In France, for example, half the CAC 40 index—representing the 40 top companies by market capitalisation—still decided to pay out between €35 and €41 billion in dividends, despite receiving state aid from the short-time-work scheme to compensate workers for reduced hours due to the pandemic. In Germany, the list is also extensive, with carmakers featuring prominently—Volkswagen has placed around 80,000 employees on short-time contracts, yet still plans to pay around €3.3 billion in dividends. And in the UK, the world’s largest chemicals company, BASF, which received £1 billion in support funding, voted last month to pay out more than three times that amount in dividends to shareholders. [...]
This is why, while keeping in mind that the US administration has just announced that it no longer wants to take part in negotiations to overhaul the international tax system, it is urgent for countries to introduce, regionally or unilaterally, at least temporary taxes on the digital giants. This is one of five main recommendations proffered last month by the Independent Commission for the Reform of International Corporate Taxation (ICRICT)—of which I am a member alongside economists such as Joseph Stiglitz, Thomas Piketty and Gabriel Zucman—to enable states to cope with the explosion in spending caused by the pandemic. [...]
We already know that, in normal times, it is not taxation that pushes a company to invest in a country: it is more about the quality of infrastructure, the workforce, market access or political stability. And while expansion projects are constrained by uncertainty and corporate overcapacity, tax cuts will not stimulate private investment anyway. But they would certainly deprive governments of valuable resources.
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