Besides being known for their ability to brilliantly sell bad coffee, Starbucks has been the recent face of abusive multinational corporations that pay little or no taxes in the UK and Europe. There are a number of multinationals that are abusing the tax system, including Apple (they pay less than 2% on profits outside of the US) but at the moment, the brunt of the hostility is focusing on Starbucks.
Maybe it’s because they have so many storefronts around the world, they are easier to target though maybe it’s because Starbucks has paid no taxes on over $630 million in sales. Starbucks, Apple and others all insist that what they are doing is completely legal and it probably is. Just as we have a dysfunctional tax code in the US, many other countries share a similar problem.
The multinationals are able to lobby for the changes or exceptions and then pay as little as possible. At the same time, many are the same companies that can’t squeeze enough out of employees and the system, while recording record high profits for the corner office team. (The UK should brace itself for another interesting exercise in taxes now that Papa Johns has brought their lousy pizza to the UK.)
It’s simply what these companies do, so there are surely many more similar stories out there. Enough is never enough and they won’t stop pushing off costs and taxes as long as they can get away with it. And of course, the political class is all too happy to let them get away with it and then some.
Whether this idea of “occupying” Starbucks will spread is still questionable but it’s an interesting start. The Guardian:
The direct action group UK Uncut plans to turn dozens of the coffee empire’s UK branches into creches, refuges and homeless shelters to highlight the chain’s tax avoidance tactics.
The announcement of the action comes on the day a Starbucks executive faces questions from the House of Commons public accounts committee over why the company paid no corporation tax in the UK during the past three years, despite senior US management trumpeting the company’s profitable operations in Britain.
MPs will also question management representatives from Google and Amazon, both of which have faced criticism for basing their European operations in countries that have lower tax rates such as Ireland and Luxembourg.
Just as they do at home, these companies can easily throw legal and accounting bodies at situations like this and pay little or nothing, as in the case of Starbucks. When they’re on the phone for earnings calls or potential (stock) purchasers they say they’re profitable but at tax time, it’s suddenly a different story.
All of this comes at a cost to society. The same society that they’re all relying on to be good consumers. The same society that has infrastructure that they all depend on as well as a stable environment for selling. Think back to the “We built this” from the campaign. Everyone needs to do their part but as it stands today, the multinationals aren’t pulling their fair share.
The cost for everyone else is going to add up and we all know who will be stuck with the bill. All of us who don’t have swarms of tax attorneys are going to be asked to pay more and more or do with less until this abuse stops. We can also guarantee that during the process, the CEOs of these companies will be whining about the freeloaders who are being paid minimum wage or asking for luxuries such as healthcare. This needs to stop.