Posted in business, companies, consumers, CSR, ethics, government, hidden taxes, responsibility, society, sustainability, tax, taxes, transparency, values, tagged business, companies, CSR, government, hidden taxes, responsibility, taxes, transparency on May 4, 2010 |
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No one likes taxes and we all pretty much find news ways to complain about our tax burden. Both left and right have their own issues. The left complains about too much taxes going to subsidize big companies or the military and too little going to social needs such as health care or education. The right complains that money going to government provided health care or unemployment benefits pushes up individual taxes and the burden on those who work. Where the money goes is just politics. What they do have in common is their universal dislike of taxes. And there is one tax that they all hate most…
Those hidden taxes. The little bits of taxes you pay each and every day. Taxes on stuff you buy. Taxes when you die. Taxes to fill up your car. Taxes to recycle. Taxes to use the park. Taxes to blow your nose. One hidden tax after the other. You don’t see it or notice it too much because there are so many of them hidden away in each and every corner. You do something and you pay taxes. Little bit by little bit. But they are always there. Somewhere.
No wonder companies (and people) complain that these hidden taxes are just too much. They want transparency. They want to know what they are paying and when they are paying it in a more open and transparent way. Why not just have a flat rate on everything so we can know what we pay and when we pay it. They are just asking for the basic ingredient of CSR – transparency.
(Of course the underlying reason for this call is not only to have taxes be consistent and transparent but to also have a single source they can attack.)
Companies are especially vocal about their opposition to these hidden taxes. They complain that it puts them at a disadvantage over their foreign competitors. The odd thing is that all companies complain about this no matter where they are based… And they complain that they just have to pass on all these hidden tax costs to the consumer. A good way to get the average Joe on your side – tell them it isn’t your fault that you are charging them more than before… you are just doing what the government forces you to do, right?
Bad argument that one. Any cost a company takes on will be passed on to the consumer no matter what the reason or source of that cost might be. Pharmaceutical companies pass on the cost of finding new drugs. It doesn’t matter if the drug fails or not – you get charged for the failures. Oil companies pass on the cost of searching for more oil. You pay for the investment they make. All that makes perfect sense. It’s what companies do to find something new to sell us or keep servicing our thirst for new and more products. It’s business.
But companies also pass on failure that can be put squarely at their own feet. Years of bad decision-making at US car manufacturers? Guess who pays? Big oil spills? Guess who pays? A golden handshake to a failed CEO? Guess who pays? The consumer do. Companies just pass on those costs to the consumer in the same way they pass on every other cost. Companies will not make decisions that will pull them down. And rightly so. Companies target their bottom line and know what margins they need to keep investors happy. And if these margins get squeezed then they make “price adjustments” to cover their bases. I’m not saying there is anything wrong with this. That’s just how business works. That’s business life. But let’s be transparent about those costs. Business do not only pass on taxes to consumers. They pass on every single cost to the consumer. Until the consumer kicks back when the benefit of the product is surpassed by the cost they have to pay – then the business fires a few people and make a product or service “adjustment” or creates a new product that offer more value to that consumer. But that doesn’t happen as often though. Consumers tend to take a lot of punishment before they start kicking back.
That brings me to the hidden taxes that companies complain about but that they are more than happy to implement themselves. An article in the NY Times highlighted how hotels are expected to substantially increase surcharges in the coming year. Oh we know about some of those surcharges the same way we know about some of the hidden taxes – internet connection in your hotel room for example. But some are hidden away or in fine print that most travelers don’t know about and hardly have time to look into while on holiday or a busy business trip. For example, I don’t use the minibar because of the stupid prices they charge. But I didn’t know that some hotels even charge you a minibar restocking fee of $2.95 to $5.95 a day, once the first item is removed. Not only do they rip you off with the high prices but they charge you an additional fee to restock! It’s like complaining about high taxes and then being charged a few more dollars for paying those same taxes.
Of course it is not only hotels that do this. Almost every single company has these in one way or another. Pay up for your luggage please. Want to use the toilet? No problem – pay up. Want to use the ATM to pay for something? Here is another charge if you don’t mind. Oh, you actually wanted to get paid if you are sick? Some fine print in your health care benefits says you have to pay more. Want to access your money at the bank? Heck, they have different ways to charge you no matter what you do – teller, ATM or check. More taxes. More hidden taxes. These are the easy ones. The less well hidden taxes. The ones we can sniff out because some sparky manage to get upset enough about it when they had nothing else to do but go through the fine print.
