Tuesday, May 06, 2008

Fourteen companies, and primary education

Action Aid has issued a press release today. It is aimed at addressing UK Prime Minister Gordon Brown's call for action on world poverty.

ActionAid took a sample of 14 UK and US-based companies, all of which support the Business Call to Action. The results are remarkable. As they say:

"The charity used these companies’ published accounts to estimate how much tax it would expect them to pay worldwide if their profits were taxed at the corporate tax rate in their home countries. ActionAid has estimated what the tax liabilities of the 14 companies would be if their declared profits, excluding goodwill charges, were taxed in this way. The gap between this hypothetical tax bill and the tax actually paid averaged out at $6.3 billion a year, enough to ensure that every child in the world who is not currently receiving a formal primary education gets into school."

It might be worth reading that paragraph again, and consider the implications. And this is just fourteen companies. TJN's Richard Murphy, who contributed to the analysis, explains more, and provides a link to the full report.

The British Prime Minister, running the country that arguably does more than any other to undermine taxation around the world, is in a deeply conflicted position. Powerful British business lobbies want him to promote tax havens and abusive tax practices; those worried
about poor countries (and about ordinary people in rich countries) want the opposite. But there is an obvious way out of this false dilemma - as Larry Summers, a former U.S. treasury secretary, has just noted: promote international co-operation on tax and regulation, to end the corruption, secrecy and abuse that harm us all.

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