Thursday, 15 November 2012

Corporate tax evasion: who is really responsible?

The parliamentary Public Account's Committee have been questioning top executives this week over the paltry sums of tax being paid by giant corporations like Starbucks, Google and Amazon.

Last year Starbucks paid no tax at all on a £398 million turnover, while Amazon, with £3.3 billion in sales, paid just £1.8 million to the UK Treasury.

The evasion is perpetrated by companies registering their operations in more tax-favourable locations like Luxembourg. Starbucks have also been caught out talking down their profits in order to escape paying even their minimal due.

At the hearing, Amazon's director of public policy, Andrew Cecil, was denounced by the committee's chair Margaret Hodge for "pretending ignorance" and by Labour MP Nick Smith for being "ridiculous" and "pathetic" in failing to disclose his company's earnings and tax payments.

In a faltering voice, Cecil fudged and prevaricated, seeking to evade any disclosure of Amazon's overall figures.

In grilling Google's UK head, Matt Brittin, Hodge said "we're not accusing you of being illegal, we're accusing you of being immoral."

But Hodge's strident criticism masked this more vital point:  it's immoral that it's not illegal.

It's all very commendable, one might think, to hear such denunciations. But where is the actual political will to do anything serious about it?

What's the use of Hodge's finger-wagging and this 'dressing-down' exercise when politicians and governments show no actual intention of enacting legislation to curb the power of corporations?

Isn't the political complicity which allows such levels of corporate abuse and rampant greed not in itself immoral? And why, in media discussions of these hearings, have journalists not been making this same, elementary point?

The truth we're never likely to hear in parliamentary buildings or media studios is the more prosaic one that corporations simply don't work on a moral basis. So, trying to shame their executives into giving more tax and sacrificing profits is not only rather pointless, it's a political diversion, indeed, one might say, an immoral evasion in itself.

As the grim effects of neoliberal austerity deepen, the public will, no doubt, approve of this 'corporate roasting'. But the actual means for purging corporations can only be initiated from within the same place that they're being denounced.

With continuous neoliberal governments advancing the sovereign privileges of big business, the chances of any serious parliamentary checks on Amazon and others is as likely as their chief executives showing contrition for their own shameless evasions.

Meanwhile, the action group UK Uncut are stepping up their street protests against the corporate giants.  All welcome exposure. But let's not forget who are primarily responsible for letting them get away with it all. 


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