I wonder how many hidden taxes are out there practiced by companies each and every single day. The little bits of fine print you know you can’t read because it isn’t written in plain English or a font large enough to read with your glasses on or you don’t have 72 free hours to spend reading the pages and pages of documents that comes with almost every single product and service you buy nowadays. They are out there. We just don’t know where or how much.
So… To those business who complain about hidden taxes. Please stop. Practice what you preach and then we can talk. Most governments are not transparent and neither are most companies when it comes to these hidden taxes. It’s life and the consumer will continue to pay. Let the consumer complain if they want. But please make sure you are “hidden taxes free” before you start complaining about government taxes – especially hidden taxes. Responsible companies are transparent about all the costs consumers pay – no hidden costs or taxes allowed. Make it simple. Make it transparent. Write it in BIG LETTERS and tell each consumer about these charges BEFORE charging them. Why don’t you write a document about your own hidden taxes so consumers can read this the way you read tax laws? Actually don’t because no average person can ever understand tax laws. Be better than the government and make it a short, simple and easily understood document and then we can talk. Transparency is not only about making information easily available. It is also making it easy to understand. And ensuring that people know about it. That’s what a responsible company will do. Or at least what they should do.
Maybe we can all do what the rich individuals and big companies do – find tax havens. Maybe we can find a few companies out there who won’t have these hidden taxes. Maybe then we can talk about transparency. But I won’t hold my breath looking for those companies. It would be like holding my breath for a government somewhere who will actually get rid of the hidden taxes. And we know that ain’t happening soon. No matter who is in charge…
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Posted in Brazil, business, companies, condoms, CSR, development, environment, green, rubber, society, sustainability, tagged Brazil, condoms, CSR, forests, government, innovation, l development, rubber, sustainability on April 5, 2010 |
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What kind of a (tree) hugger are you?
Brazil is, rightly or wrongly, perceived as the “sexy country”. Beautiful people ready to party and… erm… have sex. The Brazilian government embraced this stereotype and took aim at more than just safe sex by combining social and environmental issues into a product that will hopefully make us all hug a tree. Sustainable condoms…
Almost all condoms are made from oil or oil by-products. Rubber used to be tapped from trees but oil has taken over as the cheaper alternative. It has devastated the tapper industry in Brazil where the tapping rubber has been a traditional way of life in the Amazon. It’s a shame as tapping of trees are very sustainable as it doesn’t kill the tree. This was where the Brazilian government took the initiative and combined a few core challenges into a major project.
First up has been the Brazilian government’s very succesful anti-HIV/Aids program. The Brazilian plan was attacked by conservative governments and religious groups (and a few drug companies) but the government stood strong and targeted safe sex as a key part of addressing HIV/Aids in Brazil – that and cheaper drugs. And it work. Really well. So well that the Brazilian government is now the single largest purchaser of condoms in the world.
So how do you combine something dealing with health challenges with a program that can also tackle environmental and social challenges? By looking at the rubber.
Tappers have lost their income and forests are cleared for farming – a social and environmental nightmare. The Brazilian government stepped in and backed a plan to bring their purchasing power to the rubber tapping industry.In 2008 the government announced a plan to make the production of condoms more environmentally friendly by sourcing the rubber from sustainable sources – the trees.
Three challenges dealt with in one go – health, economy and the environment. People get condoms to protect them. People get jobs tapping rubber. The environment benefits because no trees are cut down. Beautiful.
Of course none of this would have been possible if the Brazilian government didn’t put their purchasing power behind it. But they did and the industry is starting to flourish beyond environmentally safe condoms (no pun intended). Handbags and other goods are being manufactured and the environment is at the heart of the project.
The lesson in this is that we should always take a step back and see how many angles we can work from. The Brazilian government took an angle that leveraged one program to impact others and drive even more benefits. Too often companies (and NGOs) look at a challenge from one dimension – micro-credit, education, health etc instead of looking at how they can combine different elements to have a better impact. You need to source a product from a farm in Africa? No problem working with the farmer and help him/her become more efficient. But what about education? And the infrastructure? And health? Work with others in the way the Brazilian government did and become more efficient. This way your project have a much broader impact and 2 + 2 really equals 5. Combine efficiencies and look the problem from different angles. Surround yourself with partners and employees who are different. The beauty of NGOs is that they do look from other angles but most companies miss these opportunities because they are just too narrow in their own focus.
Be open and find a new angle. You never know, you might become the “sexy company” who manages to truly make your bottom line fit in the with the environmental and social bottom line.
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