The tax-avoiding Facebook mogul and an act of charity that reeks of hypocrisy
Published by The Daily Mail (3rd December, 2015)
Once, it was enough to put a notice in the newspaper when your child was born. But Mark Zuckerberg, the multi-billionaire founder of Facebook, likes to do things differently.
So he welcomed his newborn daughter, Max, into the world with an open letter on his social media site, in which he and his wife, Priscilla Chan, pledged to donate almost all their £30 billion fortune to charity during their lives.
The happy couple talked rather smugly about how their first child gave them cause to reflect on the future, saying they were inspired by their desire to build a better world and because they have a ‘moral responsibility to all children in the next generation’.
Within hours, more than one million Facebook devotees demonstrated their ‘like’ of this noble gesture, among them the actor Arnold Schwarzenegger and Melinda Gates, wife of fellow mega-rich philanthropist Bill Gates.
There was, of course, an outpouring of praise — particularly online — for this latest plutocrat declaring his intention to hand over great wealth.
Zuckerberg, 31, is the most recent in a growing line of digital billionaires turning to charity, and their giveaways are almost always a public, rather than a private, event played out on social media.
He and his wife deserve credit, of course, for pledging to use their huge mountain of cash to help wider humanity rather than frittering it away on a life of fun.
Yet there is a dark side to this trend. For behind it lies the sanctimonious hypocrisy of billionaires who build vast fortunes with firms that avoid the taxes paid by the rest of society, then arrogantly think they are best placed to solve the planet’s problems.
Zuckerberg talked in his letter of creating stronger communities. Yet Facebook, like too many technology behemoths, is a serial tax avoider undermining government through its stubborn refusal to pay its fair share to society.
Last year, this all-conquering social media firm handed over just £4,327 in corporation tax in this country: less than the annual sum paid in tax by the average worker.
Yet its staff in Britain took home an average £210,000 each in pay and bonuses, safe in the security of a society that relies on public servants to protect them from terror, provide health care in hospitals and repair the roads on which they travel to work.
The Facebook founder has hailed Bill Gates as his hero — the world’s richest man, who has been revered as something close to a secular saint after promising to give away the bulk of his £57 billion fortune.
But Gates became rich from a company that was even used as a case study for a U.S. Senate inquiry into tax avoidance.
Microsoft was accused of avoiding paying £3 billion annually in tax by shifting earnings around between low-tax nations. In Britain alone, it reported £1.7 billion revenues in one year for online sales of software, on which it paid no corporation tax. Zilch.
Gates even has the gall to tour the world telling governments to take more and more money from taxpayers for his beloved foreign aid programmes, once even branding those who oppose such policies as ‘evil’.
However noble the intentions of Zuckerberg and Gates, it is pure hypocrisy to claim moral leadership while raking in immense wealth from companies engaged in such base tactics.
In one radio interview, Gates spoke of how philanthropists of the past such as the oil giant John D. Rockefeller offered a model for him and his generation of billionaires.
It was an interesting comparison, since Rockefeller, a ruthless monopolist, became the world’s richest man by using controversial practices such as collusion with railroad companies to crush his oil industry rivals — and then gave away $500 million to good causes.
He and other robber barons such as Andrew Carnegie, who built the U.S. steel industry in the 19th century, are among the most notorious examples of cut-throat capitalists who stop at nothing to build their fortunes, then seek in later life to improve their public image with good deeds.
Today, we see a new wave wearing chinos and T-shirts, building fortunes on grotesque foundations of grubby tax avoidance. Just like their predecessors in the 19th century, they then use their wealth to win public approval as philanthropists.
Larry Ellison, chairman of Californian technology giant Oracle, is the world’s ninth richest person. He has also promised to give away much of his money — yet his firm was among those attacked for ‘industrial scale’ tax avoidance by Parliament.
Google has a company motto proclaiming: ‘Don’t Be Evil.’ Yet far from being a paragon of virtue, a new tax designed by Chancellor George Osborne to discourage multi-national giants from diverting profits to avoid tax was named after the firm.
Needless to say, its billionaire chairman Eric Schmidt claims the company always aspires ‘to do the right thing’. And, of course, he has a family foundation devoted to solving ‘some of this century’s greatest challenges across the globe’.
It is laudable to see the super-rich devote themselves to good works and give away big sums for the betterment of others. Many of these people are technological visionaries, creating fortunes though their energetic entrepreneurship.
Yet too many of them seem to think it is acceptable for their companies to avoid paying taxes, in part because they see themselves as wonderful benefactors engaged in personal crusades to solve the world’s problems.
In effect, they are saying the super-rich have the right to ‘self-tax’ themselves by giving away money to pet causes, rather than the companies with which they made their fortunes paying their fair share of tax to governments, like the rest of us.
However much good they achieve, this is not just breathtakingly arrogant, but profoundly undemocratic. And for all their skills and smartness, they are often no better than governments at tackling problems in public services.
Zuckerberg went on Oprah Winfrey’s TV show five years ago to proclaim a $100 million gift to turn schools in the New Jersey town of Newark ‘into a symbol of educational excellence for the whole nation’.
The donation was doubled with matching funds from others. Yet his controversial scheme failed to meet its goals after blowing $20 million on consultants, and running into opposition from parents, teachers and community leaders.
But American multi-millionaire financier Foster Friess actually praised this arrogance of the super-rich when defending the idea of ‘self-tax’ in an interview. ‘It’s that top 1 per cent which probably contributes more to making the world a better place than the 99 per cent.’
He even argued that governments should pay digital gurus for their contributions to society, rather than taxing them personally. ‘I’ve never seen any poor people do what Bill Gates has done,’ he added.
The harsh truth is that the likes of Zuckerberg and Gates may be philanthropists, but they built those fortunes off the back of companies engaged in massive tax avoidance. Such corporate strategy weakens society while placing heavier burdens on the rest of us.
It is all too easy in our globalised age for corporate giants to exploit tax loopholes and outwit inadequate politicians by paying the best advisers to shuffle paper profits around the planet.
So by all means praise a plutocrat such as Mr Zuckerberg for promising to give away extraordinary wealth. We must hope the money is put to good use to transform lives.
But at the same time, do not be deluded by the self- proclaimed altruism promoted so publicly by these titans of the technology revolution.