“Tax the rich.” It is a global demand that would allow countries to increase their accounts and thereby improve public services while distributing wealth more fairly. And that is the spirit of a report prepared by the Left Group (GUE/NGL) that supports the introduction of a tax on large multinationals at European level. The idea is to impose a progressive rate of between 20 and 40% on 209 companies, allowing them to raise around 107 billion euros.
“This study proposes a general and permanent tax on persistently excessive profits to address the crisis of inequality and democracy caused by large corporations that are too big to democratically regulate and control,” says the text released this Thursday published.
The selection of companies was made from companies that had a turnover of more than 20,000 million euros per year over the past three years and had profit margins of more than 10%. The majority of companies are active in the energy, financial, technological and pharmaceutical sectors, although some also come from other sectors, such as the automotive sector (Mitshubishi) or the hospitality sector (McDonalds or Starbucks). The list includes a majority of Americans (including Apple, Philip Morgan or Coca Cola) and Chinese, including several banks.
In the case of Spain, the companies that La Izquierda tends to tax are Banco Santander, BBVA, Inditex and Iberdrola.
“With a tax like this, the 25 largest oil companies would pay around 25 billion euros per year; Microsoft, 4,000 million euros; and LVMH and Philip Morris, each up to 1 billion euros,” he illustrates: “This money could be used to increase inequality in public investments and finance the transition to a digital and ecological economy.”
The left assumes that large multinationals have a greater ability to avoid taxes, largely due to the tax benefits they enjoy in some countries.
“Major US tech companies have paid just over €10 billion in EU fines over the past 20 years, which is roughly equal to the sum of their excess profits made in the EU each year. And sometimes regulation can actually be the source of persistent excess profits, as in the case of excessive patent protection in the pharmaceutical industry. In most cases, the result is high profitability, which encourages further growth in corporate power. In these cases, an excess profits tax could provide support while regulatory or antitrust efforts fail,” the report said. The EU is in full battle with 'big tech'. Some €24 billion is currently under dispute in the European courts.
The report recalls that there are already experiences of taxing the extraordinary profits of large companies, as recently happened with the energy crisis. “As petrol prices rose to new record highs, almost reaching the record highs set in the last major oil crisis in 1980, oil and gas companies reaped between €200 and €300 billion in windfall profits from European customers. The EU has collected around 20 billion of these benefits with the solidarity contribution,” said the document, which also refers to the extraordinary taxes on energy companies and banks in Spain, which The government wants to raise 1.3 billion extra money.
“We don't need cuts in Europe, neither in climate protection nor in pensions. What we need is fiscal justice. With a windfall tax on the unearned monopoly profits of powerful companies like Microsoft, Pfizer or Goldman Sachs, we could easily close budget gaps and fight poverty. It's just a matter of political will. The EU prefers to protect companies and cut spending on those who have nothing,” complains Martin Schirdewan, co-chair of the left-wing group.
“These powerful companies have more money than entire countries, but some pay lower tax rates than the local baker. They employ armies of pressure groups and influence politics in their favor. They shamelessly exploit their market power to gain competitive advantages, pocketing unearned and inflated profits. It is time for politicians to take action, limit the power of mega-corporations and take away their excess profits,” added the German Die Linke MEP on the eve of the European elections.