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Clamping down on Silicon Valley tax avoidance is a good start but what next?

By Jack Palfrey

Nov 6, 2018


Who knows what took them so long, maybe it was their deeply-rooted ideological commitment to slashing corporation tax, maybe it was the colossal lobbying power of these tech monoliths, or maybe it was simply the fact that supporters and members of the Conservative Party have a mean age of 142 so were succumbed by technophobia. Alas, in last week’s budget, Chancellor of the Exchequer Philip Hammond proposed a long-overdue new ‘digital services tax’ designed to clamp down on tax-avoiding tech giants. In a budget where fixing potholes was allocated £20 million more funding than education, this was genuinely worthy of some kind of praise. However, although it’s a good start, we have to go much further to address the problems these ever-powerful tech platforms pose.

After years of calls to clamp down on the likes of Google, Facebook and Amazon, the new tax will see U.S.-based tech companies with annual profits exceeding £500 million forced to pay a levy of 2 percent of U.K. revenues. I bet they’re shaking in their boots, right? Well, not really. It turns out that this is only likely to generate around £400 million per year which is nothing considering a recent report by Tax Watch estimated that the top five tech multinationals (Google, Apple, Cisco, Microsoft and Facebook) should be paying somewhere around £1.3 billion more than the £191 million they contributed last year.

It’s clear that in terms of tax avoidance this is only a small step on a very long journey, however the most urgent threat we’re faced with goes much deeper than taxing revenues appropriately. Rather, the real danger lies in the colossal social, economic and political power these few tech companies hold and exploit for financial gain. Where economic power was once defined in relation to who controlled the means of production, now it is framed around the ownership of information and by leaving them to their own devices free from political intervention this ownership has been concentrated into a handful of monopolistic tech platforms who now oversee the entire digital infrastructure that shapes our society. The repercussions of this are felt day-by-day and it’s clear that this system is not a sustainable one so now we urgently have to figure out what comes next, and that goes much further than simply taxing these platforms more.

Looking at where we go from here isn’t exactly new terrain, in fact, there’s a wealth of work out there looking at how we can better shape our technology-driven world. Back in September the left-wing think-tank IPPR released a report titled The Digital Commonwealth which takes aim at ‘universal platforms’ such as Apple, Amazon, Alphabet (Google) and Facebook—i.e. those that have accumulated the most data, the most advanced analytical capabilities and have the greatest ownership over the structures of the digital economy. The IPPR report proposes a number of policy measures to bring the digital infrastructures that these platforms have total control over into the public domain for the ‘collective benefit’ of society. Their argument is very much one of increased regulation, public ownership and forcing these major platforms to free up their data for uses deemed to be in the public interest.

There are much more radical alternatives out there too: ranging from the left-accelerationist arguments revitalised by the likes of Nick Srnicek, Alex Williams and the Laboria Cuboniks collective, to Paul Mason’s vision of a ‘postcapitalist’ future and the demands of Fully Automated Luxury Communism, mostly propagated by Aaron Bastani and the rest of the Novara Media lot. All of which, in some capacity, see automation and technological advancement as something which can in fact be emancipatory, if we’d only let it; offering utopian glimmers of post-work societies free from capitalist exploitation.

We may have a long way to go but that doesn’t mean we shouldn’t have an imagination. Simply taxing tech companies a tiny bit more may do little to address the deeper problems plaguing us at this moment in time. But even if it has marked a slight shift in changing attitudes to technology’s role in our society, then our job now is to keep building on that and continue to demand greater, more-radical changes. You’ve got to start somewhere, I suppose.