Boycott Starbucks! Google! Amazon!

[tobyaw]

The chair of the Public Accounts Committee has urged the British public to boycott a handful of large multinational companies that pay little or no corporation tax in Britain, despite being market leaders in their respective areas, and being profitable businesses in their home jurisdictions.

Starbucks has hundreds of coffee shops across the UK. I seldom go into one, and if I do, it is because somebody else has chosen it as a meeting place. I don’t like their tea (I might have mentioned that in a previous post), and find them to be overpriced. It is hard to boycott a business that doesn’t currently have any of my custom.

Google may not have a significant physical presence in the UK, but it has a sizeable chunk of website usage. The great majority of its users aren’t its customers (I might have mentioned that in a previous post); it’s income comes from advertisers. I suppose one could boycott Google by avoiding clicking on the ads it displays, but I never click on ads anyway. Better still, one could use its competitors. Nokia or Apple for maps! Vimeo for video! Bing for search! There are lots of alternatives to Google, and it would be relatively easy to avoid if one chose to do so.

Amazon, on the other hand, I would find harder to avoid. While I’ve pretty much given up buying physical media (books and Blurays), Amazon are still my go-to site for basic purchases. With an Amazon Prime subscription, their free next-day delivery makes them compelling for anything from a replacement battery to De Cecco pasta (two of the recent things I’ve ordered from Amazon). A lot of the other web services I use take advantage of Amazon’s web services — it would be hard to wholly avoid them. And I’m not sure that I’d want to. Amazon’s prices are low because they keep margins low; they can offer a decent service at a competitive price because they minimise all of their costs, and one of those costs is the tax that they pay.

There is no suggestion that any of these companies has broken the law with their tax arrangements, but some of them have certainly creatively used the differences between different countries’ tax regimes to their advantage. MPs have suggested that this is a moral failing. I don’t think that anyone or any company should feel a moral duty to pay any more tax than they are obliged to by law. And to turn that around, I would suggest that it is every taxpayers’s responsibility to take advantage of whatever legal avenues are provided to reduce the tax that they pay. After all, paying less tax keeps more money in the economy.

But if you do choose to boycott any of the above, good luck to you. And I’d like to hear how successfully you manage to avoid their products.

(P.S. Boycott Starbucks! Their tea is overpriced and uninspiring, and I can’t fathom why anyone would choose to go to a chain coffee shop when there are independents on every street corner.)

Comments

[andrewducker]

Yup - I'm in favour of the government closing loopholes, but companies shouldn't be avoiding perfectly legitimate tax-avoidance using methods the government has specifically created.

[makyo.livejournal.com]

I doubt we'll ever agree on this, but I'll post the following response in the interests of a polite exchange of views, and then probably step back, because these things have the potential to get quite heated if we're not careful.

And to turn that around, I would suggest that it is every taxpayers’s responsibility to take advantage of whatever legal avenues are provided to reduce the tax that they pay.
Part of the problem, I think, is that large corporations and extremely rich people have considerably more opportunities for minimising the amount of tax they pay than the rest of us do, both legal and otherwise.

I, being an ordinary person paying income tax and national insurance at source on my earnings, have essentially no choice in the matter - I have to pay it. There are, of course, some mechanisms for slightly lowering my tax bill: I can invest a limited amount of money in an ISA and avoid tax on the interest I earn, for example. I can also declare my London Mathematical Society (http://www.lms.ac.uk/) membership fees as an allowable deduction - this probably saves me about a tenner a year (and in return it helps me do my job better).

If I were a multinational corporation or a billionaire, however, I'd have so many more opportunities for minimising my tax bill. I'd certainly be able to end up paying a smaller proportion of my income as tax, and probably even a smaller tax bill in total than an ordinary person. Is this fair? I can't register myself as a pigeonhole in Luxembourg to almost wipe out my tax bill, but Vodafone can. And on top of that, they can also have a rather nice lunch with the head of HMRC and come to some sort of cosy and mutually beneficial arrangement.

After all, paying less tax keeps more money in the economy.
I'm unconvinced that this is correct, but could probably be persuaded by a more detailed economic argument.

MPs have suggested that this is a moral failing.
And it is - a shared moral failing on the part of the companies themselves and the people who write the tax legislation. Every pound of tax those companies avoid is a pound that can't be spent on schools, hospitals, scientific research, public services, and a whole host of other things that ordinary people rely upon (directly or indirectly) every day. You can argue that the world of business should be kept in a pure, rarefied environment, divorced and protected from questions of morals, that it's a dispassionate economic machine that should be allowed to function without interference. You can throw your hands up in a gesture of abdication at the difficulty of enforcing local tax rates in a global economy, and I certainly wouldn't blame you if you did, because it's a highly intractable problem.

But none of that changes the fact that real people rely, for their education, prosperity and health, on the things that are being underfunded or cut partly because of the clever tax-minimisation schemes of the likes of Vodafone, Amazon, Google, Starbucks and the rest.

I don't entirely blame these companies for taking advantage of these loopholes - they have a duty to their shareholders to maximise their profits, after all. I am, however, exasperated at the continuing failure of our politicians (and their opposite numbers in other countries) to even attempt to do anything about it.

[loupblanc.livejournal.com]

I've always refused to go to Starbucks anyway for several reasons but the fact their tea is absolutely rubbish is one of the major ones. Plus why would you go to Starbucks when you can go to Chocolate soup or somewhere nicer like that?

As for the other two, I'm afraid not...

[lewis-p-bear.livejournal.com]

Don't drink tea so have no concerns in that department.
As to "independent" coffee shops.
Well!
In the dark days before Starbucks those of us on the road were doomed to drink a fluid, sold as coffee, which was made by putting a spoonful of aged, catering freeze-dried crud in a cup adding milk and then heated on the frothing jet of the espresso machine.
It was not cheap. OK less than Costa but not cheap and the surroundings were only conducive to moving on.
Bottom line.
Give the punters what they want and they will pay for it and come back.
In their day the Department stores were the enemy of the Little Man.
Tesco et al have their moment but already they can see which way the wind blows.
The public are fickle and nothing is ever as good as it was.