Taxing Affairs
Don't hate the player, hate the game.
Hands up if you’ve ever held money in an ISA? For those unfamiliar with UK financial products, an ISA is an Individual Savings Account. The attraction of these – and their predecessor schemes – were that they were tax free. These days they’ve been rendered largely redundant after George Osborne’s introduction of a tax-free Personal Savings Allowance in 2016.
My point is, if you’ve ever had a cash ISA then the fact of the matter is that you’ve avoided tax – just like Amazon. While they may have exploited every loophole they could find in very creative ways, they – like all the others – haven’t actually broken any tax laws.
As usual there’s two sides to every story. These giant companies might save Governments money by collectively employing hundreds of thousands of people and therefore reducing the need for benefits. On the other hand, they massively benefit from national infrastructure for which they are paying a relative pittance towards maintenance.
There’s a lot of anger directed at the convoluted financial machinations of these multinational corporations. Contrary to popular misconception there is no legal requirement for a company to maximise shareholder value. Nevertheless, that appears to have been the modus operandi for big business – the pursuit of profit over everything else.
Thankfully, that appears to be changing – albeit slowly – and shareholders are putting increasing pressure on company boards to behave in a more responsible and ethical manner.
As for the financial affairs of the individual – specifically Bezos – inflation-adjusted and expressed in terms of a percentage of GDP, both Carnegie and Rockerfeller were far richer.
Roosevelt’s Wealth Tax Act of 1935 had a top rate of 79% on incomes over $5 million. This applied to only a single taxpayer: John D. Rockefeller, Jr.
Unlike either of those earlier businessmen, Bezos isn’t generally well-known for his altrusium and philanthrophy – unlike some of his contemporaries, say Gates or even Zuckerberg.
Again, that appears to be changing if a recent $10 billion donation to help fight climate change is anything to go by.