The Raging 2020s

by Alec Ross

  Organized labor is in Sara Horowitz’s blood: David Gelles, “To Guide the Labor Movement’s Future, She Looks to Its Past,” New York Times, January 9, 2020, https://www.nytimes.com/2020/01/09/business/sara-horowitz-trupo-corner-office.html; Tejal Rao, “A Decade On, Freelancers Union Founder Sara Horowitz Takes Her Fight Mainstream,” Village Voice, February 13, 2013, https://www.villagevoice.com/2013/02/13/a-decade-on-freelancers-union-founder-sara-horowitz-takes-her-fight-mainstream/.

  Thirty years ago, more than half: “National Compensation Survey,” US Department of Labor.

  In Denmark, Finland, Norway, and Sweden: “Denmark,” European Trade Union Institute, accessed May 2020, https://www.worker-participation.eu/National-Industrial-Relations/Countries/Denmark; “Finland,” European Trade Union Institute, accessed May 2020, https://www.worker-participation.eu/National-Industrial-Relations/Countries/Finland; “Norway,” European Trade Union Institute, accessed May 2020, https://www.worker-participation.eu/National-Industrial-Relations/Countries/Norway; “Sweden,” European Trade Union Institute, accessed May 2020, https://www.worker-participation.eu/National-Industrial-Relations/Countries/Sweden.

  In Denmark, Sweden, and Finland: Dylan Matthews, “The Emerging Plan to Save the American Labor Movement,” Vox, September 3, 2018, https://www.vox.com/policy-and-politics/2018/4/9/17205064/union-labor-movement-collective-wage-boards-bargaining.

  Finland’s prime minister has called for: Anne Kauranen, “Finland’s PM Calls for Shortening Working Hours,” Reuters, August 24, 2020, https://www.reuters.com/article/us-finland-politics/finlands-pm-calls-for-shortening-working-hours-idUSKBN25K1M1.

  where 70 percent of the workforce is unionized: “Trade Unions,” European Trade Union Institute, accessed May 2020, https://www.worker-participation.eu/National-Industrial-Relations/Countries/Sweden/Trade-Unions.

  In Denmark, workers at companies: “Denmark: Board-Level Representation,” European Trade Union Institute, accessed May 2020, https://www.worker-participation.eu/National-Industrial-Relations/Countries/Denmark/Board-level-Representation; “Netherlands: Board-Level Representation,” European Trade Union Institute, accessed May 2020, https://www.worker-participation.eu/National-Industrial-Relations/Countries/Netherlands/Board-level-Representation; “Germany: Board-Level Representation,” European Trade Union Institute, accessed May 2020, https://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Board-level-Representation.

  The data support his claim: Nir Kaissar, “To Help Improve U.S. Wages, Check Out Germany,” Bloomberg, March 29, 2020, https://www.bloomberg.com/opinion/articles/2019-03-29/to-help-improve-u-s-wages-check-out-germany; Aleksandra Gregoriča and Marc Steffen Rapp, “Board-Level Employee Representation and Firms’ Responses to Crisis,” Industrial Relations 58, no. 3 (2019), 376–422; Fernando Duarte, “It Takes a CEO Just Days to Earn Your Annual Wage,” BBC News, January 9, 2019, https://www.bbc.com/worklife/article/20190108-how-long-it-takes-a-ceo-to-earn-more-than-you-do-in-a-year.

  Businesses in Denmark, Sweden, Germany, and Austria: “How Much Does Your Country Invest in R&D?,” UNESCO Institute for Statistics, accessed May 30, 2020, http://uis.unesco.org/apps/visualisations/research-and-development-spending/.

  Between 1998 and 2014: Alberto Manconi, Urs Peyer, and Theo Vermaelen, Buybacks around the World, INSEAD, September 2015, accessed May 2020, https://knowledge.insead.edu/sites/www.insead.edu/files/images/1bb_around_the_world_revised_-_september_8_2015–2.pdf.

  dozens of studies have found no clear evidence: Aline Conchon, Board-Level Employee Representation Rights in Europe: Facts and Trends (Brussels: European Trade Union Institute, 2011), https://www.etui.org/Publications2/Reports/Board-level-employee-representation-rights-in-Europe.

  councils have the right to veto: “Germany: Workplace Representation,” European Trade Union Institute, accessed May 2020, https://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Workplace-Representation.

