back to article Bill Gates: Corporate tax is not a moral issue

Microsoft founder Bill Gates says he gladly paid a whopping $6bn in personal tax, but added that he reckons corporate tax is a legal issue and not a matter of morality. Gates spent 14 hours in Australia on Tuesday suggesting to Australian politicians that they devote more of the nation's budget to foreign aid. He gave several …

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  1. btrower

    Bill is right this time.

    People running corporations have a *duty* to maximize shareholder value. To the extent that they do not, the corporation's viability is affected. Corporations that are reckless enough to take shareholder money and send it away unnecessarily are ultimately doomed. They will be out-competed by corporations that behave more rationally.

    For many years I have called corporations 'evil robots' because in my opinion that is what they are. More to the point, as currently laws are structured, that is what they *must* be if they are to survive.

    I do not think that corporations should be able to come close to the excesses we currently allow. However, the solution is, as Bill Gates has said, to change the rules. Unless you level the playing field, you guarantee that only the most ruthless of corporations will survive. I have, as I write this, in mind a particular Biotech company that sets an astonishing standard for corporate Evil.

    Like government, we get the corporations we deserve. If we set up rules to allow non-human entities to ride roughshod over human beings, guess what happens?

    1. P. Lee

      Re: Bill is right this time.

      Forget corporate law, there's no particular reason to return more than what the law requires of personal income either. Giving to the state is not a moral issue and corporations are just legal fiction - they can't have morals.

      Corporation profit is just a convenient and efficient place to identify and collect tax - at least it was.

      One way to put a damper on things would be to only allow one set of books. Stop allowing companies to tell the tax office one thing and shareholders another.

      Then you could deal with IP - all payments sent abroad for the use of IP will be credited as profit on imported units in which that IP is used, pro-rata.

      It's late and I may not be thinking straight.

      There is, of course, a moral obligation on people to help those in need.

    2. Anonymous Coward
      Anonymous Coward

      Re: Bill is right this time.

      "People running corporations have a *duty* to maximize shareholder value. To the extent that they do not, the corporation's viability is affected. Corporations that are reckless enough to take shareholder money and send it away unnecessarily are ultimately doomed. They will be out-competed by corporations that behave more rationally."

      And this is the problem, no one knows what SHAME is anymore, or they don't care!

      Everyone/corp have a DUTY to pay the tax due of them and not weasel their way out of it!

      Avoiding your responsibilities makes you a "Jeremy Kyle" dad and shame and scorn should be piled onto them. Tax the corporation then TAX TAX TAX the shareholders.

      People should shut up and pay up or be thrown in the nick.

      1. Anonymous Coward
        Anonymous Coward

        @Obviously

        And this is the problem, no one knows what SHAME is anymore, or they don't care!

        You mean like those politicians who will easily organize a going away party for 100 people, estimated costs are approximately E75.000,-, even when the country they claim to be serving is in a very rough financial climate, to such an extend that taxes had to be raised and government spendings (where it matters of course) had to be cut.

        Because that is the other side of the medal; people need to pay taxes but also see that taxpayer money wasted and thrown away as if it was nothing.

        This isn't saying I don't agree with you perse, but it works both ways.

      2. sisk

        Re: Bill is right this time.

        And this is the problem, no one knows what SHAME is anymore, or they don't care!

        Everyone/corp have a DUTY to pay the tax due of them and not weasel their way out of it!

        I don't think I'd call paying the taxes required by law and not one penny more 'weaseling' their way out of taxes, and that's what Bill is talking about. If nations are so concerned about big multinationals using legal loopholes to pay lower tax rates then those nations need to close those loopholes, end of story. You can't craft your tax law so that it allows corporations to pay less taxes and then complain when they use it.

        The US is a perfect example of this. We have all sorts of tax loopholes intentionally put it place so that the business owners in Congress and their cronies can pay less taxes, but whenever some company without Congressional connections use those same loopholes they get hauled before the Senate to explain why they're using those perfectly legal loopholes, as Google was recently. Schmidt did the right thing telling them off. If you don't like company's using the loopholes you set up to pay less taxes then you need to close those loopholes.

        1. James Micallef Silver badge
          Unhappy

          Re: Bill is right this time.

          @sisk - "If nations are so concerned about big multinationals using legal loopholes to pay lower tax rates then those nations need to close those loopholes, end of story"

          You're right of course, there's just 1 more detail to consider. Legislators who introduce legislation to remove loopholes and catch more of corporate profit in the tax net will see their campaign funding dwindle as the multinationals redirect their campaign contribitions / *cough* bribes *cough* towards those legislators who will vote for the tax loopholes that they desire, and against tax reforms that will negatively affect their bottom lines.

          Of course not all legislators are thusly influenced, not all companies give campaign contributions based only on that etc etc... but the net effect in the long run is the current mess

          1. mmeier

            Re: Bill is right this time.

            Not all nations follow the US model of "pay your campaign". Most (West)European countries have a finance system and access to TV time during elections "for free". So they are less restricted there (in theorie)

            This sometimes is abused by "4.95 percent" parties in germany - you get money based on the percentage/number of votes as soon as you go over IIRC 0.5 percent and you do not have to work unless you get 5 percent (or 3 direct mandates).

        2. Ian Yates
          Devil

          Re: Bill is right this time.

          "You can't craft your tax law so that it allows corporations to pay less taxes and then complain when they use it."

          The problem isn't that simple. Tax laws start simple and become a convoluted mess in an attempt to encourage foreign business.

          Say, McBurger comes to the UK but is based in the US and complains that they're paying tax on what they sell in the UK and their profit in the US. They see this as unfair (rightly so), so the government (on both ends) agree to change the tax rules to be fairer to how the company operates across borders. This works great until some shrewd/immoral/cunning/evil (delete as applicable) accountant realises that there is a way to misdeclare or offset the money taken in one region in order to pay less tax.

          As the rules around how companies operate across borders expands to cover other scenarios, the number of loopholes increases. (As a developer, I want to say "due to poor unit testing")

          Take a look at how Starbucks reduced their tax bill by renting their UK property from a foreign company (themselves) based in a country with lower tax. Perfectly legal, but clearly not what the system was designed for.

        3. TheOtherHobbes

          Re: Bill is right this time.

          "If nations are so concerned about big multinationals using legal loopholes to pay lower tax rates then those nations need to close those loopholes, end of story."

