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Still, Twitter is a profitmaking company

by Merve Şebnem Oruç

Mar 24, 2014 - 12:00 am GMT+3
by Merve Şebnem Oruç Mar 24, 2014 12:00 am
Last month San Francisco city workers, led by the Service Employees International Union Local 1021, marched to Twitter Inc.'s headquarters on 1355 Market St. and protested outside calling for an end to corporate tax breaks to health corporations and "techies."
The workers were angry since San Francisco City leaders claim there is a budget deficit but corporations continue to get a free pass.

According to union officials, the corporate tax breaks to Twitter cost the city about $55 million last year while lost tax revenues negatively affect the funds available for city employee healthcare benefits and essential city services. The protestors chanted "Whose city? Our city! We want Twitter to pay its fair share," arguing that the policies should prioritize workers and the middle class who actually deserve economic relief, not the 1 percent.

The rage against tech companies in the U.S. will likely increase in the near future as annual reports from companies like Twitter show that there is a stock option loop hole that helps 12 tech companies legally dodge $4 billion in taxes, according to the Citizens for Tax Justice, an activist research group.

The group says the companies could eliminate all taxes on the next $11.4 billion they earn, giving them $4 billion in tax cuts. Twitter has about $100 million of unused stock option deductions, while Facebook has over $2 billion in unused tax breaks.

I am in doubt if this is ethical for Twitter and Facebook, which have a reputation for championing free speech and providing a central platform for spreading information about the movements against income inequality and wealth distribution like Occupy Wall Street. But I am pretty sure people who are sensitive about their rights will do a double take in the end.

The situation is much worse outside the U.S. The fact is they are making money from and in many countries and they don't pay taxes. The Turkish Finance Ministry last year started to work on collecting taxes from various foreign-based tech companies which have considerable online advertising revenues. The online advertising market earns about $1 billion every year in Turkey, while 70 percent of the income goes abroad without being taxed. The ban on Twitter in Turkey has been portrayed as a political decision by the government against freedom of speech, but it is in fact a preventive measure against Twitter Inc. It is also a response to Twitter's failure to comply with hundreds of court rulings on Turkish citizens' complaints with regards to violations of personal rights and the right to privacy. All companies, especially those profiting from and in Turkey have to comply with the rulings of Turkish courts. It is much the same for every other country.

The block on Twitter will be lifted soon, assuming the company abides by Turkish legislation, but I hope it will also open the door to better financial regulations like tax payments.

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