  Larger companies have larger work councils: “Germany: Workplace Representation,” https://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Workplace-Representation.

  more than $32,000 spent per person: “Annual Determination of Average Cost of Incarceration: A Notice by the Prisons Bureau,” Federal Register, April 30, 2018, https://www.federalregister.gov/documents/2018/04/30/2018-09062/annual-determination-of-average-cost-of-incarceration; Nicole Lewis and Beatrix Lockwood, “The Hidden Cost of Incarceration,” Marshall Project, December 17, 2019, https://www.themarshallproject.org/2019/12/17/the-hidden-cost-of-incarceration.

  In 1945, members of the United Auto Workers: Merrie Najimy and Joseph McCartin, “The Origins and Urgency of Bargaining for the Common Good,” The Forge, March 31, 2020, https://forgeorganizing.org/article/origins-and-urgency-bargaining-common-good.

  The company resisted the union’s demands: Stephen Lerner, interview with Jack Corrigan, June 1, 2020.

  In December 2019, the organization published: “Concrete Examples of Bargaining for the Common Good,” Bargaining for the Common Good, December 20, 2019, https://smlr.rutgers.edu/sites/default/files/ciwo_bcg-memo.pdf; Stephen Lerner, “What Is Not to Be Done,” American Prospect, April 29, 2020, https://prospect.org/labor/what-is-not-to-be-done/.

  4: TAXES AND THE WORMHOLE IN THE GLOBAL ECONOMY

  No less than Albert Einstein said: “Tax Quotes,” US Internal Revenue Service, June 5, 2020, https://www.irs.gov/newsroom/tax-quotes.

  the billions of ads Google serves: Elisa Gabbert, “25 Fast Facts about Google Ads,” WordStream (blog), November 14, 2018, https://www.wordstream.com/blog/ws/2012/08/13/google-adwords-facts.

  Economists estimate that governments: Nicholas Shaxson, “Tackling Tax Havens,” Finance & Development 56, no. 3 (September 2019), International Monetary Fund, https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-global-tax-havens-shaxon.htm.

  FedEx pays less money in federal taxes: Matthew Gardner, Lorena Roque, and Steve Wamhoff, Corporate Tax Avoidance in the First Year of the Trump Tax Law (Institute on Taxation and Economic Policy, December 16, 2019), https://itep.org/corporate-tax-avoidance-in-the-first-year-of-the-trump-tax-law/.

  The merchants of ancient Sumer: “Taxes in the Ancient World,” University of Pennsylvania Almanac 48, no. 28 (April 2002), https://almanac.upenn.edu/archive/v48/n28/AncientTaxes.html.

  In medieval Japan, landowners lobbied: Encyclopaedia Britannica Online, s.v. “Japan,” by Marius B. Jansen and Kitajima Masamoto, March 19, 2020, https://www.britannica.com/place/Japan/The-Heian-period-794–1185; Amanda Foreman, “Tax Evasion’s Bite, from the Ancient World to Modern Days,” Wall Street Journal, September 23, 2015, https://www.wsj.com/articles/tax-evasions-bite-from-the-ancient-world-to-modern-days-1443028212.

  They proliferated after World War I: Nicholas Shaxson, Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens (New York: St. Martin’s Publishing Group, 2011), 26–27; John Christensen, email to Jack Corrigan, July 10, 2020.

  about one-third of all international trade: Nick Shaxson, “Over a Third of World Trade Happens inside Multinational Corporations,” Tax Justice Network, April 9, 2019, https://www.taxjustice.net/2019/04/09/over-a-third-or-more-of-world-trade-happens-inside-multinational-corporations/.

  In 2019, American corporations reported: Analysis of Bureau of Economic Analysis data (via Haver Analytics), by Brad Setser and Cole Frank of the Council on Foreign Relations, accessed March 18, 2020.

  Between 2004 and 2019, Google used: Edward Helmore, “Google Says It Will No Longer Use ‘Double Irish, Dutch Sandwich’ Tax Loophole,” Guardian, January 1, 2020, https://www.theguardian.com/technology/2020/jan/01/google-says-it-will-no-longer-use-double-irish-dutch-sandwich-tax-loophole.