          No, the story *starts* with an entire economic establishment - q.v. the Chicago School and the Austrians - which was created deliberately and knowingly as a propaganda exercise to promote the idea that corporate taxation is bad, public spending is bad, and tax should be as low as possible for rich people because they 'create jobs', etc.

          Basically everything in mainstream economics and corporate policy is a tissue of lies and nonsense. None of it works the way it's claimed to work, and all of it is socially and economically corrosive and destructive. You can see the results by looking at Greece and Cyprus.

          So what do you do when governments can't change the rules, because they're ideologically unable to imagine better rules, and institutionally corrupted by revolving door appointments that move the same people into and out of corporate upper management and politics + the civil service?

          If you can answer that question in a practical make-a-real-difference kind of a way, we can have democracy and real prosperity back again.

        4. JEDIDIAH
          Devil

          Re: Bill is right this time.

          > I don't think I'd call paying the taxes required by law and not one penny more 'weaseling' their way out of taxes,

          Except this is about shuffling money around bogus corporate entities in order to gain the most favorable status possible. For most people this seems inherently unfair because most of us aren't in a position to do this. This includes a good number of small businesses to. Although governments that set themselves up as havens for tax scofflaws deserve just as much derision as the megacorps that exploit them.

      3. Anomalous Cowshed

        Re: Bill is right this time.

        "People should shut up and pay up or be thrown in the nick."

        I don't know why but this comment reminds me of the old bearded convict in Life of Brian, who has just been turned the right way up after 20 years by his Roman jailers and who is full of praise for the Roman race.

      4. Roland6 Silver badge

        Re: Bill is right this time. @Obviously! 28May 14:02

        "Everyone/corp have a DUTY to pay the tax due of them and not weasel their way out of it!"

        And just what exactly is the tax due of them?...

        I think you'll find that all the companies being investigated in the UK, US and EU do pay the tax due of them - as defined by the various national laws.

        Likewise the many contractors who pay themselves small salaries and large dividends...

        In my opinion it is an anomaly that a company's annual accounts give no real information on the taxes actually paid. Given the current debate it would be interesting to see a full breakdown of taxes paid (eg. VAT, NI, PAYE, Corp tax etc.).

      5. Anonymous Coward
        Thumb Up

        Re: Bill is right this time.

        Obviously!: "People should shut up and pay up or be thrown in the nick."

        I really don't disagree with you, I really don't, but have you ever asked yourself....Pay up for what? Also, is it really that they should pay up on the taxes, or stop hoarding the money and put it back into the countries economy?

        Our (U.S.A.) EMT services seem strong. When a tornado or hurricane hits, there is help and obvious attention. Police forces seem to be everywhere, it seems hard not to see a cop on a daily basis. As far as the firefighters go, well I'm not sure why there is so many volunteer units, but they all seem to do a great job. Our healthcare isn't outrageous, and it surely will remain privatized for the majority no matter what laws come.

        I don't disagree that companies should "Pay up", I just feel they should do it directly with return investments and jobs, but sadly, they almost never do. Now, would companies paying more to the government benefit anything? Do we need to give even more military equipment away (fighter jets, tanks, basically anything) to foreign countries and give them training on operations as well? Our government gives away billions already, and puts not so much back in. So would more money in the hands of our current government do great things, or just further proportional spending down the wrong path?

        What our government could do (very ballsy though), is to force companies to put the money directly back in the U.S.A. economy, here land side, instead of hoarding it and filtering it internationally. That way our fumbling government can't waste it away, and companies can create new jobs and investments. However, sitting here right now, it looks like the fumbling and hoarding will continue as normal. S.N.A.F.U.

    3. NomNomNom

      Re: Bill is right this time.

      Similarly every parent has a duty to squeeze as many benefits out of the welfare system as they can.

      1. Anonymous Coward
        Anonymous Coward

        Re: Bill is right this time.

        "Similarly every parent has a duty to squeeze as many benefits out of the welfare system as they can."

        Kind of get the sentiment - but one is taking more than you need from the collective pot, the other is giving extra to it.

        Company A makes widgets and pays 100% of their tax

        Company B makes widgets and pays 120% of their tax

        Which one is going to expand and survive, and which is going to get bought out by the other at best.

        1. David Hicks
          Thumb Down

          Re: Bill is right this time.

          It's more like -

          Company A pays 100% of the assessed tax on their profits in country A because they're based with country A.

          Company B pays 2% to various accountants and 10% to country B, even though the profits were generated in country A.

          Firstly this skews the market in favour of incumbent multinationals and away from competitive local business, and secondly it effectively puts the tax rates on individuals in country A up as the government is denied funds from business.

          1. Neil Wilson

            Re: Bill is right this time.

            Except that government in most of the world doesn't need funds.

            It's that misconception that causes most of the problem. The causality is actually the other way around - government spending creates the liquidity with which taxes are paid. Government spending is actually limited by the amount of free stuff and resources its currency can command.

            Taxation is a distributional issue. It is unfair that Company A pays less than Company B all other things being equal.

            But it has no effect of the ability of government to do stuff - however much the politicians spin the line that it does.

          2. Anonymous Coward
            Anonymous Coward

            Re: Bill is right this time.

            It's more like -

            Company A pays 100% of the assessed tax on their profits in country A because they're based with country A.

            Company B pays 2% to various accountants and 10% to country B, even though the profits were generated in country A.

            Firstly this skews the market in favour of incumbent multinationals and away from competitive local business, and secondly it effectively puts the tax rates on individuals in country A up as the government is denied funds from business.

            Absolutely, David.

            Adam Smith would be turning in his grave at this (although of course the twats down at the Adam Smith Institute like to pretend otherwise).

          3. John 62

            Re: Bill is right this time.

            This is why the UK loaned loads of money to Ireland. George Osborne might be losing money to Ireland in corporation tax, but Ireland has to pay something like 5 or 6 percent interest on the 6bn or so the UK lent them.

        2. Tom 13

          Re: Company A and Company B

          Insufficient information to answer the question. If Company B makes $1 billion in profits and Company A makes $1 million in profits, I'm guessing it would be Company B. Which might not help Company A's financials.

    4. ecofeco Silver badge
      Holmes

      Re: Bill is right this time.

      The government didn't create those laws. The corporations did.

      Never forget this.

      1. Alan Esworthy
        Thumb Down

        Re: Bill is right this time.

