34.6%. The NHS, social services, libraries, and welfare benefits are all being squeezed, with the excuse that taxes don’t bring in enough income.

The PCS, the tax workers’ union, estimates that £25 billion is lost annually in tax avoidance and a further £70 billion in tax evasion by large companies and wealthy individuals. The billionaire corporations and their billionaire owners should be taxed to fund social provision. Even better — since they’ll always eventually find ways to get round the best tax rules — transnational giants like Apple should be taken into public ownership. Best would be a form of multinational public ownership, for example ownership by the EU of all Apple operations in Europe.

At present there’s a more basic problem. The governments don’t even want to tax the billionaire corporations heavily. The Tories talk of reducing corporate tax rates at the same time as they continue cuts. The Irish government, offered a tax payment that could revolutionise its rickety finances, has said no thanks. It has vowed to appeal against the EU ruling that Apple should pay it maybe $19 billion (£14 billion) in back taxes plus interest, the equivalent of the country’s whole public health budget. That shows the priorities which all capitalist states, and especially the smaller ones, have adopted in the era of neoliberalism. Where capitalist states used to be concerned to build integrated national industrial complexes, today their priority is to make their territory the most congenial for free-flowing global capital to perch in.

The EU found that Apple had been booking all its European revenues in Ireland, and then dividing its profits into two streams. One stream was credited to Apple Ireland, and taxed at Ireland’s low rate of 12.5%. The other stream was credited to an “Apple head office” which the Irish authorities defined as a “stateless company” and therefore not taxable. The arrangement has been going since 1991, but the EU could decide only on the last ten years; for those years, the EU says Apple should pay the Irish government $13 billion in back taxes, possibly $19 billion including interest. It’s a huge amount, but very affordable for Apple.

Apple has financial reserves of $215 billion, stashed out of reach of tax people. It made profits of $53 billion in 2015. It plans to spend $47 billion in the next few years on “buy-backs”, i.e. on enabling shareholders to cash in their shares. In the meantime, parcellisation of capitalist states helps the multinationals. The more the capitalist world is divided into smaller states, many of them small even compared with individual multinationals, the more they are driven to compete with each to capture shares of the world’s huge flows of finance and investment.

The EU had the courage to deliver the tax bill, and the US has one of the highest corporate tax rates in the world, not because they are left-wing but because they are bigger. One of the reasons for fighting to minimise Brexit is that a cordoned-off British capitalist state will serve transnational capital even more slavishly than the current regime.

Let's talk about socialism

“Socialism, a word not used much in the last 15 years,” so said shadow chancellor John McDonnell at an Ealing, West London for Corbyn rally on 31 August.

McDonnell went on to say that the election of Jeremy Corbyn would represent something different from what has gone before. We would get a leader that would break the mould from those, “who have never implemented socialism.”

Whilst we wouldn’t agree entirely with McDonnell’s definition of socialism and how we can defeat the capitalist world, the election of Jeremy Corbyn and the current leadership campaign have put the ideas and discussion of socialism straight back on the agenda.

Workers’ Liberty believe now more than ever we must Stand Up For Socialism and organise to change the world. A strong and vibrant working class and labour movement is the force that can turn the tide against the last 30 years of defeat. We want to start discussions with student and worker activists about our book Can Socialism Make Sense and alongside our speaker tour with US writer Peter Frase, author of Four Futures: Life After Capitalism. Get in touch and come to our meetings! Let’s start the debates and discussions we need to comprehensively transform society.

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