The tax-avoiding Facebook mogul and an act of charity that reeks of hypocrisy
The tax-avoiding Facebook mogul and an act of charity
that reeks of hypocrisy
By IAN BIRRELL FOR THE DAILY MAIL
PUBLISHED: 20:18 EST, 2 December 2015 | UPDATED: 03:44
EST, 3 December 2015
Once, it was enough to put a notice in the newspaper when
your child was born. But Mark Zuckerberg, the multi-billionaire founder of
Facebook, likes to do things differently.
So he welcomed his newborn daughter, Max, into the world
with an open letter on his social media site, in which he and his wife,
Priscilla Chan, pledged to donate almost all their £30 billion fortune to
charity during their lives.
The happy couple talked rather smugly about how their
first child gave them cause to reflect on the future, saying they were inspired
by their desire to build a better world and because they have a ‘moral
responsibility to all children in the next generation’.
Within hours, more than one million Facebook devotees
demonstrated their ‘like’ of this noble gesture, among them the actor Arnold
Schwarzenegger and Melinda Gates, wife of fellow mega-rich philanthropist Bill
Gates.
There was, of course, an outpouring of praise —
particularly online — for this latest plutocrat declaring his intention to hand
over great wealth.
Zuckerberg, 31, is the most recent in a growing line of
digital billionaires turning to charity, and their giveaways are almost always
a public, rather than a private, event played out on social media.
He and his wife deserve credit, of course, for pledging
to use their huge mountain of cash to help wider humanity rather than
frittering it away on a life of fun.
Yet there is a dark side to this trend. For behind it
lies the sanctimonious hypocrisy of billionaires who build vast fortunes with
firms that avoid the taxes paid by the rest of society, then arrogantly think
they are best placed to solve the planet’s problems.
Zuckerberg talked in his letter of creating stronger
communities. Yet Facebook, like too many technology behemoths, is a serial tax
avoider undermining government through its stubborn refusal to pay its fair
share to society.
Last year, this all-conquering social media firm handed
over just £4,327 in corporation tax in this country: less than the annual sum
paid in tax by the average worker.
Yet its staff in Britain took home an average £210,000
each in pay and bonuses, safe in the security of a society that relies on
public servants to protect them from terror, provide health care in hospitals
and repair the roads on which they travel to work.
The Facebook founder has hailed Bill Gates as his hero —
the world’s richest man, who has been revered as something close to a secular
saint after promising to give away the bulk of his £57 billion fortune.
But Gates became rich from a company that was even used
as a case study for a U.S. Senate inquiry into tax avoidance.
Microsoft was accused of avoiding paying £3 billion
annually in tax by shifting earnings around between low-tax nations. In Britain
alone, it reported £1.7 billion revenues in one year for online sales of
software, on which it paid no corporation tax. Zilch.
Gates even has the gall to tour the world telling
governments to take more and more money from taxpayers for his beloved foreign
aid programmes, once even branding those who oppose such policies as ‘evil’.
However noble the intentions of Zuckerberg and Gates, it
is pure hypocrisy to claim moral leadership while raking in immense wealth from
companies engaged in such base tactics.
In one radio interview, Gates spoke of how
philanthropists of the past such as the oil giant John D. Rockefeller offered a
model for him and his generation of billionaires.
It was an interesting comparison, since Rockefeller, a
ruthless monopolist, became the world’s richest man by using controversial
practices such as collusion with railroad companies to crush his oil industry
rivals — and then gave away $500 million to good causes.
He and other robber barons such as Andrew Carnegie, who
built the U.S. steel industry in the 19th century, are among the most notorious
examples of cut-throat capitalists who stop at nothing to build their fortunes,
then seek in later life to improve their public image with good deeds.
Today, we see a new wave wearing chinos and T-shirts,
building fortunes on grotesque foundations of grubby tax avoidance. Just like
their predecessors in the 19th century, they then use their wealth to win
public approval as philanthropists.
Larry Ellison, chairman of Californian technology giant
Oracle, is the world’s ninth richest person. He has also promised to give away
much of his money — yet his firm was among those attacked for ‘industrial scale’
tax avoidance by Parliament.
The harsh truth is that the likes of Zuckerberg and Gates
may be philanthropists, but they built those fortunes off the back of companies
engaged in massive tax avoidance
Google has a company motto proclaiming: ‘Don’t Be Evil.’
Yet far from being a paragon of virtue, a new tax designed by Chancellor George
Osborne to discourage multi-national giants from diverting profits to avoid tax
was named after the firm.
Needless to say, its billionaire chairman Eric Schmidt
claims the company always aspires ‘to do the right thing’. And, of course, he
has a family foundation devoted to solving ‘some of this century’s greatest
challenges across the globe’.
It is laudable to see the super-rich devote themselves to
good works and give away big sums for the betterment of others.
Many of these people are technological visionaries,
creating fortunes though their energetic entrepreneurship.
Yet too many of them seem to think it is acceptable for
their companies to avoid paying taxes, in part because they see themselves as
wonderful benefactors engaged in personal crusades to solve the world’s
problems.
In effect, they are saying the super-rich have the right
to ‘self-tax’ themselves by giving away money to pet causes, rather than the
companies with which they made their fortunes paying their fair share of tax to
governments, like the rest of us.
However much good they achieve, this is not just
breathtakingly arrogant, but profoundly undemocratic. And for all their skills
and smartness, they are often no better than governments at tackling problems
in public services.
Zuckerberg went on Oprah Winfrey’s TV show five years ago
to proclaim a $100 million gift to turn schools in the New Jersey town of
Newark ‘into a symbol of educational excellence for the whole nation’.
The donation was doubled with matching funds from others.
Yet his controversial scheme failed to meet its goals after blowing $20 million
on consultants, and running into opposition from parents, teachers and
community leaders.
But American multi-millionaire financier Foster Friess
actually praised this arrogance of the super-rich when defending the idea of
‘self-tax’ in an interview.
‘It’s that top 1 per cent which probably contributes more
to making the world a better place than the 99 per cent.’
He even argued that governments should pay digital gurus
for their contributions to society, rather than taxing them personally. ‘I’ve
never seen any poor people do what Bill Gates has done,’ he added.
The harsh truth is that the likes of Zuckerberg and Gates
may be philanthropists, but they built those fortunes off the back of companies
engaged in massive tax avoidance.
Such corporate strategy weakens society while placing
heavier burdens on the rest of us.
It is all too easy in our globalised age for corporate giants
to exploit tax loopholes and outwit inadequate politicians by paying the best
advisers to shuffle paper profits around the planet.
So by all means praise a plutocrat such as Mr Zuckerberg
for promising to give away extraordinary wealth. We must hope the money is put
to good use to transform lives.
But at the same time, do not be deluded by the self-proclaimed
altruism promoted so publicly by these titans of the technology revolution.
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