A taxing suggestion

As I sit here writing this article, sipping my homemade coffee, I realise I have fallen foul to hypocrisy. Just this morning I met a friend in Costa, as opposed to Starbucks, as part of a boycott of this multi-national hot-drink serving establishment for not paying corporation tax in the last three years.

And yet ironically, the mug I am sipping from is emblazoned with the Starbucks logo. I have still bought into the brand and I have still funded their capitalistic monopoly on the coffee-house market.

Thus boycotting isn’t necessarily helpful, as is the issue with Google, which recently published statistics showing it receives 34,000 searches per second. Corporations are unavoidable. They control the economy for a reason.

And so a ferocious public reaction has come in wake of the news that conglomerates such as Google and Starbucks have avoided paying tax by either moving revenues to offshore accounts or basing its HQ in tax favourable locations, resulting in the likes of Starbucks paying less that 1% of their UK profits in tax over the last 14 years.

Not satisfied with earning the bazillions of pounds that they do, they avariciously cling onto every penny, even when not entitled to it.

The issue is that current tax laws legally allow global corporations to siphon away profits to places of lowest taxation (where they may not even base their operations). At a reductionist level, it could be simple enough to just change the taxation laws so that corporations are legally bound to pay and cannot find loopholes in the system.

Policies have to be just and non-elitist and taxation needs to apply to all companies, big and small, without exception or deviation.

For instance, a recent article in The Guardian noted that:

“Amazon avoids UK taxes by reporting European sales through a Luxembourg-based unit. This structure allowed it to pay a rate of less than 12% on foreign profits last year – less than half the average corporate income tax rate in its major markets.”

Policies have to be just and non-elitist and taxation needs to apply to all companies, big and small, without exception or deviation.

It’s not enough to ask consumers to harness their power by boycotting; why should we have to suffer the deficit of a well-brewed Americano (I have some serious beef with Costa: they have twice failed to add milk to my white Americano.) It is government that needs to end its laissez-faire attitude to taxation and properly enforce and regulate the law.

It’s all very well, you might think, for a student with a comfortable lifestyle, surrounded by brands (Blackberry in hand, iPod on table etc.) to comment on the ignorance and evasiveness of these corporate bigwigs, whilst simultaneously using Google to back up my claims. But whilst I’m not in a position to change the laws, I am in a position as a student journalist to write about it. To lambast, condemn and critique. Consumers would be held equally accountable for immoral behaviour if they were complicit in this tax avoidance and didn’t acknowledge that something has to change.

We live in a society where big global brands such as Google, Amazon and Starbucks permeate our day to day existences. It’s unrealistic to believe that a few people not buying their coffee or using high-street shops for Christmas presents is going to affect their behaviour, which up until now has proved successful. Although I was quite cheered to notice that one of my local Starbucks has shut down (whether this is related or not.)

It is realistic however to voice these concerns, to berate corporations and to call for change. It is public reaction after all that has caused Starbucks to bow to outrage and offer an extra £20million in tax. And having done just that I can now get back to sipping my coffee.