        @ecofeco - "The government didn't create those laws. The corporations did. Never forget this"

        You state that as though there were a clear distinction. There isn't. Never forget this.

      2. ecofeco Silver badge
        Pirate

        Re: Bill is right this time.

        4 thumbs down?

        Did I strike a nerve?

        And yes, the American gov/corps is hardly distinguishable from textbook fascism these days.

    5. relpy

      Re: Bill is right this time.

      "People running corporations have a *duty* to maximize shareholder value."

      I agree entirely, the issue is not the companies behaviour but the rules they are requried to obey, but...

      How exactly do they justify the ridiculous salaries that they take for their board members and certain "key" staff (traders for example) when all the available evidence suggests that after a certain point (usually cited as about 20 times the average salary) inflated wages are in no way linked to increased performance?

      1. mmeier

        Re: Bill is right this time.

        Well, someone obviously thinks they ARE worth the money. Because unless you are the sole owner of the company someone else writes your contract and paycheck. Maybe they are really good negotiators, maybe they have certain skills in a crisis

        And if people get payed by performance - most politicians would be on Dole

    6. JEDIDIAH
      Mushroom

      Re: Bill is right this time.

      > People running corporations have a *duty* to maximize shareholder value.

      This is a grand excuse for all sorts of anti-social nonsense.

  2. David Hicks
    FAIL

    But they are required

    The companies are just finding ways to transfer-price their way around it. It's not like the UK tax system was specifically set up with this in mind, it's one of multiple work-arounds.

    I agree utterly that the law should be changed, but bleating about how it's not a required amount because that's the way the system was set up to work is more than a touch disingenuous.

    1. Jason Hindle

      Re: But they are required

      Hardly. What the likes of Google and Apple are doing is still (apparently) legal. Only government can make it illegal, and this can only be achieved through better international tax agreements. The politicians can moralise all they want, but unless they show a little backbone, and stand up for the rule of law, through legislation, then all they are doing is surrendering their own legitimacy to the very corporations they criticise.

      1. David Hicks
        Stop

        Re: But they are required

        Nobody is saying that it's illegal (possible exception of the Google sales taking place exclusively in Ireland, which may be iffy).

        But I'm saying its entirely disingenuous for the likes of Bill Gates and Eric Schmidt to say they're playing by the rules and paying a fair amount when the companies structure themselves and do all sorts of financial acrobatics specifically to avoid paying the amount they would usually be assessed.

        Bill even says "This is not a morality thing, this is about the law,” he said. If nations set new tax levels “companies will be happy to comply", which is rubbish*. They use loopholes in international law to avoid paying tax in the places they do business.

        So again - the solution absolutely is to change the law, but that doesn't change the fact that these statements are disingenuous.

        (*hint, what's missing is "and we can't find a way to weasel out of it")

        1. ACx

          Re: But they are required

          Oh please. Loop holes exist because governments leave them there, if not put them there in the first place. What is a tax incentive if its not a loop hole?

          The real issues is that nations do not co-operate, but compete for business using taxes. Ireland attracts business because of its tax regime. Trust me, its not the weather. Any why invest in the UK and not say Germany? What incentive can we give? UKIP? The Channel? The great UK customer service? The apparently poorly educated population who the government says have been doing dumbed down qualifications for the last 20 years?

          If people want this sorted, all nations must have identical tax regimes, which could begin to be achieved by a *more* integrated EU. Heh, like this country would like that.

          Still waiting to know why its great news that the Star Wars films will be filmed in the UK in no small part due to a tax deal.

          This entire debate is a disingenuous politically motivated joke.

          1. Anonymous Coward
            Anonymous Coward

            Re: But they are required

            In the case of the Star Wars film this was a deliberate policy by the UK government. The jobs created, the employment retained and taxes will ensure a lot of income.

            If the makers of Star Wars made the film here but then claimed everyone was actually doing the work in Ireland then that's obviously a lie and that's the sort of trick Google and others are pulling.

            1. Yet Another Anonymous coward Silver badge

              Re: But they are required

              >If the makers of Star Wars made the film here but then claimed everyone was actually doing the work in Ireland then that's obviously a lie and that's the sort of trick Google and others are pulling.

              That's almost what they did - Star Wars still hasn't made a profit, so some of the English actors involved still haven't received any royalties

              1. Richard Wharram

                Re: But they are required

                Ah yes, Hollywood accounting. Legendary stuff :)

                Tip, everything must be negotiated off gross because there will never be a net. By design.

          2. Dog Faced Boy

            What incentive can we give?

            The incentive is that they can still profit from the populace, just not as much. Take Starbucks, if they were forced to cease all operations in the UK unless they paid their full tax, rather than use loopholes for tax avoidance, do you think Starbucks would allow all there stores to be closed when there is still a profit to be made?

            Probably not, I am sure they would comply. If on the other hand they refused to pay the proper amount of tax and were happy for their stores to close, then this service would be provided by UK businesses, from entrepreneurs to large businesses, as it is a commercially viable service.

      2. h3

        Re: But they are required

        The thing is in some ways things are working like the EU was set up to work.

        There is certain things that you have to allow as one of the main points of the EU.

        But somehow they can stop tobacco and booze being ordered from the EU. (Perhaps the EU has agreed to ignore it in that instance but it is still illegal if you pay the tax in the country of origin).

        Still think legalising all drugs and taxing them in such a way as to make it very difficult for organised crime to compete would solve most budgetary problems overnight. Could make an obscene amount take nearly all the black market money.

        1. bailey86

          Re: But they are required

          Angered RE legalising all drugs. Huge tax income, huge savings on military expenditure spent on the futile war on drugs.

          Of course, the arms companies want the war on drugs to continue - but there's always hope - just see washington state.

          1. bailey86

            Re: But they are required

            Should be agreed not Angered!

      3. The Nazz

        Re: But they are required

        The UK government can't have it both ways though.

        On the one hand, they say we are now an IP economy ( ie we have little left to sell) and that IP has considerable value.

        On the other, government taxes are hammered when others also recognise the high "value" of IP, especially when they ship that value out to low or non-existent tax economies.

      4. Neil Wilson

        Re: But they are required

        Those who payeth piper calleth tune.

        Unfortunately we get the political class we are prepared to pay for. And since we are not prepared to pay them, somebody else has.

  3. This post has been deleted by a moderator

    1. Anonymous Coward
      Anonymous Coward

      Re: Bill Gates knows nothing about morality

      >I look forward to urinating on his grave someday.

