A new advocacy group led by Nobel-winning economist Joseph Stiglitz is trying to grab an unlikely recruit to support its charge to reform corporate taxes and get multinational businesses such as Apple, Google and Amazon to pay out more money: you.
The group, Independent Commission for the Reform of International Corporate Taxation, has launched a crowdfunding campaign to raise funds and awareness among the general public about how big firms -- particularly tech firms -- use old tax laws to their advantage.
Erika Siu, a consultant for ICRICT, said that tech companies are not the only firms that ICRICT and other critics take issue with. But many, such as Apple, Amazon and Google, she said, are the "worst offenders" because they benefit from the current system by using complicated — but legal — tax strategies.
"I don’t think it’s because they’re by nature evil enterprises," Siu said of the tech giants. "The nature of their business takes advantage of an outdated tax system."
The rules for taxing, she said, were first designed in the 1920s when companies were goods-based, rather than service-based. The idea of intangible goods or intellectual property -- concepts that are common in the technology sector -- weren't even a consideration for policymakers back then.
ICRICT, which just had its first official meeting in March, boasts a roster of economics, policy and development experts, including Stiglitz, former United Nations undersecretary Jose Antonio Ocampo and French politician and magistrate Eva Joly.
The way tax law is currently set up, multinational companies are subject to the taxes of wherever their operations are based. Companies therefore often choose to make the official bases of operations in countries that tax very little, or not at all. In some cases, firms have set up their operations in such a way that certain parts of the business are based nowhere and therefore not taxed at all. That's even easier when you don't have physical assets to worry about.
The problem, Siu said, is that countries, including the United States, miss out on tax revenue from these companies that could go toward the public school system or public works projects. And while tech firms and other multinationals often give generously to charity projects, she said, that doesn't balance out the damage to the greater good. Companies, she said, are still ducking their responsibilities.
"We’re the ones to have to produce that tax revenue, while the top one percent and their kids are in private school," Siu said.
Many tech giants have come under fire from governments around the globe over their tax acrobatics. Apple chief executive Tim Cook was memorably called up to the Hill in 2013 to talk about Apple's tax practices. Google and Amazon faced pointed regulatory questions and a lot of public outcry in Great Britain over their low corporate tax rates in 2015.
ICRICT points to findings from government committees and media that major tech companies pay a tax rate of less than two percent, and often much less. A report from the Senate Permanent Subcommittee on Investigations in 2013 said that Apple paid less than one percent of its taxes on profits made in Ireland. The committee also concluded that Apple avoided paying more than $44 billion in U.S. taxes that year. The U.K. Public Accounts Committee similarly found that Amazon and Google paid less than one percent on revenue generated by British advertising sales.
Apple and Google declined to comment. Amazon did not immediately reply to a request for comment. (The Washington Post is owned by Amazon chief executive Jeffrey Bezos.)
Corporate defenders say that these companies are just trying to maximize shareholder profits. When Cook was called to the Hill in 2013, Sen. Rand Paul (R-Ky.) noted that Apple is one of the country's most widely held stocks, thanks to its spot in retirement portfolios. Others point out how many U.S. jobs these tech companies have created.
In 2013, Cook said that Apple was the largest corporate taxpayer in the United States, paying out $6 billion in taxes that year. In 2014, Apple paid $10 billion. "We do not use tax gimmicks," Cook said at the time. He also offered four suggestions on how to simplify the U.S. corporate tax system, including a "reasonable tax" that would let foreign earnings come back to the United States.
That's quite different from ICRICT's solution, which is to have multinationals taxed as a single firm, and then taxed in each country where they employ workers and sell goods.
The group's main ire, however, is aimed at the Organization for Economic Co-operation and Development (
To that end, the group has published a recommendation paper and called for the OECD and the United Nations to have a conversation about how tax policies could be rewritten to reflect the modern economy and spread the wealth to more countries.
"ICRICT’s job is not to villainize corporations, and we’re not calling on corporations to give out of the goodness of their heart," Siu said. "We’re calling on governments to make proper rules that are in the interest of the public."
The group is headed to Lima, Peru, to host an open event as the leaders of the G20 gather to discuss development plans for the next 30 years -- as well as to the UN General Assembly meeting and many other high-level forums where they can speak to world leaders. To bankroll those efforts, the all-volunteer organization has started its crowdfunding campaign. But, Siu said, it serves a secondary purpose, as well.
"We could go to private foundations to secure funding," she said. "But we're crowdfunding because it’s a public issue. It's important to get the public involved."