Google used a tax loophole to shelter $19.2B • Hacker News Board

Re: Google used a tax loophole to shelter $19.2B

#11

Post by charlesdm » Tue, Jan 02, 2018, 10:10 PM UTC

deadmetheny wrote: post #9

charlesdm wrote: post #5

Earlier quoted context omitted.

Loopholes do not exist. There is only the law (and people who are smart enough to figure out a way to place themselves outside of the application of said law). Generally the EU gives member states the right to grandfather certain arrangements because it would be hard to restructure everything in a few months. Most countries use a 3 or 4 year grandfathering period. The same thing applies to the old IP regime (IP incom…

These loopholes abuse the tax codes of multiple nations. They absolutely are loopholes that ignore the spirit of the law.

Honestly, to me, the law has no spirit. The law having a spirit would mean we have to depend on ethical beliefs, and those can be wildly different for every person and/or company.

What seems like an acceptable rate of taxation to pay for person A seems outrageous for B, and both rates would probably seem outrageous anyway to both those people if they have to pay those abroad (e.g. not in the home country of the main shareholders)

Let's just stick to the letter of the law -- things are complicated enough as is.

Edit: and for those who haven't noticed, member states introduce some of these "loopholes" on purpose in order to attract incoming investment. For example: there is a reason the Netherlands does not levy withholding taxes on 1) royalties and 2) outgoing dividends. They do this so people and companies would book some profit there so they can then tax it.

Re: Google used a tax loophole to shelter $19.2B

#12

Post by ocdtrekkie » Tue, Jan 02, 2018, 10:15 PM UTC

strommen wrote: post #4

When this loophole exists, it's tough to blame Google for not taking advantage of it. You may as well ask them to donate their profits to the federal government.

Consider that most of Google's political positions lean liberal, in subsidizing government services by raising taxes. For this same company to be participating in a scheme designed to deprive the government tax revenue, while advocating raising everyone's taxes to pay for things...

Suffice to say, this is not a company "doing the right thing", as their code of conduct suggests they should.

And bear in mind, this is not a loophole in our tax code, it is a loophole in international tax handling between multiple countries, and the primary result of this is that all of those billions get stashed in Bermuda instead of coming back to the US where it can enrich society.

Re: Google used a tax loophole to shelter $19.2B

#13

Post by DanBC » Tue, Jan 02, 2018, 10:17 PM UTC

thrill wrote: post #6

There are no such things as tax loopholes. There is compliance with the law as Congress has written with all of their agendas, and there is noncompliance.

Laws are interpreted by the courts.

Congress might write a law with some expectations.

A well paid accountant and lawyer team might interpret the law differently.

The company employing the team is trying to obey the law, so this isn't illegal tax evasion. But it is tax avoidance, and the use of loopholes may be found to be illegal by the courts, or the law might change to make it illegal.

"Loophole" is just short hand for "unexpected use of law that hasn't been tested by the courts".

Re: Google used a tax loophole to shelter $19.2B

#14

Post by acover » Tue, Jan 02, 2018, 10:19 PM UTC

strommen wrote: post #4

When this loophole exists, it's tough to blame Google for not taking advantage of it. You may as well ask them to donate their profits to the federal government.

Do you blame people for legally scamming the elderly?

That it is legal does not make it good.

Re: Google used a tax loophole to shelter $19.2B

#15

Post by jgalt212 » Tue, Jan 02, 2018, 10:21 PM UTC

strommen wrote: post #4

When this loophole exists, it's tough to blame Google for not taking advantage of it. You may as well ask them to donate their profits to the federal government.

They should not be taking advantage of one of their largest customers and benefactors (weak anti-trust enforcement).

Re: Google used a tax loophole to shelter $19.2B

#16

Post by gowld » Tue, Jan 02, 2018, 10:24 PM UTC

thrill wrote: post #6

There are no such things as tax loopholes. There is compliance with the law as Congress has written with all of their agendas, and there is noncompliance.

Loopholes exist, because language is imprecise and imperfect. Laws have loopholes like code has bugs.

In this particular case, it's probably not a loophole, since the behavior in question has been known for many years, and the US government has made no effort to change how the law fails to tax overseas income of corporations.

In many cases, tax law says or (implies) "you pay $X to us, but you get credit for tax paid to other countries".

Re: Google used a tax loophole to shelter $19.2B

#17

Post by Trundle » Tue, Jan 02, 2018, 10:24 PM UTC

acover wrote: post #14

strommen wrote: post #4

When this loophole exists, it's tough to blame Google for not taking advantage of it. You may as well ask them to donate their profits to the federal government.

Do you blame people for legally scamming the elderly? That it is legal does not make it good.

Scamming the elderly is punching down.

Re: Google used a tax loophole to shelter $19.2B

#18

Post by gowld » Tue, Jan 02, 2018, 10:24 PM UTC

acover wrote: post #14

strommen wrote: post #4

When this loophole exists, it's tough to blame Google for not taking advantage of it. You may as well ask them to donate their profits to the federal government.

Do you blame people for legally scamming the elderly? That it is legal does not make it good.

Are the elderly entitled to extra protection against scams? Why?

Re: Google used a tax loophole to shelter $19.2B

#19

Post by musage » Tue, Jan 02, 2018, 10:27 PM UTC

gowld wrote: post #18

acover wrote: post #14

Earlier quoted context omitted.

Do you blame people for legally scamming the elderly? That it is legal does not make it good.

Are the elderly entitled to extra protection against scams? Why?

Are sociopaths entitled to not be judged by their non-sociopath peers? Why?

Re: Google used a tax loophole to shelter $19.2B

#20

Post by burke » Tue, Jan 02, 2018, 10:27 PM UTC

ocdtrekkie wrote: post #12

strommen wrote: post #4

When this loophole exists, it's tough to blame Google for not taking advantage of it. You may as well ask them to donate their profits to the federal government.

Consider that most of Google's political positions lean liberal, in subsidizing government services by raising taxes. For this same company to be participating in a scheme designed to deprive the government tax revenue, while advocating raising everyone's taxes to pay for things... Suffice to say, this is not a company "doing the right thing", as their code of conduct suggests they should. And bear in mind, this is n…

Corporations literally have a legal obligation to attempt to pay as little tax as is legally possible (really, to maximize shareholder value, which might even mean paying less tax than is legally possible, as long as the expected value of the gambit is positive).

The issue is not corporations taking advantage of it, the issue is that we have a system where an actor is obligated to optimize for certain variables within the rules of a network of systems, but the network of systems is not coordinated in a way that prevents "abuse" as everyone would like to define it, but strictly speaking, haven't.