      Then don't be surprised when someone shits all over yours.

      1. JEDIDIAH
        Devil

        Re: Bill Gates knows nothing about morality

        > Then don't be surprised when someone shits all over yours.

        I'm sure you didn't intend it but you basically just declared him a person of significance.

    2. David Hicks
      WTF?

      Re: Bill Gates knows nothing about morality

      War criminal, WTF??

    3. sabroni Silver badge

      Re: As the single biggest war criminal of all time

      No. He isn't.

    4. Uffish

      Re: single biggest war criminal of all time etc.

      @ IGnatius T Foobar - Consider my right eyebrow to be raised a tad.

      1. jason 7
        Facepalm

        Re: single biggest war criminal of all time etc.

        Maybe this is you know who's new alter-ego?

        I really do wish sometimes I could see what these people actually look like and where they live.

        I'm sure many of them live in medical institutions.

    5. dogged

      Re: Bill Gates knows nothing about morality

      Eadon, is that you?

      1. Anonymous Coward
        Anonymous Coward

        Re: Bill Gates knows nothing about morality

        Must be Eadong since he's posted something that doesn't make sense.

    6. Anonymous Coward
      Anonymous Coward

      Re: Bill Gates knows nothing about morality

      "As the single biggest war criminal of all time ..."

      Really? REALLY? Looking at your past posts as well as this one, you seem prone to hyperbole and irrationality. A winning combination. <slow applause>. Still, keep posting - it's half term so you've plenty of time to try for a badge :)

    7. Richard Wharram
      WTF?

      Re: Bill Gates knows nothing about morality

      War criminal?

      Is this trolling or did I miss Bill Gates' time in the Khmer Rouge?

      1. Richard Wharram

        Re: Bill Gates knows nothing about morality

        Oooh. We've all collected a downvote for our puzzlement.

        Here you, gimme another.

  4. Anonymous Coward 101

    The problem is that a national tax system that couldn't be gamed would cause investment drift to those nations that had tax systems that could be gamed.

    For example, if a UK government introduced a way to stop Google booking sales profits in Ireland that were actually made in London, Google would leave the UK for somewhere else.

    1. David Hicks
      Facepalm

      Yes, clearly, if they have to pay a reasonable tax rate then they'll leave the lucrative UK market permanently!

      I often wonder if people think at all before they type.

    2. Anonymous Coward
      Anonymous Coward

      Who cares if they left the UK? London would lose a few thousand jobs, big deal. UK IT researchers are valued quite a bit. Hence Microsoft's research HQ in Cambridge.

      It would be quite funny if they did leave given how much they've spent on their Kings Cross HQ.

    3. nuked

      Hmm. Of course. They would simply block a G8 country's access to Google because they had to give away slightly more of their profits made in the same country.

    4. Dan 55 Silver badge
      Black Helicopters

      This is why several western countries are getting stroppy in public about certain multinationals even though the problem is with their own tax systems which they know full well how they work. Politicians are probably just as guilty as multinationals over creatively avoiding taxes.

      None of this public debate is for the benefit of the public. When every country's had its inquiry and they're all sure they're all going to do the same thing at the same time, that's when there'll finally be a change in all of their tax systems.

  5. Ally 1

    These megacorps spend half their time lobbying governments for tax breaks, reductions and law changes. Then they turn round and blame governments for the tax laws.

    The government gets the tax companies who work for these corporation in to consult on new laws..while at the same time letting these tax giants know the loopholes before to "add value" to their services.

    The whole thing is a sham

    1. ecofeco Silver badge

      Exactly Ally 1.

      The gov is used as the straw man/whipping boy/ scapegoat.

    2. Anonymous Coward
      Anonymous Coward

      Actually, in some cases, it's because the don't do it enough.

      http://www.opensecrets.org/lobby/clientsum.php?id=D000022008&year=2013 - Google

      http://www.opensecrets.org/lobby/clientsum.php?id=D000021754&year=2013 - Apple

      http://www.opensecrets.org/lobby/clientsum.php?id=D000000115&year=2013 - Microsoft

      FTR - Google are out-spending Apple around 10:1 and Microsoft around 2:1. I'd add that if they do it with government, they'll do it with the press. Make of that what you will...

  6. peyton?
    Flame

    I don't buy it

    “It is not incumbent on those companies to take shareholder money and pay huge amounts that are not required.”

    So the solution to situations like Foxconn (with their human rights abuse record) is not to improve the situation of those people - since that probably is going to cost money - but to find a better location with with more relaxed laws, where the people can be more easily exploited for less.

    Is this really what the founder of the Bill and Melinda Gates foundation is suggesting?

    1. Steve Knox
      Holmes

      Re: I don't buy it

      Is this really what the founder of the Bill and Melinda Gates foundation is suggesting?

      No. Now if you're finished playing with your straw man, put him away and go get ready for dinner.

      What he's suggesting is that companies are amoral entities, and as such, any social requirement for ethical behavior on their part has to be implemented via external regulation, because there is no internal drive for such behavior.

      What is sad is that he even has to mention this. It's capitalism 101 -- every adult in a capitalist society should already know this.

      1. David Hicks
        FAIL

        Re: I don't buy it

        It's not a strawman if you then go on to confirm it by saying that companies are amoral entities.

        Companies do not need to be amoral. Human beings work inside companies, not magical robots, and we absolutely can blame them for making amoral or immoral decisions.

        1. Anonymous Coward
          Stop

          Re: I don't buy it

          > Human beings work inside companies, not magical robots,

          The vast majority of these corporations are so large that they cannot have a moral focus.

          Each person working for it has such a narrow view of the corporate identity that they don't have a moral influence on it whatsoever. Even board members only contribute to one part of the picture.

          I fear you are confusing the morality of the corner shop because it is run by a single guy: the morality of the shop is a reflection of the morality of the owner.

          Saying that Google or Amazon has a morality is like saying an ants nests has morality. It makes no sense.

          1. David Hicks

            Re: I don't buy it

            "Saying that Google or Amazon has a morality is like saying an ants nests has morality. It makes no sense."

            Are you trying to tell me there's nobody in google that has a decent overview of their finance and tax situation?

            Why, they must have no idea of whether they're making any money or not, it's chaos! They won't last long that way!

