Friday, 26 July 2013

Pay As You Go: for corporations

I've been reading over the last couple of years about massive global corporations playing the system to avoid paying any tax. Vodafone, for instance, hasn't paid any corporation tax despite making profits of billions. Apple, by dodging between jurisdictions with differing taxation principles, has built up $188 billion in its subsidiaries' offshore bank accounts, untouched. The list goes on and on and on.

Why should they pay tax? Because tax makes their profits possible. Taxes empty their bins. Taxes educate their workforces in schools and universities. Taxes pave the roads on which their products and executives travel. Taxes fund the research which makes innovation profitable. Taxes keep their private jets from hitting other tax avoiders' private jets. Taxes keep the lights on, the water running and the sewage drained. Taxes heal their sick and investigate shoplifting. Taxes pay for the courts they repeatedly run to when they think their copyrights have been infringed. Taxes pay to prosecute the illegal downloaders and taxes protect their patents. Taxes make up the gap between what these companies pay their poorest workers and what they need to live on (the biggest, sickest subsidy of all).

Apple, Google, Tesco, Amazon, Vodafone, the banks and a whole range of organisations need us – but they don't want to pay their share. They are stealing from us, building huge profits not from innovation or efficiency, but from ducking out of the agreement we all make to be part of a civilised society.

It's time to hit back. Cut off the water. Block their sewers. Stop the police from answering the phone when they call. Wipe Vodafone HQ off the ambulance service database. Block off their access roads. Withdraw their executives' passports. Cut off the power. When CEOs fly in, tell Air Traffic Control to close the airspace until a very large sum of money arrives in the state's bank account.

Seal off Canary Wharf and similar enclaves of capitalism, and see what happens without all the things we pay for and they sponge off. Don't let them withdraw from their social duties while continuing to enjoy the privileges of membership of developed societies. If they want to exist in a no-tax, no obligation polity, invite them to move their HQs to Somalia.

And then we start sending in bills. Work out how much each employee cost to educate and add it to local and property taxes that they can't avoid through transfer pricing and Double Irish manoeuvres. Bill them in A+E. Coin-operated courts, police cars and ambulances – or simply refuse to come out. Let the bins pile up outside Vodafone's offices unless they pay cash. If they decide to move their businesses offshore, we tax the imports until we think they've paid back what they owe. Most of them claim to be doing their business elsewhere anyway, like Google's London sales team which 'books' the actual sales in Ireland.

The principle comes from a passage in Lewis Jones's 1937 novel Cwmardy, in which one sell-out miner refuses to join the union. He loads up his truck, down in the blackness, and it starts to slip down the incline. Desperate, he begs them to help before it rolls down over him. Grimly, they refuse: he's refused to share their load and in return they teach him a lesson in collective struggle. Eventually, they relent when he promises to join the union, suitably chastened.

What they did to one class traitor, we can do to any number of free-loading, thieving corporations. Vodafone has started 'rounding up' pay-as-you-go bills to squeeze even more money out of their customers. Fine: let's do the same to them. Pay As You Go services until they give in and cough up.

(This is, of course, pure fantasy. While the government talks big about corporate tax, the truth is that they're actually making it easier to avoid tax. They're cutting corporate tax rates to 20% and George Osborne has made it easier for companies to hide their money offshore. Of course he has: they're his friends. He'd rather they paid a few millions to his party than many millions to the state).

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