I don’t know if Corbyn’s speech is just an eye-catcher or whether it intends to have substance if he should get into power, but it’s not simple to apply a windfall tax to ‘Big Tech’.
James O Malley at Gizmodo writes:
What Corbyn is pitching here is a “windfall tax” — a tax on companies that post excessive profits. This isn’t completely unheard of — such a tax was introduced on the companies running privatised utilities by the evil, neoliberal Tony Blair, in 1997. Since the 2008 financial crisis, it has been regularly proposed as a solution to what to do about the bankers’ bonuses.
But can this translate to Big Tech? The immediate problem as far as I can tell is… it isn’t actually very easy to define which companies count as a “digital monopoly”.
And therein lies a big problem, which James illustrates further with:
Amazon is a tech company… but it is also a retailer. Facebook is a tech company, but is also a communications company. Twitter is a tech company, but it is also a pit of despair.
To really illustrate the definitions problem, think of a traditional company like, say, Argos. Argos is a traditional retailer, but over the past decade has clearly digitised much of its business, from the ordering process (go into a store today and you’ll find iPads instead of tiny pens), to the supply chain (same day delivery). Because it bought some computers… does Argos count as a tech company now?
I don’t think Corbyn’s idea is as easy to implement as he thinks.
As a related aside, I can’t see how adding more tax laws creates anything but opportunities for the tax avoiders. Tax laws are ludicrously long-winded and complicated and thus offer many loopholes. Somebody needs to throw it all away, start again and create simple, explicitly-defined tax laws and then give the courts clear direction about how to interpret them (although if the laws are simple enough that should be self evident).
Alas, like the long-overdue overhaul of the NHS that’s needed, I can’t imagine many governments having the stomach to tackle tax laws from the ground up.