            (In other words BULLSHIT, of course the country level CFOs, accountants etc know what's going on and set the policies)

        2. mmeier

          Re: I don't buy it

          Companies must be profitable otherwise they die. So they can not afford "moral" because that would kill them and has already killed a few. Chinas companies do not care about people or environment - and have already put quite a few western companies out of business (Solar industrie, coal mining, Shipbuilding is next)

          Companies must follow the laws, that is all. The lawmakers must take moral into consideration - and then dampen it down with a healthy dose of "Realpolitik"

      2. peyton?

        Re: I don't buy it

        "any social requirement for ethical behavior on their part has to be implemented via external regulation"

        He doesn't say this. He says they have to comply with local laws. My example of Foxconn, et al, demonstrates a scenario where American companies put pressure on their suppliers to improve the status quo *not* in response to any local law, but to public outcry. There is no law that says a company has to be ruthless to create shareholder value. (btw, lots of companies have ethics policies in place that go above and beyond the bare that is required by law.)

        My point is that Gates and the rest seem to feel they get a free pass to exploit the government because, well, it's the government and nobody likes them. They would never make the same claims about exploiting human victims (i.e., if you don't like it, change the law). But money going to the government does potentially help people. Just because they've been abstracted and made faceless doesn't give corporations a free pass in my book.

        ps. no need to be a dick in your replies

  7. batfastad
    Megaphone

    Morally repugnant

    Since when is it the job of politicians to cast moral judgements? Never. The mere fact that they appear to think that they are in a position of moral superiority to pass such judgements is pretty appalling. By definition politicians cannot be morally superior to anyone or anything.

    What is morally repugnant is acknowledging a problem has existed for so long, attempting to shift the blame onto others, attempting to guilt-trip companies and individuals to pay more than they are legally obliged to in tax, whilst paying the minimum amount of tax themselves, and failing to change the rules that they are responsible for.

    If the rules are really complicated and difficult to change, then just say so. Don't just sit there for years and constantly whinge about companies that don't appear to be breaking any rules.

    "Politicians are not born. They are excreted."

    - Marcus Tullius Cicero

    1. Bronek Kozicki
      Thumb Up

      Re: Morally repugnant

      Brilliant.

    2. CaptainHook
      Stop

      Re: Morally repugnant

      "Since when is it the job of politicians to cast moral judgements? Never."

      ******

      Why was the slave trade abolished if not as part of a moral judgement by MPs? Or enabling women to vote?

      Politicians are always making moral judgements and then enacting laws to force those judgements on people, it's basically what their job is, after all we have a civil service to actually run the country.

      I'm not saying the moral judgement is always right, for example Iain Duncan Smith seems to have an amazing talent for always ending on up on the wrong side of a moral argument, but pushing through laws which back up his own twisted ideology, but to say it's not the job of a politician to make moral judgements seems to miss a huge part of their job description.

  8. All names Taken
    Unhappy

    <Polite applause>

    On the other hand what are politicians trying to do with this tax by intimidation stuff?

    It looks as if (UK) politicians seek to harm the business model some corporations are using in the UK.

    Meld that with an almost fascist preoccupation with political powers and it seems UK MPs have gone into fascist mode (note to MPs: wake up - this is a democracy)

    Strange melodrama all the same with much pondering about why it is getting so much media attention

    1. The Nazz

      Re: <Polite applause>

      On the other hand what are politicians trying to do with this tax by intimidation stuff?

      Award themselves a f***ing huge and utterly undeserved pay rise.

      Not to replace those excessive expense claims they can no longer make, oh noes.

    2. JonP

      Re: <Polite applause>

      "On the other hand what are politicians trying to do with this tax by intimidation stuff?"

      Because they know they can't change the law without screwing the economy. This is plan B.

  9. Anonymous Coward
    Anonymous Coward

    Claiming something is legal is never a good justification

    Try telling your employer that you were off your face on some "legal high" at the weekend and see what they say to you.

    There are things that are legal which aren't exactly acceptable to most people.

  10. Crisp

    Corporate tax is not a moral issue

    Oh it so is! Just because it's a corporation and not a person doing it, doesn't absolve the corporation (and the people that make up that corporation) of their moral duty.

    1. BoldMan

      Re: Corporate tax is not a moral issue

      Total bollocks - a company has a legal obligation to maximise its profits for the benefit of shareholders. This means a company is obliged to game the tax system because if they didn't the shareholders could sue them for not providing the best shareholder value!

      If the tax laws allow gaming, its a the tax authoritiy's responsibility to FIX the tax laws, not the company's duty to pay more than they legally need to.

      1. Yet Another Anonymous coward Silver badge

        Re: Corporate tax is not a moral issue

        So by the same token, if it was cheaper to pay the fines they should remove any safety procedures?

        Redundancy payments were very expensive so we sent all the managers on a training course to the arctic on a Liberian freighter - the freighter met the minimum Liberian safety requirements and it's not our fault that it sank.

        1. All names Taken
          Alien

          Re: Corporate tax is not a moral issue

          I~ don't know about other nations but a cost-benefit analysis probably underlies every spend of public dosh in the UK.

          Yes, that includes armoured kit for squadies in combat zones, cost-benefit analysis to establish that it is cheaper to use surface based transport than air transport in some war zones.

          On a less contentious area:

          cost of repairing UK roads and highways = many billions or earthling pounds

          compared to

          cost of meeting road accident claims of not repairing quite as many UK roads and highways = not quite as much earthling pounds

          Therefore: don't repair the smaller A and B roads, estate roads and contest any accidents caused by potholes?

          How many potholes are in the roads near where you live?

        2. mmeier

          Re: Corporate tax is not a moral issue

          Actually that is what killed west european coal mining - the Chinese do not care if three and four digit numbers of miners die each year, tens of thousands of coal burn up and pollute the environment of the country looks like Mars when they are done. So they are extremly cheap in money.

          Do not get me wrong I think the high security standards and good environmental once are a MUST! But if we want the jobs(1) than the lawmakers must make sure the companies can compete. If you want the security - put a fee on non-EU imports based on stuff like

          + Difference in pollution / environmental protection

          + Difference in work safty costs (percentage NOT total)

          + Difference in money earned for the worker

          If you do not do that - say good buy to a few ten thousand "manual labor" jobs(2)

          (1) And those where decend paying jobs for the less "intellectually inclined" people

          (2) Not that mining is "manual labor" - there is a lot of maschinery involved

        3. Neil Wilson

          Re: Corporate tax is not a moral issue

          That's exactly how transport economics works. They don't fix road junctions on the off chance. They wait until the economic return of the casualties and potential casualties makes it worth the money spent.

