From Telegraph blogs:
Starbucks are paying their legal share of tax. Why should they pay more? It's tax, not a charitable donation
By Dan HodgesPoliticsLast updated: December 3rd, 2012
406 CommentsComment on this article
"Give us an arbitrarily defined but 'fair' amount of cash, or the frappuccino gets it"
This morning this paper reports that “Starbucks has become the first multinational to cave in to public anger and political pressure over what MPs called 'outrageous' and 'immoral' tax avoidance”. Well, if that turns out to be true, I’m going to boycott Starbucks.
That will be a genuine sacrifice for me, because the tall decaf caramel latte has become a daily staple. But principles are principles.
I’m sick of the lynch-mob mentality that is afflicting this country at the moment. Whether it's 1970s BBC presenters or journalists or baristas, no one is safe from our lust for moral panic. And that’s what Starbucks are doing. They are indeed caving in. To the mob.
According to Margaret Hodge, head of the Parliamentary Accounts Committee, Starbucks and other “companies with huge operations in the UK generating significant amounts of income are getting away with paying little or no corporation tax here. This is outrageous and an insult to British businesses and individuals who pay their fair share”.
But there’s another phrase that could replace “little or no corporation tax”. It’s “a legal amount of corporation tax”.
To say Starbucks are “getting away” with tax avoidance is like saying I got away with driving 30mph in a 30mph speed limit zone this morning. That’s the law.
It’s all pretty simple. The state sets, by statute, the level of tax we must all pay. We then pay it. If we don’t, we get prosecuted. End of story.
By and large it’s a good system, which has served us well through the years. But today, because of our latest moral panic, people are now advocating we move away from that to what in practice will be a system of voluntary taxation.
Instead of getting a tax bill stipulating an amount of tax they must pay, Starbucks are to receive a bill which says “Please pay HMRC your fair share of tax”. What a “fair share” is no one knows. How Starbucks are meant to calculate what constitutes a “fair share”, no one is telling them. But if they don’t pay this totally arbitrary amount of tax then they will be accused of immorality on a grand scale.
What’s more, under this new system we will no longer have any need for tax inspectors. Instead, tax rates will be determined by the court of public opinion. There will be a “baddy” rate of tax for the likes of Starbucks and Vodafone. And a “goody” rate of tax for companies we like, or companies viewed favourably by members of the Public Accounts Committee.
This is, apparently, how we intend to fund our schools and hospitals and other vital services: by running what is, in effect, a state protection racket. Companies will be told “pay up, or we’re sending UK Uncut and Polly Toynbee round”.
Today it’s big corporations. But how long before the focus shifts to individuals? “What do you mean you're a millionaire and you’re only paying a 45 per cent tax rate? That’s outrageous. Immoral. Give a voluntary donation of 5 per cent of your income to charity or we’ll have you.”
And who is it that actually gets penalised in this scenario? It’s not the biggest practitioners of tax avoidance, but the most high profile. Companies like Starbucks whose retail operations depend on mass customer appeal, and are vulnerable to the reputational damage the lynch-mob can inflict. If you’re big tobacco, or an arms dealer or a dumper of nuclear waste, you’re not going to give a monkey's. What are BAT going to be saying? “We’ve got to do something about our tax strategy or our good name is going to be tarnished?”
It’s time for companies like Starbucks to grow a pair. They face accusations of immorality over their tax affairs. But they’re not acting immorally. They’re acting legally.
What would be immoral is if they allow themselves to be cowed into submission by the populist rabble pounding on their windows. Christmas is coming, and so are the Red Cups. Come on Starbucks, make a stand.
Starbucks are paying their legal share of tax. Why should they pay more? It's tax, not a charitable donation
By Dan HodgesPoliticsLast updated: December 3rd, 2012
406 CommentsComment on this article
"Give us an arbitrarily defined but 'fair' amount of cash, or the frappuccino gets it"
This morning this paper reports that “Starbucks has become the first multinational to cave in to public anger and political pressure over what MPs called 'outrageous' and 'immoral' tax avoidance”. Well, if that turns out to be true, I’m going to boycott Starbucks.
That will be a genuine sacrifice for me, because the tall decaf caramel latte has become a daily staple. But principles are principles.
I’m sick of the lynch-mob mentality that is afflicting this country at the moment. Whether it's 1970s BBC presenters or journalists or baristas, no one is safe from our lust for moral panic. And that’s what Starbucks are doing. They are indeed caving in. To the mob.
According to Margaret Hodge, head of the Parliamentary Accounts Committee, Starbucks and other “companies with huge operations in the UK generating significant amounts of income are getting away with paying little or no corporation tax here. This is outrageous and an insult to British businesses and individuals who pay their fair share”.
But there’s another phrase that could replace “little or no corporation tax”. It’s “a legal amount of corporation tax”.
To say Starbucks are “getting away” with tax avoidance is like saying I got away with driving 30mph in a 30mph speed limit zone this morning. That’s the law.
It’s all pretty simple. The state sets, by statute, the level of tax we must all pay. We then pay it. If we don’t, we get prosecuted. End of story.
By and large it’s a good system, which has served us well through the years. But today, because of our latest moral panic, people are now advocating we move away from that to what in practice will be a system of voluntary taxation.
Instead of getting a tax bill stipulating an amount of tax they must pay, Starbucks are to receive a bill which says “Please pay HMRC your fair share of tax”. What a “fair share” is no one knows. How Starbucks are meant to calculate what constitutes a “fair share”, no one is telling them. But if they don’t pay this totally arbitrary amount of tax then they will be accused of immorality on a grand scale.
What’s more, under this new system we will no longer have any need for tax inspectors. Instead, tax rates will be determined by the court of public opinion. There will be a “baddy” rate of tax for the likes of Starbucks and Vodafone. And a “goody” rate of tax for companies we like, or companies viewed favourably by members of the Public Accounts Committee.
This is, apparently, how we intend to fund our schools and hospitals and other vital services: by running what is, in effect, a state protection racket. Companies will be told “pay up, or we’re sending UK Uncut and Polly Toynbee round”.
Today it’s big corporations. But how long before the focus shifts to individuals? “What do you mean you're a millionaire and you’re only paying a 45 per cent tax rate? That’s outrageous. Immoral. Give a voluntary donation of 5 per cent of your income to charity or we’ll have you.”
And who is it that actually gets penalised in this scenario? It’s not the biggest practitioners of tax avoidance, but the most high profile. Companies like Starbucks whose retail operations depend on mass customer appeal, and are vulnerable to the reputational damage the lynch-mob can inflict. If you’re big tobacco, or an arms dealer or a dumper of nuclear waste, you’re not going to give a monkey's. What are BAT going to be saying? “We’ve got to do something about our tax strategy or our good name is going to be tarnished?”
It’s time for companies like Starbucks to grow a pair. They face accusations of immorality over their tax affairs. But they’re not acting immorally. They’re acting legally.
What would be immoral is if they allow themselves to be cowed into submission by the populist rabble pounding on their windows. Christmas is coming, and so are the Red Cups. Come on Starbucks, make a stand.