  Google was forced to abandon: Toby Sterling, “Google to End ‘Double Irish, Dutch Sandwich’ Tax Scheme,” Reuters, December 31, 2019, https://www.reuters.com/article/us-google-taxes-netherlands-idUSKBN1YZ10Z; Jeremy Kahn, “Google’s ‘Dutch Sandwic
h’ Shielded 16 Billion Euros from Tax,” Bloomberg, January 2, 2018, https://www.bloomberg.com/news/articles/2018-01-02/google-s-dutch-sandwich-shielded-16-billion-euros-from-tax.

  Created in 2003, this Irish company: “Google Ireland Ltd.,” Bloomberg, March 16, 2020, https://www.bloomberg.com/profile/company/0202877D:ID.

  Google maintains corporate offices in dozens: Giovanni Legorano, “Google Reaches $333 Million Tax Settlement in Italy,” Wall Street Journal, May 4, 2017, https://www.wsj.com/articles/google-agrees-306-million-tax-settlement-in-italy-1493901007.

  The surrounding neighborhood: Art Patnaude, “Tech Workers Flock to Dublin’s Silicon Docks,” Wall Street Journal, May 28, 2015, https://www.wsj.com/articles/tech-workers-flock-to-dublins-silicon-docks-1432822827; Fiona Reddan, “Top 1000: Apple Overtakes CRH to Become Ireland’s Largest Firm,” Irish Times, May 10, 2018, https://www.irishtimes.com/business/top-1000-apple-overtakes-crh-to-become-ireland-s-largest-firm-1.3488309.

  the country’s 24 percent corporate tax rate: “Corporate Tax Rates Table,” KPMG, https://home.kpmg/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html.

  In 2018, Google’s Italian subsidiary: Google Italy Srl, “Google Italy Srl con Socio Unico: Financial Statements to 31-12-2018,” 4, accessed April 2020.

  In 2018, Google Ireland Limited generated: Google Ireland Limited, Directors’ Report and Financial Statements for the Year Ended 31 December 2018, 12, accessed April 2020.

  a €16.1 billion royalty payment: Google Netherlands Holdings B.V., Annual Accounts for Publication Purposes 2018 of Google Netherlands Holdings B.V., 11, accessed April 2020.

  In 2018, Google Netherlands Holdings B.V. did not employ: Sony Kassam, “Google Cuts Taxes by Shifting Billions to Bermuda—Again,” Bloomberg Tax, January 3, 2019, https://news.bloombergtax.com/transfer-pricing/google-cuts-taxes-by-shifting-billions-to-bermuda-again; Google Netherlands Holdings B.V., Annual Accounts for Publication Purposes 2018, 4.

  Where did it receive that license?: Gabriel Zucman, “How Corporations and the Wealthy Avoid Taxes (and How to Stop Them),” New York Times, November 10, 2017, https://www.nytimes.com/interactive/2017/11/10/opinion/gabriel-zucman-paradise-papers-tax-evasion.html.

  where the corporate tax rate is 0 percent: “Corporate Tax Rates Table,” https://home.kpmg/xx/en/home/services/tax/tax-tools-and-resources/tax-rates-online/corporate-tax-rates-table.html.

  In 2018, Google Netherlands Holdings B.V. paid: Google Netherlands Holdings B.V., Annual Accounts for Publication Purposes 2018, 11.

  The Netherlands did not tax: Isabel Gottlieb and Ruben Munsterman, “Netherlands to Impose Withholding Tax on Royalties, Interest (1),” Bloomberg Tax, September 17, 2019, https://news.bloombergtax.com/daily-tax-report-international/netherlands-to-impose-withholding-tax-on-royalties-interest.

  Like its Dutch counterpart: “Google Ireland Holdings Unlimited Company,” CRIF Vision-net, February 1, 2020, https://www.vision-net.ie/Company-Info/Google-Ireland-Holdings-Unlimited-Company-369511.

  Yet in 2018, Google Ireland Holdings took in: Google Ireland Holdings Unlimited Company, Directors’ Report and Financial Statements for the Year Ended 31 December 2018, 10, accessed April 2020.

