The Great Debate UK
from Nicholas Wapshott:
There is nothing more likely to spark anger than an unfair tax regime. The American Revolution was founded on it. So the discovery that some of the largest and most successful companies in the world -- among them Google, Apple, Amazon and Starbucks -- have legally minimized the tax they pay, sometimes to as low as zero, in many nations in which they earn the lion’s share of their revenue is causing considerable irritation.
The result was evident at the G8 meeting in Northern Ireland, where Britain’s conservative government, chairing the conference of the world’s richest nations, put making corporation tax fairer at the top of its agenda, after the civil war in Syria. David Cameron, who like most conservatives believes in low taxes, is in a bind.
In an attempt to reduce public borrowing he is imposing high personal taxation on the Brits -- lifting “value added” consumption tax to a record 20 percent -- but finds that many of the most profitable companies operating in Britain are dodging taxes altogether. He thinks it is unfair. And so do his voters. He is under intense pressure to deliver a solution or he can expect to be turfed out of Downing Street.
At Davos this year he signaled his intention of doing something about it. “Companies need to wake up and smell the coffee,” he said, “because the customers who buy from them have had enough.” “In a world where some companies navigate their way around legitimate tax systems -- and even low tax rates -- with an army of clever accountants,” he said, “some forms of avoidance have become so aggressive that I think it’s time to call for more responsibility and for governments to act accordingly.”