The Robots- one further reason for apple, google and co to pay their dues
As professionals, workers, parents and citizens, we all have strong reasons for wishing for fair collection and allocation of taxes. Our schools, NHS and public services of all kinds depend on it. So here is a heartfelt plea for companies, and particularly the multi-nationals who sometimes appear to be above the law, to play fair and to do their bit
In an earlier article ‘the Robots are coming… ‘ (https://www.linkedin.com/pulse/robots-coming-what-...) I used ‘Robots’ as a generic term to apply to the convergence of technologies Mobile, AI, Robotics and particularly the web which are having a cumulative effect on our society and particularly the employment markets. This is likely to be nothing short of a perfect storm AND as we are so often reminded, the pace of change today is likely to be the slowest we will see in our lifetimes.
Clearly there are lots of reasons why companies such as Apple, Facebook and Google should pay their fair share of taxes and these arguments usually centre on the social contract and the need for fairness. The case is writ large by an increasingly obvious white elephant in the room; these companies which lie at the heart of the digital and technological revolution are also the companies whose products and activities will decimate the employment markets and make whole categories of work redundant.
Furthermore, the Internet players in particular employ a fraction of the number of people which more traditional businesses with comparable turnover employ, and are therefore challenging employment markets directly too. The gig economy and other market iterations will help in some ways but will not be able to plug this gap in and of themselves.
Whilst it is not possible or desirable to slow the pace of change, it is surely possible for these companies to pay their way. The statistics are out there for everyone to see now and as the Observer pointed out ;
‘For too long global corporations have been able to use elaborate avoidance mechanisms to avoid their fair share of corporation tax..they fail basic tests of economic and social justice’
Apple, which the European Commission revealed paid an effective corporation tax rate of just 0.005% employed the ‘most aggressive’ tax avoidance regime and no doubt employs many internal and external advisers to ensure that this continues. Recent initiatives of HMRC to address the supply side of these regimes is an entirely good and innovative development. They will need to do more and to co-operate more effectively with their international peers.
The counter argument of course is that these companies are simply doing what all good companies do to maximise revenue and profits and are operating within domestic and international law. They owe it to their shareholders, employees and to society as a whole to thrive.
Of course this is true and it is the law which needs to be tightened up, which is why the European commission ruling on Apple is so significant (well done Margrethe Vestager). According to Moody’s US companies (excluding banks) held $1.2 trillion in cash overseas at the end of last year. Just over half of that sum ($630bn) is estimated to be held by Apple and other tech companies which have thus far resisted repatriating their profits back to the US, where corporation tax is higher.
No tax regime is ever going to be perfect and companies are of course driven by profit. It’s what makes the world go round. However if the prognosis for the global economy and the employment markets in particular is anything close to the intelligent predictions then government and business are going to have to do more to collect and pay fair taxes respectively. They will also need to work more closely together to develop a digital age strategy to deal with the enormous economic and social problems which will arise if we see increased unemployment and inequality.
This will need to be adequately funded and resourced and a big part of that will need to come for the global corporations which are sitting on enormous cash reserves. Perhaps, like Bill Gates, these companies could invest some of their reserves in constructive and philanthropic initiatives. These could include retraining and education programmes aimed at addressing the shortfalls in skills in certain areas, such as digital.
What seems to be lacking at the moment is a sense of leadership and vision as state and business grapple with increasingly complex global and domestic issues. Innovative businesses such as the tech companies are well placed to provide leadership because like their forebears, the .com enterprises they are stacked full of entrepreneurs and creative people who like to solve problems. If the original spirit of the pioneers or ‘fireflies’ of the digital revolution is to be kept alive then some of these energies need to be applied to the greater good, not only for profit.
So come on Apple, Google, Facebook and all of the other multinational players. We love your products and much of what you do but please pay your fair share of taxes, not just because you have to. There will always be ways around that. Pay your taxes because we and the rest of the world need you to do so and this need will become every bit greater as your business models continue to dominate. We need you to be less like the Roman Empire and more like a better version of responsible capitalism.
If you are interested in understanding more about ‘The Rise of the Robots’ from a technology and employment perspective, I recommend the book which carries this title written by Martin Ford. Ford concludes by saying;
‘Negotiating a path through these entangled forces and crafting a future that offers broad-based security and prosperity may prove to be the greatest challenge of our time’
David Head is a Coach and Mentor with the award winning firm Accelerating Experience email@example.com