  Through an agreement with Alphabet: George Turner, “Why the End of Google’s ‘Double Irish’ Tax Avoidance Will Come with a Nasty Hangover,” New Statesman, January 3, 2020, https://www.newstatesman.com/politics/economy/2020/01/why-end-google-s-double-irish-tax-avoidance-will-come-nasty-hangover.

  the company’s only physical presence on the island: Tim Sculthorpe, “The Post Box in Bermuda Numbered 666 Which Receives Google Profits Worth £8BILLION a Year,” Daily Mail, January 31, 2016, https://www.dailymail.co.uk/news/article-3425097/Don-t-evil-Google-sends-profits-worth-8BILLION-year-post-box-number-666-tax-haven-island-Bermuda.html.

  Eric Schmidt, CEO of Google at the time: Sissi Cao, “Ex-Google CEO Eric Schmidt Defends Tax Dodging, Monopoly in New Hardball Interview,” Observer, May 15, 2019, https://observer.com/2019/05/ex-google-ceo-eric-schmidt-defends-tax-dodging-monopoly-bbc-interview/; Eric Schmidt, interview by Max Bergami, “QuaranTalks 40: Eric Schmidt,”Bologna Business School, May 13, 2020, YouTube video, 50:34, https://youtu.be/FmS0XuzVmms.

  Many times, corporate tax avoidance schemes: John Christensen, email to Jack Corrigan, July 10, 2020.

  “Companies and capital migrate”: Shaxson, Treasure Islands, 16.

  But looking at the data, researchers estimate: Shaxson, “Tackling Tax Havens,” https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-global-tax-havens-shaxon.htm.

  The United States and European Union each lose: Niall McCarthy, “Tax Avoidance Costs the U.S. Nearly $200 Billion Every Year [Infographic],” Forbes, March 23, 2017, https://www.forbes.com/sites/niallmccarthy/2017/03/23/tax-avoidance-costs-the-u-s-nearly-200-billion-every-year-infographic/; Marcin Goclowski, “Tax Avoidance, Evasion Costs EU 170 Billion Euros a Year, Says Poland,” Reuters, January 22, 2020, https://www.reuters.com/article/us-davos-meeting-eu-tax-idUSKBN1ZL1H4; Shaxson, “Tackling Tax Havens,” https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-global-tax-havens-shaxon.htm.

  Developing countries in Latin America, South Asia, and Africa: Shane Darcy, “‘The Elephant in the Room’: Corporate Tax Avoidance & Business and Human Rights,” Business and Human Rights Journal 2, no. 1 (January 2017): 1–30, https://doi.org/10.1017/bhj.2016.23.

  developing countries in 2008 lost: Shaxson, Treasure Islands.

  In 2014, under heavy pressure from the EU: Sam Schechner, “Ireland to Close ‘Double Irish’ Tax Loophole,” Wall Street Journal, October 14, 2014, https://www.wsj.com/articles/ireland-to-close-double-irish-tax-loophole-1413295755; Toby Sterling, “Google to End ‘Double Irish, Dutch Sandwich’ Tax Scheme,” Reuters, December 31, 2019, https://www.reuters.com/article/us-google-taxes-netherlands-idUSKBN1YZ10Z.

  Italy and France both implemented: Eric Sylvers and Sam Schechner, “Italy Follows France in Levying a Digital Tax,” Wall Street Journal, December 24, 2019, https://www.wsj.com/articles/italy-follows-france-in-levying-a-digital-tax-11577209660.

  The two countries also launched tax fraud: Mark Scott, “Google Agrees to Pay Italy $334 Million in Back Taxes,” New York Times, May 4, 2017, https://www.nytimes.com/2017/05/04/technology/google-italy-tax.html; Romain Dillet, “Google to Pay $549 Million Fine and $510 Million in Back Taxes in France,” TechCrunch, September 12, 2019, http://social.techcrunch.com/2019/09/12/google-to-pay-549-million-fine-and-510-million-in-back-taxes-in-france/.

  The Netherlands also introduced: Isabel Gottlieb, “Dutch Closing Door on Popular Corporate Tax Breaks (Corrected),” Bloomberg Tax, September 18, 2019, https://news.bloombergtax.com/daily-tax-report-international/Netherlands-Closes-Door-on-Popular-Corporate-Tax-Breaks.

