The Tax Haven That's Saving Google Billions • Hacker News Board

Re: The Tax Haven That's Saving Google Billions

#211

Post by A1kmm » Thu, Oct 21, 2010, 7:25 PM UTC

lionhearted wrote: post #16

grellas wrote: post #13

Google is "flying a banner of doing no evil, and then they're perpetrating evil under our noses," says Abraham J. Briloff, a professor emeritus of accounting at Baruch College who has examined Google's tax disclosures. Maybe it is the lawyer in me, but why wouldn't any international business do whatever it could legally do to minimize its taxes? I understand that governments might want to consider these as loopholes…

> That seems absurd by free enterprise standards and I am genuinely curious to know why refusing to do this would be called "evil." When taxes come up, it tends not to be a well-thought, cohesive, pros-and-cons thing. It tends to be an emotional/identity thing. Some people think and almost always argue it'd be a good thing if companies gave more money over to governments. Me, I think it's very good for the world on e…

Company taxes are, in most parts of the world, levied on company profits, not company revenues. So if Google paid higher taxes, company expenditure would be the same, but dividends and / or share price would be lower. So the only point that still stands is 'giving liquidity to founders'; I'm sure the founders already have enough capital to bootstrap practically any innovative tech business they want.

Re: The Tax Haven That's Saving Google Billions

#212

Post by codexon » Thu, Oct 21, 2010, 7:27 PM UTC

tkahn6 wrote: post #185

notahacker wrote: post #170

Earlier quoted context omitted.

Which of the above services do you think wouldn't exist if Google avoided less tax? There's an opportunity cost of private companies paying less tax too - either someone else pays more tax which marginally decreases their ability to be productive and enterprising or something purportedly socially beneficial doesn't get paid for. Even coupled with inspired management, the profit motive doesn't ensure that an acquisiti…

Which of the above services do you think wouldn't exist if Google avoided less tax? You're going to have to explain to me how this is relevant. What Google is doing is legal which means that you're trying to make this an argument about ethics. My point is that Google provides real value to millions of people around the world and has the resources, both human and monetary, to make real progress in many areas of techno…

Google's only unique offering is search

All the other stuff, maps, email, translate, etc... were incremental improvements of already available and competitive free services.

You also neglected to list the dozens of flops that Google undoubtly spent millions, perhaps billions on. Remember Wave, Answers, Jaiku, Dodgeball, etc...? And how much of those billions of unpaid taxes went to buying out the competition and thus reducing the capitalist drive for improvement?

http://en.wikipedia.org/wiki/List_of_acquisitions_by_Google

Re: The Tax Haven That's Saving Google Billions

#213

Post by jacoblyles » Thu, Oct 21, 2010, 7:35 PM UTC

spoiledtechie wrote: post #12

karl11 wrote: post #5

What this should signal, is that the US should lower its corporate tax rate. Even just making it competitive with other developed nations would probably generate more revenue for the government. And though it would still be higher than the effective rate many companies pay with all these transfer schemes, it would make the hassle less worthwhile. However, what it will actually cause lawmakers to do is increase regula…

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.

What website are you reading? 35% is damn high by international standards. I read that US Corporate tax is the second highest in the entire world.

Re: The Tax Haven That's Saving Google Billions

#214

Post by jacoblyles » Thu, Oct 21, 2010, 7:36 PM UTC

ceejayoz wrote: post #48

nysauhem wrote: post #24

"The setup lowers Google's overseas tax bill, but it also affects U.S. tax revenues as the government struggles to close a projected $1.4 trillion budget gap." It's a ridiculous notion that any single corporation's tax contribution will put even the slightest dent in the budget deficit. Government spending is like gas in a vacuum, it will expand to fill whatever space you give it.

Google is hardly the only corporation doing this.

Government spending is up 100% over 10 years. Maybe someone should look into that.

Re: The Tax Haven That's Saving Google Billions

#215

Post by notahacker » Thu, Oct 21, 2010, 7:37 PM UTC

tkahn6 wrote: post #185

notahacker wrote: post #170

Earlier quoted context omitted.

