Extract from ABC News
Analysis
Meta's Mark Zuckerberg, Amazon's Jeff Bezos, Google's Sundar Pichai and Tesla's Elon Musk were high-profile guests at Trump's inauguration. (AP:Julia Demaree Nikhinson)
They sat there on the podium looking smug and, in some cases, slightly uncomfortable.
Four men, talented, driven and visionary, operating in different fields of commerce but tied by their focus on new technology and new frontiers.
Unelected either by the people or the Senate, they nevertheless were elevated into the same exalted territory as the new president's hand-picked cabinet.
If ever there was a statement about power and influence, about American hegemony, it was the sight of the Fab Four — Elon Musk, Jeff Bezos, Mark Zuckerberg and Sundar Pichai — sitting like ducks in a row just behind the newly elected leader, united by a common goal, enriching themselves.
And while the world of high finance gyrated around every second sentence of Donald J Trump's inauguration speech, waiting for a sign or even a mention of the T word, it wasn't to be.
Tariffs have loomed large over global economy during the past year as Trump ramped up his inward looking and contradictory campaign that America would return to global greatness by shutting out the world.
But who cares about logic when the leader of the world's biggest economy is threatening to impose a series of debilitating tariffs on his biggest trading partners and perhaps cripple global trade?
Who exactly will be targeted? What levels would be imposed? When will they take force?
In all the confusion, almost everyone overlooked the main game. They should have been homing in on another T word policy: Tax.
While Donald Trump is focused on tariffs, tax is high on the personal agendas of the tech titans. (Pool: Shawn Thew via Reuters)
Tech talks tough on tax
The tech bros have a new name in some quarters. They're becoming known as the "broligarchs".
Each, at some stage, has seen a future few of us could have envisioned. And while innovation has been the hallmark of their success, each also has harboured a disdain for anything that might impact their ability to maximise earnings.
Top of that list is tax.
Lo and behold, within hours of the new president's inauguration speech, he'd signed an executive order, announcing America's withdrawal from an Organisation for Economic Cooperation and Development initiative designed to standardise global corporate tax rates and limit tax avoidance.
Donald Trump had signed dozens of executive orders within hours of being sworn in as the 47th President of the United States. (Reuters: Carlos Barria)
It was a gift beyond riches. With a global minimum 15 per cent tax idea out the window, the mega multi-nationals will be free to push countries back into a race to the bottom.
For almost two decades, the more established tech outfits have perfected the fine art of gaming the global tax system.
Where resource giants and manufacturing conglomerates used effective but relatively unsophisticated means of shifting their profits to low taxing jurisdictions, the tech bros became far more inventive.
Instead of just lending money to the local mining subsidiary at hugely expensive interest rates, which drained all the profits out of the Australian subsidiary, the tech companies used far more sophisticated methods.
Aided by the fact that they manufactured different components in different countries, if they manufactured anything at all, and sold their wares across the globe, it was easy to justify operating out of low taxing destinations where profits could be shovelled.
The modus operandi is relatively simply, although the corporate structures are generally complex and convoluted.
Set up a marketing firm in a low taxing country, that charges related companies in other parts of the global network exorbitant fees.
Or there's the preferred strategy of establishing a firm that owns all the Intellectual Property in a tax haven which charges its cousins in high taxing countries exorbitant fees for using technology derived from the US parent.
For years, the Australian arms of the big tech outfits generated massive revenue streams but made little profit here and hence paid hardly any tax. In many cases, most of the money was shunted off to Ireland.
There goes the revenue
If there's one thing Donald Trump doesn't appreciate, it's anything he perceives as a threat to his powerful friends.
And threats we've been, occasionally going head to head with the tech bros.
Australia has been at the forefront of a global push to force big tech firms pay tax in the jurisdictions in which they operate.
A decade ago, former treasurer Joe Hockey marshalled the support of G20 Treasurers during the G20 Summit in Sydney with a campaign to eradicate what's known as Base Erosion and Profit Shifting.
It's since been a common endeavour of both sides of the political fence. There's been progress but the results have been mixed.
In 2018, Amazon clocked up sales in Australia of more than $1 billion but paid less than $20 million in tax.
That jumped dramatically the next year when it paid $100 million in tax to the Australian government. But even then, about $4.8 billion in local advertising revenue was booked through its Singapore subsidiary where the corporate tax rate is much lower.
Google shuffled vast amounts of its European and African earnings through Ireland which had a nominal tax rate of just 12.5 per cent. But a European Union investigation discovered it paid about 1 per cent tax on its earnings as a result of a sweetheart deal with the Irish government.
That deal has since come back to bite the tech titan with Ireland now demanding $21 billion in back tax payments.
Google is no stranger to finding loopholes to avoid paying tax on its earnings. (Reuters: Andrew Kelly)
Just one more kick to the …
It's not just corporate tax either.
Australian governments have gone on the front foot, demanding the tech giants pay for the Australian journalism they plaster across their websites, an agreement Meta's Zuckerberg recently opted to junk.
Then there's the world leading legislation to protect children under 16 from the excesses of social media by just outright banning access.
Australia suddenly has become the world's strictest regime when it comes to policing the internet.
Being out on a limb with Trump could prove dangerous. Just ask Colombian President Gustavo Petro who this week refused to accept several plane loads of Colombian deportees.
An irate Trump declared trade wars all around with tariffs, visa restrictions and other penalties as Colombia retaliated with similar measures.
Within hours, it was all over. Petro capitulated and the planes were back in the air.
Perhaps our best strategy in this ongoing global tax battle is to let the broligarchs battle it out amongst themselves.
It only took two days of Trump's presidency for the innate distrust and competing egos to boil to the surface.
Donald Trump was joined by Oracle co-founder Larry Ellison, SoftBank CEO Masayoshi Son and OpenAI CEO Sam Altman at the announcement of a $US500 billion AI plan. (Reuters: Carlos Barria)
Just a few hours after the new president announced his support of a half-trillion-dollar build-out of artificial intelligence infrastructure, Musk was throwing mud at one of the participants, Sam Altman, claiming the announcement was "fake" and that the major players wouldn't be able to raise the finance.
If naming your first big project Stargate wasn't odd enough, given the experience of former Republican president Richard Nixon, Trump then seemed to revel in the ensuing dogfight.
"Elon doesn't like one of those people," he told reporters.
Altman, meanwhile, continued to rile up his rival, posting on Musk's own X social media platform: "Just one more mean tweet and then maybe you'll love yourself…"
Siblings, eh.
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