  When one Irish lawmaker: “Dáil Éireann debate—Thursday, 23 Nov 2017,” vol. 962, no. 2, Houses of the Oireachtas, https://www.oireachtas.ie/en/debates/debate/dail/2017-11-23/18/.

  For years, Apple saved billions: Charles Duhigg and David Kocieniewski, “How Apple Sidesteps Billions in Taxes,” New York Times, April 28, 2012, https://www.nytimes.com/2012/04/29/business/apples-tax-strategy-aims-at-low-tax-states-and-nations.html.

  Other offshore affiliates were so well disguised: Nelson D. Schwartz and Charles Duhigg, “Apple’s Web of Tax Shelters Saved It Billions, Panel Finds,” New York Times, May 20, 2013, https://www.nytimes.com/2013/05/21/business/apple-avoided-billions-in-taxes-congressional-panel-says.html; Ivana Kottasova, “How Apple Paid Just 0.005% Tax on Its Global Profits,” CNN Business, August 31, 2016, https://money.cnn.com/2016/08/30/technology/apple-tax-ruling-numbers/.

  After reaching out to lawyers: Simon Bowers, “Leaked Documents Expose Secret Tale of Apple’s Offshore Island Hop,” International Consortium of Investigative Journalists, November 6, 2019, https://www.icij.org/investigations/paradise-papers/apples-secret-offshore-island-hop-revealed-by-paradise-papers-leak-icij/; “Financial Secrecy Index 2020: Nar
rative Report on Jersey,” Tax Justice Network, February 18, 2020, https://fsi.taxjustice.net/PDF/Jersey.pdf.

  In late 2014, Apple had two: Bowers, “Leaked Documents Expose Secret Tale of Apple’s Offshore Island Hop,” https://www.icij.org/investigations/paradise-papers/apples-secret-offshore-island-hop-revealed-by-paradise-papers-leak-icij/.

  Upon organizing its corporate structure: Cole Frank, “Tax Avoidance and the Irish Balance of Payments,” Follow the Money (blog), Council on Foreign Relations, April 25, 2018, https://www.cfr.org/blog/tax-avoidance-and-irish-balance-payments.

  it is gaining popularity among companies: Emma Clancy, “Apple, Ireland and the New Green Jersey Tax Avoidance Technique,” Social Europe, July 4, 2018, https://www.socialeurope.eu/apple-ireland-and-the-new-green-jersey-tax-avoidance-technique.

  Fair Tax Mark estimated: The Silicon Six and Their $100 Billion Global Tax Gap (Fair Tax Mark, December 2019), https://fairtaxmark.net/wp-content/uploads/2019/12/Silicon-Six-Report-5-12-19.pdf.

  In 2017, the Institute on Taxation and Economic Policy: Richard Phillips, Matt Gardner, Alexandria Robins, and Michelle Surka, Offshore Shell Games 2017: The Use of Offshore Tax Havens by Fortune 500 Companies (U.S. PIRG Education Fund & the Institute on Taxation and Economic Policy, October 17, 2017), https://uspirgedfund.org/sites/pirg/files/reports/USP%20ShellGames%20Oct17%201.2.pdf.

  The European Commission launched an investigation: Foo Yun Chee, “IKEA to Face EU Order to Pay Dutch Back Taxes: Sources,” Reuters, October 7, 2019, https://www.reuters.com/article/us-eu-ikea-ab-taxavoidance-exclusive/ikea-to-face-eu-order-to-pay-dutch-back-taxes-sources-idUSKBN1WM0PP; Simon Hage, Martin Hesse, and Blaz Zgaga, “The Lure of Luxembourg: A Peek behind the VW Tax Haven Curtain,” Der Spiegel, October 28, 2017, https://www.spiegel.de/international/europe/volkswagen-relies-on-luxembourg-to-save-on-taxes-a-1175060.html.

  America’s largest banks and investment banks: Phillips, Gardner, Robins, and Surka, Offshore Shell Games 2017, https://uspirgedfund.org/sites/pirg/files/reports/USP%20ShellGames%20Oct17%201.2.pdf.