For many years now, corporate welfare, not benefit payments, has been the major problem facing the public purse. Kevin Farnsworth, author of the 2012 book Corporate Welfare Versus Social Welfare understands this only too well, even if the mainstream media and our politicians refuse to report on his research. His book provides yet another reason why capitalism is incompatible with democracy and must be replaced with a socialist planned economy, an argument also made in the neatly titled book The Corporate Criminal: Why Corporations Must Be Abolished, which was published earlier this year by Steve Tombs and David Whyte.
Dr Kevin Farnsworth’s excellent journal article “Corporate Taxation, Corporate Power, and Corporate Harm” (published in February 2015) thus provides a few choice quotes which illustrate some of the facts explaining the rise and rise of corporate welfare.
On Tax Rates
“In the UK, the main rate of corporation tax was 52% in 1980, 34% in 1990, 30% in 2000, and 28% in 2010. In 2013 it was cut to 22% and it is due to be cut again to 20% by 2015.” (p.26)
On Tax Avoiders
“According to the UK National Audit Office, 220 of the 700 largest firms in the UK paid no UK corporation tax at all in 2005/06, the period immediately preceding the global economic crisis. And this refers only to ‘legal’ tax avoidance; it does not include illegal tax evasion. Such widespread tax manipulation sits uncomfortably alongside the huge levels of public assistance received by private companies in corporate welfare each year.” (p.25)
“In 2009, the four major accountancy firms alone employed nearly 9,000 people and earned £2 billion in the UK and as much as US$25 billion globally from their tax work; an estimated 50% of their fees now come from ‘commercial tax planning’ and ‘artificial avoidance schemes’.” (p.31)
On Tax Collectors
“In 2012, HMRC reported that it had 1,200 staff overseeing 783 large businesses, in respect of which £25 billion in tax was potentially outstanding; this contrasted with 2,876 staff at the Department of Work and Pensions examining allegations of fraud worth £1.2 billion against benefit claimants.” (p.32)