Having options

It’s no surprise that tax is one of the big issues at Google’s Big Tent event this year. Ed Miliband was pretty damning about their tax arrangements this morning and then Eric Schmidt was pretty transparent about how they think about it this afternoon. For what it’s worth, I think the fault is with the crazy ways that international tax works rather than any single government or company. Google is just an easy target because of ‘don’t be evil’.

There are a few things about the politics of Silicon Valley that I find a bit distasteful (the noisy but small number of Ayn Rand disciples for example), but it is a predominantly progressive place. One example is the way that tech startups give employees a stake in the businesses. As Steven Johnson says, the fruits of tech startups have been shared much more widely than almost any other type of company. They dwarf companies like John Lewis that Ed Miliband held up as a beacon in his talk this morning. It’s a strange kind of ownership (option pool shares are normally non-voting shares), but it is what has created one of the most innovative communities on the planet — people who become rich through option schemes provide the funding for wave after wave of early stage risky startups as angel investors. There’s nowhere that has quite the same combination of expertise and cash helping startups get going.

So for me the tax affairs of tech companies are a bit of a red herring — of course they should pay their fair share everywhere they operate — Â but there’s also plenty we should be learning from them in terms of progressive and responsible capitalism.

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