Microsoft’s tax avoidance by use of now familiar sales operations in places like Ireland, Puerto Rico and Singapore saves them $4.68 billion in tax a year.
The best estimate of the world aid budget that I can find is $133.5 billion a year.
So Microsoft avoids a sum in tax equivalent to 3.5% of the world aid budget each year.
Maybe Bill Gates might like to discuss the social justice in that. Many of the savings will, of course, be in countries where aid is delivered.
Of course pretty much piss all of Microsoft’s revenues come from places where aid is delivered. Because aid goes to poor countries where they tend not to have many computers and when they do they tend to nick the software to run them.
Indeed, it would be easy enough to dig up the claimed numbers for software piracy (contentious enough as they are) and show that Microsoft’s losses from this are greater than any tax savings.
But much more importantly, the aid budget (really, the official aid budget, this doesn’t include any charitable stuff) isn’t the right comparator. What is is foreign direct investment. Which, last time I looked at least, was running at $500 billion a year just into Africa.
That’s the thing that is making those poor countries and poor people richer. And if multinational companies are fiddling on a few billions here or there of tax then what the fuck do we care if they’re at the same time pumping hundreds and hundreds of billions into employing people, providing jobs, in general making people richer?
And really importantly, the measure of how much wealth a company produces isn’t in the profits it makes nor even in the wages it pays: and certainly not in the tax that is skimmed from it. The real value, what really creates wealth, is the consumer surplus from the use of the company’s products. How much do the people who use the shit get over and above what they’ve paid for it?
And there I’m afraid that Ritchie and his ilk are really onto a loser. For the best empirical research so far seems to show that the entrepreneur captures something like 3% of the total value created by his/her activities. (Technically, it’s of Schumpeterian profits.) The other 97% goes to consumers, the value that they get from the use of what is produced over and above what they pay for it.
Say Bill Gates has made $40 billion. That means that consumers have made $1.3 trillion out of his activities.
At which point we’ve some tosser wibbling about $5 billion for the entire company? Please, please, do fuck off.