Saturday, July 10, 2010

Paying the right amount of taxes

Dear Colleagues

Most people would agree with the basic fact that the US Federal Government is running a huge deficit and building huge debts ... and this issue is likely to get even more problematic in future years as the profile of the economy changes.

Some people seem to think that paying less taxes to the government is a serious sustainable solution ... and I would argue that this might be so where tax rates are very high for both the corporate organization and the individual wage earner ... but in the world where citizens expect a lot from their government, then the government must get the money from somewhere.

In my view one of the big questions in Corporate Social Responsibility (CSR) is how much tax is the corporation paying and where?

Transocean, the owner of the drilling rig platform Deepwater Horizon that was destroyed in the BP Gulf disaster has an interesting tax history ... or perhaps tax plus a lot of other arcane things that I have difficulty understanding. Bottom line, however, is that the company used to be in Houston in Texas in the United States of America ... and then moved to some offshore islands ... and then moved to Switzerland. I can only imagine what the reasons for these relocations could have been ... but I am 100% sure that making responsible payments of taxes to the Federal Government of the United States was not high on the agenda!

The corporate world is the "engine" that drives the economy ... and creates wealth. But quality of life is assured in large part by what various levels of government do to ensure that the services needed are available ... and standards of reasonable behavior get followed. This costs money ... a lot of money ... and will perhaps cost a whole lot more in the future than it has in the past. The corporate community needs to get interested in this subject ... not in terms of being "against taxes" ... "against government intervention" ... but being FOR something that has been thought through and could work.

I know that some people in the corporate world have amazing brains ... and I would like to see some evidence that thinking about the performance of society as well as the corporate bottom line is being given some modest level of serious thought using this intellectual capacity!

Peter Burgess

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