Skip to main content
Advertising

Originally published August 26, 2014 at 8:02 PM | Page modified August 27, 2014 at 1:34 PM

  • Share:
           
  • Comments
  • Print

Europe calls out corporate tax schemes our politicians won’t

At least somebody is questioning the tax-avoidance schemes of our tech companies.


Seattle Times staff columnist

advertising

You’ll have to forgive Amazon for getting a little flustered when the British Parliament publicly blasted the company for “gaming the system” to dodge paying taxes.

Amazon is an American company. They’re used to far more deferential treatment.

Responding to how the company paid only $7 million in taxes despite selling $7 billion in goods in England, a furious British committee chairwoman told one of Amazon’s executives: “I don’t know what you take us for.”

They took you for the kind of easy marks they have back home?

Amazon didn’t say that, of course. But what they are accused of in Europe — setting up an office in a tax haven to lower their entire tax burden — is pretty much standard operating procedure for big corporations here in the U.S. And not only do our politicians rarely question it, in Congress they seem to spend most of their time holding hearings on how to cut corporate taxes even more.

The past five-year period has been the easiest on U.S. corporations tax-wise since the 1920s. Between 2009 and 2013, just 8.5 percent of all federal revenue was collected from corporate income taxes. By contrast, in the 1950s corporate taxes made up nearly 30 percent.

Yet scarcely a day passes without a new story of a U.S. company trying to decamp the U.S., or set up some other scheme, in order to pay even less here.

What was so interesting about the series this newspaper just ran on Amazon’s experiences in Europe isn’t what the company is doing over there. They are as anti-tax and anti-union as they are here. So give them points for consistency.

What’s interesting is the pushback in Europe. Even high officials in the government are recoiling. Britain’s conservative prime minister, David Cameron, was quoted as decrying such “tax dodging” by companies like Amazon, saying, “The public who buy from them have had enough.”

Jeff Reifman, an ex-Microsoft multimillionaire who has been a sort of one-man town crier about Microsoft’s tax-avoidance schemes over the past decade, said companies here are almost never subjected to anywhere near that level of official questioning.

Example: Two years ago a U.S. Senate committee revealed how Microsoft uses subsidiaries in Puerto Rico and Bermuda to shift up to half its revenues offshore, thus allowing it to skirt $6.5 billion in taxes — more than $4 million per day from the Puerto Rican operation alone.

A group of more than a hundred small-business owners from Washington state then wrote to Microsoft and implored it to “do the right, fair and moral thing” — pay its fair share of taxes. The letter was ignored. Other than that, the revelation caused nothing at all to happen. A bill to address offshore tax havens attracted just four co-sponsors — notably none from Microsoft’s home state.

“The corporations have won on these issues, and they know it,” Reifman says. “They just laugh at this stuff. They know there’s not going to be any price to pay. Not in the U.S. anyway.”

Asking them to be patriotic or shaming them seems like a fool’s errand, though. What they’re doing is legal. So it’s up to the government to take charge and change it.

I say this to Reifman, who, like a corporation, laughs at me!

“This isn’t a functioning democracy anymore,” he said. “It’s a corporatocracy. There isn’t going to be some ‘Mr. Smith Goes to Washington’ moment that changes any of this.”

No, probably not. You don’t get your share of the national tax burden cut by two-thirds in 50 years by happy accident. Plus, corporations now have the ability to pump unlimited amounts of money into the election system.

I know that writing “Hey, let’s be more like the Europeans” probably makes it even less likely that people in power will question the tax tactics of Amazon, Microsoft or any of our swashbuckling tech companies. But I’m glad somebody is.

Danny Westneat’s column appears Wednesday and Sunday. Reach him at 206-464-2086 or dwestneat@seattletimes.com



Want unlimited access to seattletimes.com? Subscribe now!

Also in Local News

News where, when and how you want it

Email Icon

Get ready for 2015

Get ready for 2015

The Seattle Times 12-month wall calendar features hand-picked photos of life in the Pacific Northwest. Order while supplies last!

Advertising

About Danny Westneat

Danny Westneat takes an opinionated look at the Puget Sound region's news, people and politics. Send tips or comments to dwestneat@seattletimes.com. His column runs Wednesday and Sunday.
dwestneat@seattletimes.com | 206-464-2086

Partner Video

Advertising


Advertising
The Seattle Times

The door is closed, but it's not locked.

Take a minute to subscribe and continue to enjoy The Seattle Times for as little as 99 cents a week.

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Subscriber login ►
The Seattle Times

To keep reading, you need a subscription upgrade.

We hope you have enjoyed your complimentary access. For unlimited seattletimes.com access, please upgrade your digital subscription.

Call customer service at 1.800.542.0820 for assistance with your upgrade or questions about your subscriber status.

The Seattle Times

To keep reading, you need a subscription.

We hope you have enjoyed your complimentary access. Subscribe now for unlimited access!

Subscription options ►

Already a subscriber?

We've got good news for you. Unlimited seattletimes.com content access is included with most subscriptions.

Activate Subscriber Account ►