Amazon is now the world’s largest investor in research and development
One of the more amusing things that we’re told about the tax dodging by the internet giants is that the government needs all that money in order to be able to invest. We’ve got low productivity rises, this means that wages will rise slowly into the future – and it’s true that if productivity rises are slow then so will wage rises be. Thus the Treasury should get a goodly slice of the moolah so that those wise people in the House of Commons can invest it.
This rather fails with Amazon:
Amazon passed Volkswagen AG in late 2016 to become the world’s biggest corporate R&D spender, and its hold on the No. 1 spot has only grown more secure since.
Amazon doesn’t pay a dividend, the only share repurchases it does are to buy the stock that is then awarded to employees as part of their pay. It also doesn’t make much of a profit. Sure, the number can be large, but as a percentage of anything it has always been tiny. The reason being that any money they do make on one line of business is then sent off to be invested in some other line.
They’re actually doing what people claim they want companies to be doing, sending their profits back into investment so as to create more growth and more jobs with higher wages in the future. So this claim that they should pay more taxes so that government can invest the money is more than a little odd.
Of course, the claim that companies should pay more tax so that government can invest is ridiculous anyway. The company can invest it itself, or it can give it all to shareholders. Who then make the decision to either spend it – raising demand and thus wages- or invest it – raising future growth and future wages. There’s nothing else that can be done with money, you either spend it or invest it, that’s all that’s possible.
The real complaint here is that the politicians can see a pot of money and they’re pissed off that they don’t get to spend it. But then we knew that, right?
Posted: 12th, April 2018 | In: Money, News, Technology Comment | TrackBack | Permalink
