What Google can tell us about our current economic system. My morning read.
Amazon, Starbucks and Google may have been artificially burnt by a recent George Osborne-led war on tax evasion, but aside from a scratch on their brand image, their seasonal sales will undoubtedly go untouched.
The three multinational companies orchestrated very different responses to the tax allegations. Starbucks has made a weak £20 million concession to Whitehall and Amazon offered up a red-faced, nonsensical excuse for a public policy director as bate to a parliamentary committee. But Google has taken a very different approach, which is what every other company was thinking, but didn’t dare to say.
Eric Schmidt, chairman of the search engine giant, defended his company against criticism of its tax affairs saying: “It’s called capitalism.”
“I am very proud of the structure we have set up. We pay lots of taxes; we pay them in the legally prescribed ways,” he told Bloomberg.
And he is absolutely right too. It’s perfectly legal that global companies choose where they put their costs and their profits; morality has no place in a capitalist economy. They are entitled to tip the scale of equality, they are free to make billions and pay pennies and they don’t have any obligation to explain their actions, which begs the question; why do we hate the players but tolerate the game?
Public money in the private pocket
This morning’s CityAM ran a small story on Google’s tax excuses, with an accompanying response from business secretary Vince Cable, which read: “It may well be (capitalism) but it’s certainly not the job of the government to accommodate it.”
I couldn’t help overlook the irony when I turned to the following page and read this headline: “EU states’ debt equals €21,000 for each citizen.” This meant that government debt, accrued primarily by bailing banks out of trouble, now stands at the equivalent of around £16,972 per person, according to research conducted by PricewaterhouseCoopers.
It’s hard to think of a more accommodating notion than; “avoid our taxes, invest as you wish, and if you f**k up, we’ll pay the difference.” What’s more, it shows that public sector (i.e- us) is firmly in the pocket of the private sector, which is content to remain detached until the excrement hits the… air conditioning.
You can tut at the Starbucks and frown at the rest, but in the end of the day they’re not the only ones avoiding tax, and why hate the player when you should hate the game?
By Jack Peat