Silicon Valley Owes Us $100 Billion in Taxes (At Least)
Credit to Author: Edward Ongweso Jr| Date: Tue, 03 Dec 2019 18:59:51 +0000
Just six of Silicon Valley's largest corporations skipped out on more than $100 billion in taxes this decade, according to a new report by Fair Tax Mark, a UK tax transparency organization.
Over the period of 2010 to 2019, Fair Tax Mark analyzed the global tax conduct of Facebook, Apple, Amazon, Netflix, Alphabet, and Microsoft (which it calls “the Silicon Six”) as the tech firms funneled revenues and profits through tax havens, shell companies, and nations with low tax rates.
The $100 billion in taxes is a global estimate made by the organization.
Unsurprisingly, Amazon was the worst tax dodger (its founder, Jeff Bezos, is the richest person alive). Over the decade, Amazon revenues hit $960 billion and its net profits $26.8 billion, but its income tax bill was only $3.4 billion. Amazon’s “headline tax rate” or the rate it was supposed to pay was 35 percent, but Fair Tax Mark's report pegged the effective tax rate as 12.7 percent. All of this is made even richer by the fact that just a few months ago, Amazon was levying its own tax on French businesses after getting hit with a new tax.
Fair Tax Mark’s report warns that Amazon is "growing its market domination across the globe on the back of revenues that are largely untaxed," giving it the power to undercut competitors and encourage more widespread tax avoidance. Amazon’s ill-gotten means have created a seemingly unstoppable machine that not only dodges taxes but turns around and demands the government spend money on it in the form of public incentives or social programs for its poorly paid workers.
Following close behind was Facebook, with a 10.2 percent effective tax rate—the lowest among the companies studied. Overseas, its foreign tax rates were even lower at just 5 percent of foreign profits. Third was Google (now a subsidiary of Alphabet), with an effective tax rate of 15.8 percent and a foreign tax rate of 7.1 percent. Netflix was harder to calculate and rank, but it came in fourth with an effective tax rate of 15.8 percent.
Apple has pitched itself as “the world's largest taxpayer”—but that’s not saying much given how universal tax avoidance is among corporations, but especially the Silicon Six. On revenue exceeding $1.8 trillion and profits of $548.7 billion, Apple paid $93.8 billion or 17.1 percent. Its foreign rate was even lower, $3.9 billion on $44.3 billion of foreign profits, or 8.9 percent.
Microsoft came in dead last with the "least aggressive approach" of the Six, but again that is not saying much. On revenue of $882.5 billion and profits of $278.5 billion, Microsoft paid $46.9 billion or 16.8 percent.
Looking over these numbers, it’s hard to understand why tax rates on these companies and their billionaire founders and investors shouldn’t be higher. All we have to show for this aggressive tax avoidance is a political system dominated by billionaires and whitewashed by their pathetic gestures of charity to solve social and political problems they created or exacerbated in pursuit of ungodly fortunes.
Nearly $15 trillion are being held in shell companies, shielded from taxes. Imagine what sort of world we could have if the Silicon Six were not simply deadbeat tax dodgers—provided it wasn’t spent on immoral and illegal wars like the $6.4 trillion already used that way. Now think about the cities we have or the world we will likely have because of a single-minded pursuit of profit and ask if the absurdly low tax rates are worth it.
This article originally appeared on VICE US.