It is us or them: companies pay or we lose income and services. It’s as blunt as that

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As the Guardian notes this morning:

Unions have organised a Day of Action, with workers in Spain, Greece, Italy and Portugal all due to hold protests today

There is good reason for those protests. As I noted on Labour List yesterday, the current crisis is on of a lack of tax. The graph for the UK looks like this:

What happened in 2008 was that government income collapsed. Spending was not out of control. What happened was tax was no longer being paid.

And that is exactly why beating corporate tax abuse is vital. The world's major companies are sitting on hundreds of billions in cash - Apple has more than $100 billion alone. UK based companies have varying estimated sums:  the lowest estimate is £250 billion; some estimates are three times that. This is money they are simply withholding from the economy and are not investing. Despite that they demand, and get, tax cuts. And despite that the are still tax cheating.

We are paying with austerity, cuts, frozen incomes and unemployment for the fact that these companies are not paying their taxes and are refusing, despite their enormous cash piles, to do anything with them.

There is, of course, a moral imperative to make sure that corporation tax is properly paid. But there is also a compelling economic case for doing so too.

The money we need to turn the world's economies round is being hidden in corporate balance sheets. It's being stacked  by Google in Bermuda, Starbucks in Switzerland and Amazon somewhere so secret they can't even tell parliament where it is. And we need it, now. We need to force this money into the economy because companies aren't using it but the economy needs it. And we need it to rebalance the government's books.

The case for taxing companies has never been more compelling.

The case for reform to make sure corporation tax works is even more compelling.

And the basis for reform is relatively simple. I set out a way of doing it, here.

It just takes courage - the courage those who are protesting have got, and the courage those in power need.


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