The coffee chain is voluntarily paying £20m to the UK taxman - an action that has been celebrated as a victory over the multi-nationals, promising to have a ripple effect on other tax dodgers. But will it?
The only reason Starbucks is paying up is because it's a highly visible high street brand and vulnerable to a public backlash. The thought of its customers being made to feel guilty by protesters standing outside its shops was just too much for Starbucks to contemplate. Far better to throw the taxman - and by implication, the British public - a token £20m to throw them off the scent.
It's significant that Google and Amazon who are also in the frame have not made the same move - and they're unlikely to, for the simple reason they're not on the high street. The public use their services, yes, but only from the privacy of their own computer screens. Moreover, the number of multi-national corporations on the high street is just the tip of the corporate iceberg. Most carry on unseen below the waterline in the far larger business-to-business sector. Just like their high street peers, they take advantage of differing national tax regimes to minimise their taxes in just the same way, but we rarely hear about it. As Stephen Williams, Treasury spokesman for the Liberal Democrats told the BBC, "It's extraordinary. People have been joking that some of these multinationals seem to think that paying tax is voluntary. Well Starbucks have confirmed the joke really."
The glaring question no one seems to be asking is: why is it our tax laws are so loose or full of loop-holes as to allow multinationals to get away with paying far less than is fair? If they're not paying enough, the answer would normally be simple: tighten the law! But the truth is that in a globalised world where multinationals can move or structure their operations to make profits in whatever country has the lowest tax rate, governments have been engaged in a destructive race to steadily lower their corporate tax rates to the point, now, where the gap between what is paid and what is fair is so large as to result in the idiotic situation we see today: Starbucks voluntarily paying a "tax" just to avoid a PR disaster while the rest get away free. This is no victory. It's an embarrassment.
UK Uncut, a group that protests against corporate tax avoidance, also seem to have taken the bait by carrying on their protest against Starbucks regardless of the announcement. By focusing on Starbucks, and so effectively letting other multinationals off the hook, they're missing the wider point that the problem won't be solved by any amount of protest, but only by civil society around the world getting together to drive governments to cooperate with one another to produce a seamless global tax regime which the multinationals can't escape.
Ambitious? No doubt! But maybe it's just realistic. Because whether its corporate tax levels, climate change, re-regulating the banks or any other global problem, the only kind of action that can now prove effective is global action. Anything less will only be undermined. National action, or even action by a small number of countries, whether by governments or protesters, simply doesn't cut it anymore. The new globally mobile economy in which we now live - like it or not - demands much more of us. It demands global agreements and social movements specifically designed to drive all, or virtually all, governments to act together, simultaneously, to implement them. For only then will the banks, the multinationals, the hedge funds and others find they have no place to run; no place to hide.
Hard though it may be to accept, maybe it's time we all woke up to smell the coffee.
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