          Taxation is best if it avoids morality. Just make the system simple so Joe Plumber can work it out on the back of his fag packet.

          Leave it to levies and duty to punish 'bad behaviour' and correct for negative externalities.

  11. Anonymous Coward
    Anonymous Coward

    "The problem is that a national tax system that couldn't be gamed would cause investment drift to those nations that had tax systems that could be gamed.

    For example, if a UK government introduced a way to stop Google booking sales profits in Ireland that were actually made in London, Google would leave the UK for somewhere else."

    Easy solution - if you don't pay tax in our country, you can't trade in our country!

    Simple as that.

    It doesn't matter what you say, no business will give up the honey pot that is the UK and will pay their share or see their competitors grab all of the UK business and wipe them out.

    Problem is, no one has teh bollocks to do anything because our politicians are the largest shareholders in these coporations and wouldn't risk their nest eggs. The same nest eggs gained by denying your 84 grandmother a hip replacement.

    1. BoldMan

      Thats exactly what needs to be done - along with fixing the tax loopholes in the first place.

    2. This post has been deleted by its author

  12. Anonymous Coward
    Thumb Down

    We're in trouble...

    if we ever find ourselves looking to Bill Gates for moral guidance.

    1. Dr_N Silver badge
      Thumb Down

      Re: We're in trouble...

      Just take some time to look at what his foundation is achieving, then jump off your high horse.

      1. Anonymous Coward
        FAIL

        Re: We're in trouble...

        Just take some time to look at what his foundation is achieving, then jump off your high horse.

        But it's not his money he's giving away. It's the squillions he made by arm twisting manufacturers into making you buy yet another copy of Windows every time you bought a Wintel computer.

        It's your money he's giving away.

        Saint Bill, my arse.

      2. Yet Another Anonymous coward Silver badge

        Re: We're in trouble...

        >Just take some time to look at what his foundation is achieving, then jump off your high horse.

        Money which was 'earned' by running a monopoly that invented a lot of these tax scams.

      3. Anonymous Coward
        Anonymous Coward

        Re: We're in trouble...

        "Just take some time to look at what his foundation is achieving, then jump off your high horse."

        Yeah, I looked and what his foundation is achieving is buying him a reputation from mugs like you.

        1. Dr_N Silver badge
          Trollface

          Re: We're in trouble...

          "Yeah, I looked and what his foundation is achieving is buying him a reputation from mugs like you"

          Hope you're enjoying it up there on your horse.

      4. Daniel B.
        Facepalm

        Re: We're in trouble...

        Just take some time to look at what his foundation is achieving, then jump off your high horse.

        Quite a few druglords were able to earn the locals' loyalty by using their ill-gotten gains to build hospitals, clinics and making their hometowns a better place. Even when they engaged in these altruistic acts, they were still ruthless criminals in the business.

        So while Gates' foundation might be doing good stuff, it doesn't serve as an automatic bad karma antidote.

        1. Yet Another Anonymous coward Silver badge

          Re: We're in trouble...

          The previous biggest benefactor was Andrew Carnegie, who built a steel empire by ignoring patents on the foreign plants he copied and hired a private army to kill striking workers - so there is at least some progress.

    2. dogged

      Re: We're in trouble...

      Just out of interest, how many lives did you save today?

  13. Anonymous Coward
    Anonymous Coward

    Let's not forget...

    The reason corporate tax rules & laws are so complicated is due to the special interest lobbying of corporations.

    And the free flow of staff between corporations and the government bodies making/enforcing the rules can't be good for transparency either.

  14. James Gosling
    Thumb Up

    Yup he's right y'know...

    Corporations have a duty to maximize profits. If you want them to pay more tax change the rules, don't expect them to contribute more out of some misplaced moral duty. And I say misplaced because these critics seem to imply that paying more money in tax is putting that money to good use, I very much doubt that. I'm sure money can be put to far better good than taxes.

    1. David Hicks
      FAIL

      Re: Yup he's right y'know...

      Yes, obviously it's far, far better for everyone that the money to be spirited out of the UK entirely, than it is for them to pay taxes on their earning here!

      And obviously they have a duty to go as far as legally possible to create profit. This is why nobody should ever get upset when sweatshops are used or when companies dump pollutants in rivers in less developed countries or any of that stuff, we can't expect the human beings in charge of these things to think about morality or ethics or any of that fucking hippie liberal bullshit, no, we need MORE MONEY DAMMIT and FUCK THE REST OF YOU.

      Over here in the real world, corporations are made up of people, and people absolutely can be judged for being amoral, money-grubbing, irresponsible fuckwits.

      1. mmeier

        Re: Yup he's right y'know...

        Yes, companies ARE required to do that. And have always been. It's called being profitable and companies that are not - die.

        It is the job of the LAWMAKERS (and by extension of the citizens) to make laws that restrict what a company can do. If you do not want sweatshops - make them illegal. Pass environmental laws and enforce them. If we do not - our fault.

        1. David Hicks
          FAIL

          Re: Yup he's right y'know...

          "Yes, companies ARE required to do that. And have always been. It's called being profitable and companies that are not - die."

          Not at the expense of all else. They are absolutely not required to be unethical or harmful to society. How these are viewed by individual people working for these companies is obviously very variable. But they are not, repeat NOT required to (for instance) use sweatshops or places they can pump effluent into the water.

          People make the decisions to do these things. Regardless of the laws we can and should hold the people that run businesses to a moral standard. And we can do this holding by not giving them our custom.

          1. mmeier

            Re: Yup he's right y'know...

            Okay so I do not shop at

            Amazon

            Google

            Samsung

            Lenovo

            Apple

            .....

            Hmmm - I might get rich but what to do with the money while sitting in a cave

            And that is assuming "Moral behaviour" is the right thing to do. Quite a few famous people are famous because they behaved amoral and by doing so did the right thing.

            1. David Hicks
              WTF?

              Re: Yup he's right y'know...

              "Quite a few famous people are famous because they behaved amoral and by doing so did the right thing."

              So if you're famous that automatically makes whatever it was you did to get there 'right' ?

              What.The.Actual.Fuck.

              1. mmeier

                Re: Yup he's right y'know...

