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“One of the biggest differences we make in the lives of others is when we pay our taxes. It is our taxes that pay for the public services our communities depend on to survive. A corporation that is dodging taxes cannot claim to be morally responsible.” — Larry Brown, NUPGE President.
Ottawa (30 Aug. 2017) — Apple CEO, Tim Cook has recently been talking about the need for companies like Apple to show “moral responsibility.” For anyone familiar with Apple’s record on tax dodging, that sounds a bit like Donald Trump preaching humility.
“One of the biggest differences we make in the lives of others is when we pay our taxes. It is our taxes that pay for the public services our communities depend on to survive. A corporation that is dodging taxes cannot claim to be morally responsible,” said Larry Brown, President of the National Union of Public and General Employees (NUPGE).
Apple dodges billions in taxes
In 2016, Citizens for Tax Justice reported that Apple had more money in tax havens than any other corporation. Using tax havens allows Apple to avoid taxes around the world.
It’s estimated that shipping profits to tax havens has allowed Apple to avoid $65.4 billion (US) in taxes in the U.S. A European Commission decision a year ago found Apple owed €13 billion ($19.4 billion Canadian) in taxes on its European profits.
Even though the European Commission decision would have allowed Apple to pay a maximum tax rate of 1 per cent, Tim Cook didn’t recognize that the morally responsible thing to do would be to pay up. Instead he claimed that forcing Apple to pay its share would be bad for investment and job creation.
When public services are short of funds people suffer
After several years of austerity the world is filled with examples of what happens when public services are under-funded. People suffer.
And we also know that austerity policies have been foisted upon us because of choices politicians have made — choices that have been enthusiastically promoted by corporate CEOs. Instead of ensuring people have access to safe drinking water, governments have allowed the wealthy and large corporations to keep using tax havens. Instead of introducing pharmacare, governments have lowered tax rates for the wealthy.
Apple has plenty of company when it comes to tax dodging
Apple isn't alone when it comes to tax dodging. Canadians for Tax Fairness has estimated that Canadian money in tax havens is at an all-time high. In the U.S., three-quarters of Fortune 500 companies have subsidiaries in tax havens.
Fair taxes first step towards moral responsibility
Solving many of the world’s problems — whether it’s cleaning up the environment or ending poverty — requires well-funded public services. Well-funded public services require both corporations and wealthy individuals to pay their fair share of taxes.
No matter how good their intentions, corporations will not pay their fair share in taxes unless they are required to do so. Tim Cook’s reaction to the European Commission’s requirement that Apple pay what was a very modest settlement, given how much of a profit it made, makes that clear. The responsibility of CEO to maximize profits for shareholders will come ahead of any moral responsibility to the people in the countries where her/his corporation operates.
Fortunately the public are willing to provide the moral responsibility that CEOs cannot. There is growing pressure on governments to crack down on tax havens and other loopholes that benefit corporations and the wealthy. In Canada we’ve seen a number of positive steps as a result. The challenge is to prevent tax fairness measures from being watered down by those who’ve grown accustomed to getting a free ride.