Amazon, the Elephant in the Bookshop
Amazon is one of many examples of a gigantic problem. International corporations shirk from contributing their just share to financing the community. Complicated corporate structures enabler exploiting loopholes and differences in the law from country to country. Hosts of advisers and lawyers have constructed a "tax avoidance industry."
AMAZON, THE ELEPHANT IN THE BOOKSHOP
[This article is translated from the German on the Internet, http://www.attac.de/steuertricks.]
In Germany, Amazon dominates with 50 to 70% of the online business with books. There has never been such market power in the book trade. Still this is not enough for the corporation which is advancing into more and more business fields like the food industry.
Amazon pays very trifling taxes
On October 4, 2017, the EU Commission declared Luxemburg must demand back around 250 million euros from Amazon. For years, the company enjoyed special treatment in Luxemburg and paid only 8% tax instead of the customary 29%. A large part of the profits could be shifted to Luxemburg since the giant delivery centers in Germany are not classified as "distribution centers." Since 2016, a taxable branch has existed in Munich. However, a study of the Otto Brenner foundation estimates how much Amazon reduces its profits and its taxes. 200 million euros would be due measured by its sales in Germany but Amazon pays only 20 to 50 million euros - an enormous difference.
Tax advantages at the expense of the general public
Amazon is one of many examples of a gigantic problem. International businesses shirk from paying their just share to finance the community. Complicated corporate structures enable exploiting loopholes and differences in the law from country to country. They are supported by hosts of advisers and lawyers who have constructed a "tax avoidance industry." According to estimates, 50 to 70 billion euros in tax revenues are lost in the EU alone - every year. Smaller rivals like local bookshops that cannot keep up with this tax dumping suffer, not only the public budgets.
A new tax system for the economy of the 21st century
The past system of corporate taxation is totally outdated in view of globalization and the mobile digital economy. Online business and the increased significance of immaterial goods (brand-names, patents, software... ) encourage shifting profits to low-tax countries where tax authorities are largely powerless. Therefore, Attac demands a genuine system change. We need a robust aggregate corporate tax and minimum tax rates. With the aggregate corporate tax, the global profit of a company would be apportioned to the states where it is economically active. The profits in the individual countries will be regularly taxed - at around 29% in Germany. Tax tricks and shifting profits will not be possible any more.
Olesya Kazantseva, "Base Erosion and Profit Shifting," 2015, https://www.indybay.org/newsitems/2017/12/06/18805126.php
ZERO DEFICIT POLICY CRITICIZED
Distribution Deficits and Supply Shortfalls
Press release of the Alternative Economic Policy study group in Bremen, Germany
By the Alternative Economic Policy study group
[This press release is translated from the German on the Internet.]
A changed economic policy cannot be expected. Decision-makers persist in neoliberal thinking. The market is good, the state is bad. This is particularly striking in the delusion of a "zero interest policy," a relapse of the old story of the 1920s as though a Keynesianism in economics never existed.
The new SPD finance minister supports the "zero deficit" like a monstranz and causes massive social costs. These costs strike people altogether and affect nearly all areas of life - from decayed infrastructure including the German Federal Railway, the housing shortage, the nursing emergency, inadequate education spending and a merely half-hearted policy for protecting the atmosphere. Poverty increases in the country in an unbearable way. Thus, problems cannot be solved but will become even worse in the future.
Germany cannot arrive economically in the 21st century with its senseless ideology of austerity and cuts. The small-minded and petty-minded mentality in the dominant politics brakes the recovery in the European Union and the euro zone.
The 2018 Memorandum shows urgently necessary alternatives to the economically narrow-minded "zero policy." In Germany, domestic demand must be strengthened. Higher incomes for dependent employees and more state spending are vital. The state share is much too low. In Europe, cooperation must be strengthened instead of a blind competition. Prof. Heinz J. Bontrup explains: "The German balance of trade surpluses were and are gained at the expense of dependent employees and therefore are counter-productive with a fire risk." Germany's chronic balance of payment surpluses are by no means a sound indicator of competitiveness. Rather, they refer back to domestic economic disparities. Producing more than is consumed is senseless while important domestic areas like infrastructure, nursing, education, affordable housing and public housing construction are badly neglected.
Millions of precarious jobs have resulted in poverty wages and later ensure old-age poverty. Many citizens turn away frustrated from established politics. National ideas that are hyper-dangerous for democracy find a hearing more and more...
Instead, more participation on the labor market is urgently necessary. "Contrary to the manipulated official statistics, mass unemployment with a growing number of precarious workers in poverty characterizes society," Heinz J. Bontrup declares. Therefore, reduced working hours with neither pay nor staffing levels reduced is urgently necessary and could be financed without problem in rich Germany. In 2017 alone, over 2.3 trillion euros of distributable value-creation was produced in Germany. The distribution question is the core problem in Germany. "Mammoth capital in the hands of a few means the financial markets are not functioning any more and risks mount intensively again," Mechtbild Schrooten decries.
On this background, the Alternative Economic Policy study group urges abandoning strategies of redistribution from bottom to top. Everyone must be included in economic growth. Work pay must increase, working hours reduced and the social state developed and not dismantled.
For financing, taxes must increase tremendously. In the past, the cause of the much deplored state indebtedness was excessively low taxes. Therefore, the top tax rate and corporation taxes must be raised. In addition, a one-time wealth tax must be levied with an immediate reintroduction of the property tax. A public investment program of at least 120 billion euros could be financed along with additional state indebtedness. The Alternative Economic Policy study group admonishes again a democratization of the economy. The 40 million dependent employees in Germany must finally have equal rights to capital in the economy.
Alternative Federal Budget (Canada), Feb 2018, 156 pp, https://www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2018/02/Alternative_Federal_Budget2018.pdf
Beigewum Austria, "Zero Deficit Myth," https://www.indybay.org/newsitems/2018/06/01/18815373.php
Philipp Heimberger, "More Public Investment is Sensible and Necessary," September 2016, https://www.indybay.org/newsitems/2018/06/22/18815874.php
Alternative Economic Policy study group, "Memorandum 2017," https://www.indybay.org/newsitems/2017/06/05/18799931.php
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