                Churchill as an example - NOT defending Coventry was the right decision but allowing hundrets of people that COULD have been safed to die is amoral. Yet NOT compromising ULTRA was more important. Same for bombing german cities - amoral since it killed innocents by the score yet better than the alternative

                1. David Hicks
                  Stop

                  Re: Yup he's right y'know...

                  "Churchill as an example - NOT defending Coventry was the right decision but allowing hundrets of people that COULD have been safed to die is amoral. Yet NOT compromising ULTRA was more important. Same for bombing german cities - amoral since it killed innocents by the score yet better than the alternative"

                  This is not the same as what you said about celebrities and getting famous justifying whatever means it took to get there. This is also nothing to do with the situation at hand.

                  The coventry thing was a terrible decision to have to make and the ethics/morality would have been heavily weighed up and decisions taken painfully and with the best outcome for all people decided upon.

                  That you try to draw some sort of parallel between the "fuck you, I've got mine" culture of corporate multinationals, and painful decisions of wartime britain is pretty sick.

                  1. mmeier

                    Re: Yup he's right y'know...

                    Hint: This new fangled language from that funny island of France is not my primary language.

                    This is EXACTLY what I was referring to - famous people (And Churchill IS famous) making amoral decisions because they are the right thing to do.

                    And it IS the same for companies. Companies must follow the laws but within the laws they should act to THEIR best interest. Otherwise they loose out to companies that do. And if they loose - so do the workers.

                    If you want "moral" behaviour from a company - have the politicians draft the laws right.

        2. Fink-Nottle

          Re: Yup he's right y'know...

          There is no legal requirement in the UK for corporations to maximise their profit.

          According to the Company's Act 2006 (par 172) it is the duty of directors of a corporation to " promote the success of the company for the benefit of its members". when exercising that duty, they are to have regard to the long-term consequences of their decisions, to consider the interests of the employees and consider the impact of the company's operations on the community.

          Exploiting loopholes to maximise profit may actually contravene the Companies Act. Minimising tax liability is harmful to members (and employees) if they have to pay more personal tax as a result. By depriving the State of resources, the company may ultimately be damage it's long term commercial prospects and impact as the wider community.

          While profits are important, there is more to a successful company than just maximised profits.

          http://www.legislation.gov.uk/ukpga/2006/46/section/172

          1. All names Taken
            Alien

            Re: Yup he's right y'know...

            The thing is, it is up to the members of the company to decide what does and what does not meet their best interests.

            If the members wish for uncompromised maximal profits then that is what the members want and what the directors have to aim for.

            There is also the slight of hand anomalyof why pay £2 for something when the invoice tells you it should be £1.

            If directors decide to overpay to any entity be it taxman, supplier or employees the members of the company can decide that the directors need to pay that difference out of their own money and not company money.

            Democracies are sort of messy things are they not?

            1. David Hicks

              Re: Yup he's right y'know...

              "If the members wish for uncompromised maximal profits then that is what the members want and what the directors have to aim for."

              It sure is. Now, how often do the boards actually pay any attention to what shareholders want? LOL.

              And if the members do actually want this and demand it of the board, then the members can also be called immoral, unethical assholes. Because all of the actors here are human beings and we can and should expect them to behave like reasonable examples of the species. When they start externalising the costs and not keeping up their end of the implied social contract, they should expect legislation.

              "There is also the slight of hand anomalyof why pay £2 for something when the invoice tells you it should be £1.

              If directors decide to overpay..."

              BZZZZT. Analogy fail. There is no overpayment here if you abide by the tax laws as intended. In fact it takes a FUCK of a lot of time, effort and money to do what they do to avoid paying tax at the same level a company without the crazy international acrobatics would have to.

        3. El_Fev

          Re: Yup he's right y'know...

          No actually in the US , companies are required by law to do this, this was brought in to protect small shareholders, in the rest of the world, not filled with fucking sociopaths , its not the same!

          1. Fink-Nottle

            Re: Yup he's right y'know...

            No actually in the US , companies are required by law to do this

            Even if (and I'm not convinced) there was a legal requirement to maximise profit, it does not not necessarily follow that there is a legal requirement to minimise tax liability; that's tantamount to making failure to practice tax avoidance an offence.

            1. mmeier

              Re: Yup he's right y'know...

              Operating to the "best interests of the shareholders" is often found. And that is generally interpreted as "making as much profit as legally possible". So if it is legal not to pay taxes a company should do so. Otherwise shareholders can level "dereliction of duty".

              Same for non incorporated forms of companies like Ltd(GmbH) etc. There the businessman running the shop is expected by the co-owners to work for the best of the companie. And making money is good. If legally minimizing expenses can help - that is your job.

              Single owner "mom and pa" shops are the single exception. But in those the owner often is liable with all he owns so maximsing income is important, even more since most have litte "spare" cash. You can go bankrupt as a butcher if you are a bad businessman...

              The important word is LEGALLY!

              1. Yet Another Anonymous coward Silver badge

                Re: Yup he's right y'know...

                "best interests of the shareholders" is different from minimize tax this year.

                If the result of these tax games was a ban on government contracts, a monopolies commission investigation into your advertising business or a boycott of your coffee shops by consumers - then your shareholders might decide that you haven't done your best fiduciary duty.

                If maximum profit was the only driver then drug smuggling would seem to be the best business plan. A few of your employees might end up in Singapore jails but the shareholders would do very nicely.

        4. Anonymous Coward
          Boffin

          Re: Yup he's right y'know...

          "Yes, companies ARE required to do that. And have always been."

          Urban myth. Imagine this: a big company has a bad year and makes 0 profit. The idea that they are required to make a profit means that they must then instantly sell off all their assets to make the profit they didn't make from selling widgets.

          Clearly this is nonsense. The requirement to look after a company's finances is far more broadly defined than some brain-dead "make the maximum profit at all times" matra rolled out in these threads by apologists for the big law-breakers like Vodafone and Amazon (and, yes, of course they're breaking the law - don't be so childish to think they're not). A company's board has to act in a responsible financial way but what "responsible" means is not defined. If the shareholders think that the company has been run unresponsibly then they can take the board to court and argue about what is going wrong. But they have to make a case - they don't just go "they could have made £5 more by selling some t-shirts".

          "It's called being profitable and companies that are not - die."

          Tell that to Ford, or pretty well any bank. There are lots of companies that make short-term losses, sometime massive ones, but keep going. That's what is so stupid about the "duty to make a profit" bullshit - it ignores what term the profit should be made over and that is a matter for the shareholders to decide, not the law.

