Whether tax incentives work, whether they are justified, what their respective roles in redistribution are, and whether both are twin props of an oligarchy. I would like briefly to touch on another facet of the relationship – companies that do their best to avoid paying taxes but have foundations or practise other forms of philanthropic activity.  

The examples are well publicised: The Ethical Consumer’s website publishes ‘a selection of the companies who score “worst” for tax avoidance’. Those listed include Amazon, eBay, Google, Ikea and Starbucks. Some of these have a long history of tax avoidance. A 2019 article in the UK’s Guardian newspaper reports on allegations that Amazon UK Services paid ‘diddly-squat’ in corporation tax in 2018.  

In 2016, the Independent newspaper revealed eBay’s US annual report recorded UK revenues of $1.3 billion (£980 million), but it paid only £1.6 million to the UK exchequer according to UK accounts filed at Companies House. A Fortune.com article in 2019 cited analysis by the Institute on Taxation and Economic Policy (ITEP) that found 60 profitable companies – among them Amazon – reported a collective income in excess of $79 billion, but ‘avoided all federal income tax’.  

Two questions: how is this happening and why is it happening? The first is relatively easy to answer. As one of the contributors to this special feature mentions, taxes are national, and companies frequently aren’t and can take advantage of this. The Fortune.com article highlights some of the means used: moving profits to countries with more favourable tax regimes, moving intellectual property to countries where it is lightly taxed, and taking advantage of tax credits on, for example, R&D. It’s true that eBay is not simply Pierre Omidyar, nor is Amazon just Jeff Bezos, but it’s hard to believe that the individual philanthropists behind these corporations don’t exercise a significant influence on them and their practices (while he stepped down as CEO in 2021, Bezos remains executive chair of Amazon).