The Tax Haven That's Saving Google Billions

Do you know any CEOs in the mold you're describing? I know... one. He was VP running one division of a company that was flagging, actually the whole company was flagging. He systematically promoted, trained, recruited, and refocused his division, until it became 80% of the company's revenues, and 2/5ths of the rest of the company was closed off. He massively grew the company. He took over for a very smart guy who, for whatever reason, was slowly running the company into the ground. The company literally wouldn't exist without him, and not many others have that skillset. He doesn't make $250 mil, but he's worth everything he makes. The company wouldn't exist without him.

> But he receives advice from countless people on those decisions,

Who get paid for that role.

> and countless more people make those decisions a reality.

Who also get paid for that role.

> Companies create value through the actions of hundreds if not thousands of people.

...who also get paid for that role.

> The decisions of its well paid leaders are more valuable than the actions of the average worker on the factory floor, but not that much more valuable.

Executives don't get paid a massive amount out of their boss's benevolence... they get paid because it's a brutally hard, rare skillset that not many people can do. A good executive absolutely can be the difference between making billions of dollars or the company failing and going out of business.

> So no, I wouldn't produce value far in excess of $250 million. I would be getting paid way too much.

You're either underestimating how hard being a good executive is or underestimating how much value a good executive can create. How much would it be worth to Yahoo to have had better leadership? How much has Steve Jobs brought in value to Apple? How much would Yahoo be willing to pay Jobs to take over? Would he be worth it?

> Second how long did you take advantage of government services before you became a productive citizen? ... How much interest do you think you're paying on that debt?

In every other sphere, you can't sign contracts to be indebted to someone before you're mature enough to commit to them. Because the government provided a service to a 5 year old doesn't mean the government can assert any ownership over the child later. Think about if Nike gave you shoes, clothes, and food when you were younger, and then said you owed something later. It's ridiculous. People can't sign their life away before they know what they're signing.

> Income tax is not the government claiming ownership over a man's labor, it is simply the minimum payment on a debt and the fee for continuing use of services.

I agree that you should pay for the services you use. But the government isn't charging for services, they're saying that when you do productive labor, then you owe them money. Big difference. I disagree with that. The debt notion is crazy to me, you can't go in debt as a minor for something you didn't agree to it. It used to be that if someone provided services to you as a child, you'd become indebted or enslaved to them, but thankfully we got rid of that. The fact that you can't sign contracts until you're old enough to understand them is pretty clearly established in Western thought, and a good thing.

Look, I'm not against taxes. Services must be paid for, agreed. Just not out of your labor. You should never incur a tax for doing productive, honest work with your hands or mind. It's immoral to claim a share of a man's labor by force. By all means, charge for services. But you own your life and your labor.

Edit: Gotta head out, the cafe I'm at is closing (11 at night here). If you're actually interested in discussion, feel free to email me - this has been good fleshing out my thoughts more clearly on paper, and I've enjoyed the discussion. Email's in my profile.

You just need to be consistent. Google has gotten a lot of benefits out of their "Do No Evil" motto; in my mind, they are held to a higher standard than GE or IBM.

Without going into what proportion of spending might directly benefit Google, I do agree with you. Return on tax revenue is nowhere close to 1:1 nor is it being spent optimally.

But Google does not decide how that money is allotted. They can't say "I'm only paying 25% because I only approve of 25% of expenditures." When they limit their exposure to 25% of what it might be (paying 4% instead of 20%) they're still cutting the desirable spending to 25% of its budget.

So they're still strangling those things they benefit from.

And if the giants generations before Google had done the same, one wonders whether the component technologies and projects and research that Google built from would have been part of the lucky 25% of spending that survived inevitable cuts?

Tax loopholes should be closed in law, Google and other corporations have a responsibility to their shareholders - why shouldn't they act within the law to save money?

I remember seeing a fun flow-chart of the IKEA tax avoidance scheme. Didn't have as amusing names as those used in this article though :)