          1. mmeier

            Re: Yup he's right y'know...

            Companies that do not try their best to be profitable end up bankrupt. Lean years can happen but even than a company tries hard to make as much money as it can to keep money drain small. That is true for the craftsman next door and it is true for the big players.

            So yes, a CEOs duty IS to make as much money as he can. If the company is traded "best effort" is expected by the shareholders and "Effort to earn money" (Gewinnerzielungsabsicht) is considered a sign of a trader (Kaufmann) by german law.

      2. Neil Wilson

        Re: Yup he's right y'know...

        It can't be spirited out of the UK. They don't use Sterling in many places outside the UK.

        You have to exchange it for something else with somebody coming in the opposite direction.

        Non-convertible currencies alter the way the game is played.

    2. Anonymous Coward
      Anonymous Coward

      Re: Yup he's right y'know...

      "Corporations have a duty to maximize profits."

      No they don't.

  15. Ben Holmes
    Thumb Up

    Well said...

    ...that man.

    I had a rant on this very subject in another part of the forum a little while back, but Mr. Gates here put his argument across far more succinctly than I could. Let's see if the bottom feeders politicians will actually listen this time...

  16. Anonymous Coward
    Anonymous Coward

    Happy to Comply?

    “This is not a morality thing, this is about the law,” he said. If nations set new tax levels “companies will be happy to comply”.

    Really, anyone not think that these firms wouldn't send in legions of lobbyists to try and prevent or change any new laws that might cost them?

    1. Diogenes
      Devil

      Re: Happy to Comply?

      I understand US Tax law is one of the few that allows people and corps to voluntarily pay more tax than they have to. Last I saw the amount actually received was @ 40k.

      BillG, Warren (" tax is unfair, my receptionist pays a higher rate than I do") Buffett, and all the hollywood "intelligentsia" who want to increase govt spending or taxes have the perfect opportunity to donate a little something to the coffers and ease their consciences.

      Crickets ........

  17. This post has been deleted by a moderator

  18. TheUglyAmerican
    WTF?

    Who pays corp taxes?

    Corp taxes are built into the price they charge for goods and services. Ultimately taxes are only paid by individuals. Blather all you want to the contrary but I run a business and that's exactly what I do. Raise my taxes? Fine. I raise my prices to cover it. I'm not running a charity.

    1. JDX Gold badge

      Re: Who pays corp taxes?

      Rubbish. They only pay taxes on profits after paying salaries and fat bonuses. They only build CT into prices in the sense that they want to make money on sales.

    2. ecofeco Silver badge

      Re: Who pays corp taxes?

      Not running a charity? Neither are your customers.

    3. Neil Wilson

      Re: Who pays corp taxes?

      No you're wrong.

      Ultimately taxes are only paid by corporations. That's why the wages of staff are at the value they are. They raise their wages to cover the cost of taxes.

      Of course I jest slightly. In reality taxes are paid at the point in the spending cycle you decide to measure them - and any point is as good as any other.

  19. regprentice

    There is no legal obligation to maximise shareholder wealth - it is an economic idea known as shareholder primacy initially proposed by the economist milton friedman.

    It has become the standard of economic thought on the primary objectives of corporate entities and is being challenged by ideas of corporate social responsibility.

    What this means in practice is that companies think you will get a warm fuzzy feeling if they maximise shareholder wealth BUT ALSO make token charitable donations.

  20. Johan Bastiaansen
    FAIL

    Bill is wrong

    Small business are discriminated against.

    It's like being a white guy in South Africa under the apartheid, taking full advantage of it and explaining: "if blacks want to be treated equally, they should change the law".

    1. JDX Gold badge

      Re: Bill is wrong

      Except that in this scenario the role of the black people, who had no rights, is filled by the government, who make the laws in the first place. So it's not in any way the same.

      1. Johan Bastiaansen
        FAIL

        Re: Bill is wrong

        You got that from "Small business are discriminated against." eh?

        The government is always the government. They groom the guys with the money.

        The individual and the small businessen don't have the power to change the laws. Because the government is in bed with big money.

  21. Anonymous Coward
    Anonymous Coward

    Don't wanna pay corporation taxes?

    Then don't form a corporation. Simple.

  22. BornToWin

    Not to worry

    Bill Gates has no morals IMO and wouldn't know what they are if you splained it to 'em.

  23. Allan George Dyer Silver badge
    Boffin

    We can fix this...

    Multinationals can easily recalculate their profits to appear in a more favourable country, and legislators and career bureaucrats (even the non-corrupt ones) are unable to predict the outcome of changing the rules they control in a complex, international environment. Accountants are part of the problem anyway.

    What we need is a single, clearly-defined ruleset written in {insert your preferred programming language} that can be applied globally. El-reg commentards are clearly well-placed to do this. We should begin work immediately, and aim to install the ruleset in all world governments (with or without their knowledge and approval) by the end of the year.

    What could possibly go wrong?

    1. All names Taken
      Paris Hilton

      Re: We can fix this...

      Quote

      What could possibly go wrong?

      Unquote

      Vested interest.

      Said accountants probably auditors and their respected companies and corporations do very well out of having a complex and complicated tax regime.

      Why, in a reasonable world one wonders, would the dark art of declaring a financial transaction or stock level be a dark art?

      Potential ans: because there is a lot of money in it to some.

      It really is all a bit silly. If guvmint wants to espouse and posit morality where else is there a better/best start than with its own UK civil servantry. The guvmint has full (or is it fool?) control (or is it full fool or fool full?) over civil servantry.

      Some moral issues it may wish to tackle head-on and promptly might be postcode lotteries regarding health care, postcode lotteries regarding social care, observable event for legislation to slate the poor and favour the rich (it has a historical (hysterical?) footprint), the observable phenomena that civil servants are prepared to put lives at risk to save a shekel or two.

      Example: potholes. Present practice is to put lives of road users and/or pedestrians (I'm including horse riders too of all ages) at risk, to have increased incidence of damaged or maimed people, increased incidence of damaged property all through pothole related accidents as a gamble to save money.

      Astute readers might note that while the private sector seems prepared to take less income the public sector ploughs on regardless?

  24. RealBigAl

    Corporations behave like sociopaths in the market place.

    http://www.imdb.com/title/tt0379225/

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