Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Tax Haven That's Saving Google Billions

businessweek.com

Post reply on HN
Print view View original

61–70 of 292 posts

Re: The Tax Haven That's Saving Google Billions

#61

Post by rmc »

borism wrote: post #49
rmc wrote: post #22

In Ireland, these kinds of tax breaks are one of the foundations of our economy. They aren't viewed as a way to give a hand out to the big companies, but as a way to create jobs. This article mentions that 2,000 people are employed in Google Dublin. Given Microsoft, Amazon, Intel, IBM and Sun also operate, there's easily 10,000+ people employed thanks to our low tax rate. There are only 1,000,000 people employed in I…

And that's the reason Ireland has something like 1000% external debt to GDP [1] - politicians and local businessmen alike got so drunk with their success of luring in corps that they assumed it will continue forever. The reality is however, that taxes will have to be raised and the corporations will leave for yet another island paradise, and that will result in social catastrophe either way. [1] http://en.wikipedia.o…

Ireland's current financial problems are probably due to the property bubble. However there's been massive unemployment (it's tripled in 3 years to 14%), do you really think the government are going to force all these high tech jobs out of the country now?

Re: The Tax Haven That's Saving Google Billions

#63

Post by camiller »

maukdaddy wrote: post #37
scaleordie wrote: post #2

What was my tax rate again? Oh yes, somewhere around 40%... Nice to see that everyone is doing their share.

Unless you made a shitload of money I highly doubt your effective rate was 40%. The rate on the last x% of your money might have been taxed at 40% but most places have a progressive tax structure. Deductions should lower the effective rate further. I'm speaking for the US, by the way.

Yeah, my combined marginal federal and state rates are like 33%, my effective rate after mortgage interest and charitable deductions was like 8-9%. I'm going to try to be more like Google though.... ;)

Re: The Tax Haven That's Saving Google Billions

#64

Post by Matt_Cutts »

borism wrote: post #36
cperciva wrote: post #21

Earlier quoted context omitted.

Is it ethical to avoid paying tax as an individual? Many would say no. They might say that, but their actions -- buying from duty-free stores, contributing to tax-deferred retirement accounts, filing jointly with a spouse, and claiming every possible deduction -- suggest quite the opposite. There's a world of difference between illegal tax evasion and legal tax avoidance , and all indications point to what Google is…

We can argue what is legal or illegal, and whether something that is legal should be illegal etc for ages. The fact is that they pay 2% tax while most US based persons pay at least 10x that rate.

Actually, if you go read the longer version of the article at http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-sho... you'll find that Google's overall effective tax rate was 22.2 percent last year. The BusinessWeek version of the article is radically shorter and suffered for those edits, in my opinion.

Re: The Tax Haven That's Saving Google Billions

#65

Post by wolfrom »

retube wrote: post #44
dbingham wrote: post #20

Earlier quoted context omitted.

It's not just Google who is evil. They're just getting called out on it, because they've pledged not to be evil. It's rather expected of other corporations because we expect them to operate with out morals in search of maximum profit. But any corporation that takes advantages of tax loop holes, legal or not, is doing evil. By doing that they are taking money out of the pockets of every day citizens in every country w…

You could argue that the moral thing to do is maximise profit for shareholders (this is what they are legally required to do anyway). By deliberating paying more taxes than they need to shareholders will be penalised (smaller dividends etc).

That's true. Google would be cheating its shareholders by not returning the most value through legal means. Of course, in Google's case, they probably could choose to pay more tax and get away with it, but why would they?

Re: The Tax Haven That's Saving Google Billions

#66

Post by andrewf »

charlief wrote: post #27
spoiledtechie wrote: post #12

Earlier quoted context omitted.

The US Corporate Tax is one of the lowest in all the world. http://www.qbalance.com/Corporate_Tax_Rates_United_States.ht... But Bermuda still beats out us at ZERO corporate tax rate.

