Microsoft's tax avoidance by use of now familiar sales operations in places like Ireland, Puerto Rico and Singapore saves them $4.68 billion in tax a year.
The best estimate of the world aid budget that I can find is $133.5 billion a year.
So Microsoft avoids a sum in tax equivalent to 3.5% of the world aid budget each year.
Maybe Bill Gates might like to discuss the social justice in that. Many of the savings will, of course, be in countries where aid is delivered.
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Isn’t an essential part of telling the rest of us to give money to the Third World a reluctance to pay tax – Geldof, Bono and now Gates?
‘Why is it unethical to comply with the law? That is precisely what anyone who claims a company is immoral if it legally minimises its tax is saying. That is what anyone who boycotts Starbucks, or any other multinational company, is saying…[they] see to be setting themselves above the law.’
So opens a piece in Saturday’s Guardian by David Giampaolo (CE of Pi Capital) and Geoffrey Wood (Professor Emeritus of Cass Business School and the University of Buckingham). You may have missed it, Richard. Their underlying argument is to question what morality has to do with taxation (‘First of all, what place does morality have in this?’) I won’t bore you with the rest as it’s such a partial and selective take on taxation that I wonder if the authors’ inhabit the same planet as I do. It’s also a graphic illustration of how economists with a certain neo-liberal view of the world can peddle their ‘morality free’ message to imressionable students.
But anyway, the point I was going to make about Microsoft is that people of a certain ilk would no doubt argue that what Microsoft doesn’t pay in taxes the Bill and Belinda Gates Foundation gives away in grants and such like, thus avoiding government interference. This is a line that Giampaolo and Wood wouls support, I’d guess, given that they close their piece by quoting Harold Macmillan. ‘Politicians, he said, should “leave morality to the bishops”.’ What insightful and inspired thinking (not)!!
I saw it
And in the interests of a calmish weekend decided to ignore them….
Wise move 🙂
Ivan, for me your comment brings into my mind the ethics of philanthropy, especially with respect to ethics of billionaire philanthropists and venture philanthropy, two trends that are becoming more prevalent in the UK and the US. yes the Bill and Melinda Gates Foundation might give grants etc to developing countries with money that Microsoft has saved via tax avoidance (very simplistic way of looking at it, I know) but it should not, in my opinion, be the role of wealthy philanthropists to decide where and how literally billions of pounds/dollars are spent. isn’t that what taxes are for? Because surely your wealthy philanthropists will have their favourite causes and will not necessarily direct their wealth where the need is greatest. that is the job of government, and the government should raise funds for this purpose through taxes. instead governments around the world allow charities, foundations and individuals do the job it should be doing and as such the lions share of funds are directed to the most popular causes, or to those close to the heart of rich philanthropists. if i had the choice of Microsoft paying its taxes or Bill Gates eradicating malaria before he dies i would have to go with the former. I’m not denying what his foundation does isn’t worthy but why is he allowed to choose where such vast sums of aid are channelled when we elect people to fairly do this and have a perfectly good model to raise the cash (tax)?
I agree with you
*melinda gates foundation – sorry can’t edit my post
Microsoft is not Bill Gates’s company anymore. He is the chairman of the board, but the real power is held by Steve Ballmer as the CEO.
(You can actually tell it’s not Bill’s company because since he left it’s been one cock-up after another – Vista, Zune, Windows 8, their attempt to build a social network…)
Microsoft has operated in the same way since day one – Bill’s way.
It is a company based on copying the ideas of others, and all kinds of activities which are anti-competitive (as upheld in court).
Gates is still the largest stake-holder by a long shot with a holding worth about $12bn in his own name, and I don’t believe he has ever owned the company 100%.
Microsoft has made plenty of duff products over the years, both with and without Gates as CEO, Windows ME for example.
This is a man who has made a lot of money by dubious means, including tax dodging.
His has grabbed all he can with one hand, and now he gives a part of it back with the other hand and expects us to bow down and be grateful?
[…] Richard Murphy has calculated that Microsoft avoids a sum in tax equivalent to 3.5% of the world aid…. […]
Can anyone recommend a search engine run by a company that pays corporation tax etc. I am finding it very easy to boycott amazon, Starbucks etc but Microsoft and google seem to have a huge grip on the market
Sorry….
There aren’t many alternatives.
You might want to look at Yandex http://www.yandex.com/
They don’t appear to be connected with MS or Google. It’s a Russian company and listed on NASDAQ. I have no idea on what tax they pay.