To The Guardian
I am outraged that Apple is outraged by its tax bill. Apple has hundreds of stores in Europe to sell its products. The message to Apple is very simple: if any of your stores catch fire, don’t bother to call the fire service. If you are burgled, don’t call the police. If you want to deliver your products using public roads, you can’t. If someone falls off a ladder in one of your stores, don’t call the medical services. If you do not want to pay your taxes, fine. But do not expect to use the infrastructure paid for by our taxes.
Neil Holmes, Bromsgrove, Worcestershire
Great letter! Is anyone reading it?
“Brexiters hope that Britain will be attract multi-nationals, like Apple (you mean, they have a plan??) Their excitement is misplaced. For one thing, authorities everywhere are now cracking down on the worst excesses of corporate tax avoidance. Ireland’s own tax regime was toughened up last year thanks to a campaign by the Organisation for Economic Cooperation and Development (OECD) – the UK has signed up to this, too. Trying to become a “tax haven” for big corporations wouldn’t work. The Irish strategy Ireland came at the cost of the “Celtic Tiger bubble. Low-tax pacts are not sustainable, politically or socially. (Fintan O’Toole, Financial Times).
The big corporations are un-mooring themselves from society, anxious to make vast profit, but resistant to the the needs of society, and thus their customers. This cannot last. There must be no race to the bottom of the tax league, no new monied aristocracy that can ignore its fellow citizens. If politicians are too weak or venal to stand up to the Apples of the world they should be replaced. Soon.
British home secretary Amber Rudd was previously director of two asset-management companies based in the Bahamas, something, according to The Guardian, she failed to tell the country. Rightwing media figures, along with the Conservative government and the banks, seem to be keener to shut down legitimate lines of inquiry on tax dodging than they are to shut down tax havens.
Generally, people do not set up companies in the Bahamas to enjoy the subtropical climate. They are more likely drawn there by the fact the islands demand no income, corporate or wealth taxes from individuals investing in offshore companies. No evidence has emerged that Rudd herself or the companies avoided paying tax but at the very least, a fuller statement explaining the purpose of the directorships and whether she personally profited from them seems reasonable.
Is Rudd on the side of the many, whose services have been cut to the bone because of insufficient tax revenues, or is she on the side of the wealthy few who avoid paying taxes?
If she doesn’t make a clear statement opposing tax havens itis difficult to see how Theresa May can continue to have confidence in her as home secretary.
Far from being a sideshow, what some are calling Ruddgate goes to the heart of the question of what type of society we want in the wake of the EU referendum. Will we follow the lead taken by Europe in promoting fair taxation, most notably demonstrated in recent weeks by EU competition commissioner Margrethe Vestager, who ordered Apple to pay €13bn in back taxes? Or will we follow the route being pushed by some hard-Brexit supporters and become one of the globe’s leading tax havens? The answer depends on the actions we take now, and whether we have the courage to demand the highest standards of those who govern our country. (adapted from an article in The Guardian, 24 September)
One of the things I hope the EU will do is tax harmonisation, where every country has to have tax rates at a certain level. Even though we are going to be outside the EU, this could still apply to Britain by making tariff-free access to the single market conditional on embracing tax harmonisation. Now Brexiters would regard this as a violation of state sovereignty. But if you cannot control how much tax your own companies choose to avoid, are you really sovereign in the first place? Like with many other issues, EU member states should pool their sovereignty together and co-operate to achieve shared goals.
In a post-Brexit economy, there isn’t necessarily anything wrong in believing that we should have low business tax rates to encourage businesses to come here, provided overall revenues match expenditure (this would mean that individuals would pay a larger share of the tax burden, and since businesses tend to pass costs on to their customers/clients, it may be more efficient simply to tax individuals directly.) But if the Conservatives are being intentionally soft on tax avoidance, than that is another matter entirely. I also agree with you that a low-tax economy is fundamentally unsustainable in the long term, particularly given the inevitability of ever-increasing healthcare and social security budgets due to our ageing population. Many of the Conservative MPs who voted for Brexit (and some who voted Remain) seem to suffer from the delusion that a balanced budget is possible without raising taxes. It isn’t, unless you’re prepared to decimate services for the elderly (which the Conservatives won’t because the elderly are disproportionately their voters.)