Including others for comparison from Wikipedia ( http://en.wikipedia.org/wiki/Corporate_tax ), interesting to note that Vancouver, Canada, small business is taxed 13.5%, and to no surprise, there are many startups in Vancouver: Examples of corporate tax rates for a few English-speaking countries include: Australia: 30%, however some specialized entities are taxed at lower rates. Canada: Federal 11% or 18% plus provin…

For Australia, you have to take franked dividends into account.

When profits flow onto shareholders, the shareholders receive tax credits for tax that the company has paid on its profits. The result is often that, by the time corporate profits end up in the shareholder's pocket, there is 0% effective corporate tax over and above personal income tax paid on the dividend.

EDIT: That's for profits. Companies still have to deal with state payroll tax, collection of sales taxes, etc.

Re: The Tax Haven That's Saving Google Billions

#67

Post by borism »

rmc wrote: post #61
borism wrote: post #49

Earlier quoted context omitted.

And that's the reason Ireland has something like 1000% external debt to GDP [1] - politicians and local businessmen alike got so drunk with their success of luring in corps that they assumed it will continue forever. The reality is however, that taxes will have to be raised and the corporations will leave for yet another island paradise, and that will result in social catastrophe either way. [1] http://en.wikipedia.o…

Ireland's current financial problems are probably due to the property bubble. However there's been massive unemployment (it's tripled in 3 years to 14%), do you really think the government are going to force all these high tech jobs out of the country now?

What's the other alternative? Defaulting on it's obligations? Why other countries with property bubbles don't have problems as large as Ireland?

(all the downvotes would be appreciated if they can provide alternative solutions)

Re: The Tax Haven That's Saving Google Billions

#68

Post by patio11 »

pg wrote: post #17
dtf wrote: post #14

Earlier quoted context omitted.

Because Google have a public image of behaving ethically. Everyone expects banks and evil multinationals to do this kind of thing. Is it ethical to avoid paying tax as an individual? Many would say no. But when a company does it, they lay their blame on the shareholders and the market. So the more outrage about this subject, the better. Our governments can either raise taxes or lower taxes. But they shouldn't let ind…

Is it ethical to avoid paying tax as an individual? Many would say no. Do you mean avoid (by legal means) or evade (by illegal means)? Any government that uses tax incentives to affect citizens' behavior is saying it's ok to avoid taxes. If they promise your taxes will be lower if you do x rather than y, they're counting on your desire to avoid taxes to motivate you to do x.

Including -- very relevantly for many people here -- huge incentives given to creating wealth via capital gains relative to creating wealth via salaried employment. I mean, memo from Congress to you: if you either a) make a business then sell it or b) invest in a retirement account, we will literally let you keep a few million more of your own money than we would have otherwise.

Re: The Tax Haven That's Saving Google Billions

#69

Post by gaius »

camiller wrote: post #52
gaius wrote: post #9

Earlier quoted context omitted.

Because countless global companies don't claim to be "not evil". Anyone Google hires in the UK (up 'til now anyway) has been educated at the expense of the taxpayer, for example. If someone breaks into their offce, the police will show up to investigate. Why shouldn't they pay their fair share?

Yes, and those taxpayer educated employees go on to pay income tax...rather than drawing welfare (or whatever you call it in the UK). In general the better the education, the higher the pay and the greater the income tax revenue from those employed individuals.

Google is in the UK at all because we are a stable, developed economy with a well-educated workforce, good infrastructure and high consumer spending. It could pay no tax at all if it relocated all its operations to Somalia where there is no government. But it stays, why? Because it is in its advantage to do so. To take but not give, that counts as a parasite in my book.

Fortunately we have a government now that ain't gonna stand for no jibba jabba.

Re: The Tax Haven That's Saving Google Billions

#70

Post by froydnj »

dangrover wrote: post #38

Startup idea: Company that cheaply sets up individuals/small companies to evade taxes in the same way big corporations do. You pay a subscription fee or something and they fill out the returns and set up a PO Box in Bermuda or whatever.

Seriously! Reading the article made me think, "wow, trying to piece together where companies go and who owns what sounds like fun!" (No, I'm not a lawyer.) Certainly sounds like an optimization problem where a computer could do an especially good job (assuming that you can represent everything efficiently).
Post reply on HN