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Facebook and Tax


As widely reported, last week Facebook agreed to pay more corporation tax in the UK. After the widely criticised tax arrangement with Google, this has been presented as a positive result but for many it will also been seen as an example of a corporation effectively taking the line that they are “doing you a favour”. This naturally does not sit well with your average tax paying voter.

The truth of the matter is that corporations can very easily shift profits around the globe under any number of pretexts to avoid tax liabilities. The only counter to this would be a worldwide harmonised corporation tax which is completely impossible to comprehend or envisage. When the EU cannot even prevent economically collapsed states such as Ireland maintaining its tax haven status then the limitations are clear.

That may well be more of a reflection of the eternal haplessness of the EU but the key question here is one of fairness and responsibility. The worlds corporations should be aware that their is a simmering resentment towards their behaviour and this is beginning to manifest itself politically. A good example of this is the rise of Bernie Sanders as a contender for the Democrat leadership in the US. In many respects the same could be said for Donald Trump. Beyond the US, we see similar trends in France and even the UK.

Neither presidential candidate would  have stood a chance in times past but there is clearly an wave of anti establishment anger. The corporations and their blithe attitude towards taxation are rightly or wrongly seen as part of a cosy elite which is under increasing attack.

Personally I do not buy into quasi conspiracy theories about “elites”  but the Googles and Starbucks of this world should be careful. When voters are angry when the economy is growing then there is a problem. And when they are looking towards extremists such as Trump and Sanders they should be concerned

The last thing any of these corporations would wish for is protectionism and a sliding economy. Although it is inconceivable at this precise moment it is not impossible to envisage a scenario when a far left or far right protectionist or simply anti capitalist leader does take charge in one or more significant economies.

If the worlds corporations wish to see liberal free market global economies continue to grow and prosper then they need to take a good look at themselves and consider that they have a part to play in ensuring that the most successful economic system of all is represented by fairness and responsibility.



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