Which of the above services do you think wouldn't exist if Google avoided less tax? There's an opportunity cost of private companies paying less tax too - either someone else pays more tax which marginally decreases their ability to be productive and enterprising or something purportedly socially beneficial doesn't get paid for. Even coupled with inspired management, the profit motive doesn't ensure that an acquisiti…

Which of the above services do you think wouldn't exist if Google avoided less tax? You're going to have to explain to me how this is relevant. What Google is doing is legal which means that you're trying to make this an argument about ethics. My point is that Google provides real value to millions of people around the world and has the resources, both human and monetary, to make real progress in many areas of techno…

We seem to be going round in circles here. As someone who has received healthcare and education for free courtesy of the UK government I find the earlier claim that this is of less value to me than a search engine and associated apps, even though I use them daily to be fairly ridiculous. Taking your arguments about us being better off with Google managing more money to their logical conclusion, would you prefer to pay your taxes directly to them, without any say in what they spend their money on?

Continuing to restate that Google provides a significant amount of value as acknowledged in my original post (and profiting directly from most of the value-adding-services to the extent that such services would continue to be invested in at a much higher tax rate) fails to defend the original bold assertion that "Anyone who thinks that England would do a better job with the money than Google hasn't been to England". As I'm a British citizen who has not only been to England but actually lives there and uses both Google and our government funded services, I feel I'm in a good place to dispute that claim.

Right now the principal problem with UK public services is a shortage of money; not a problem for Google and their profit-generating services. Google is not going to die if it takes them a little longer to generate shareholder return; people are going to die if they don't get hospital beds. Believing in the benefits to humanity from successful, innovative free enterprises != believing they and their investors should keep all the money.

Moreover even if one accepts the claim that Google and people smart enough to invest in Google are on average better at allocating resources equitably than the government I think it could be argued to be ethically dubious for them to pay lower tax rates than less profitable companies with equally ambitious and beneficial goals. Someone still has to foot the tax bill

Re: The Tax Haven That's Saving Google Billions

#216

Post by [deleted] » Thu, Oct 21, 2010, 7:39 PM UTC

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.

[deleted]

Re: The Tax Haven That's Saving Google Billions

#217

Post by codexon » Thu, Oct 21, 2010, 7:41 PM UTC

grellas wrote: post #13

Google is "flying a banner of doing no evil, and then they're perpetrating evil under our noses," says Abraham J. Briloff, a professor emeritus of accounting at Baruch College who has examined Google's tax disclosures. Maybe it is the lawyer in me, but why wouldn't any international business do whatever it could legally do to minimize its taxes? I understand that governments might want to consider these as loopholes…

> Maybe it is the lawyer in me, but why wouldn't any international business do whatever it could legally do to minimize its taxes?

It all comes down to ruining competition which is crucial for capitalism to improve the quality and decrease the cost of services for society. Do many startups have the money to hire a bunch of lawyers to find out the latest tax loophole and the money to setup multiple shell corporations?

I think not.

Re: The Tax Haven That's Saving Google Billions

#218

Post by tkahn6 » Thu, Oct 21, 2010, 7:43 PM UTC

marbletiles wrote: post #209

tkahn6 wrote: post #185

Earlier quoted context omitted.

Which of the above services do you think wouldn't exist if Google avoided less tax? You're going to have to explain to me how this is relevant. What Google is doing is legal which means that you're trying to make this an argument about ethics. My point is that Google provides real value to millions of people around the world and has the resources, both human and monetary, to make real progress in many areas of techno…

By adopting the "Don't be evil" motto Google makes this about ethics. If you say that you are going to hold yourself to an ethical standard, that means you will be judged by your ethics, not by your adherence to the letter of the law. But really, the continuing argument that because you like Google Maps it's therefore better that Google gets to keep all of its tax euros out of the hands of underfunded public services…

But really, the continuing argument that because you like Google Maps it's therefore better that Google gets to keep all of its tax euros out of the hands of underfunded public services is close to incoherent.

Unless you can show that those services are in the same sort of existential danger as high-end cancer treatment is in the UK, the argument is specious.

a. I did not say that Google shouldn't pay any taxes.

b. Whether you believe something to be 'underfunded' is a matter of perspective.

c. Not funding cancer research is not equivalent to not doing good or creating value.

I think you do have a point in that Google's slogan does make this about ethics. I still maintain that Google can do more good with more efficiency than any government.

Re: The Tax Haven That's Saving Google Billions

#219

Post by CWuestefeld » Thu, Oct 21, 2010, 7:43 PM UTC

joxenford wrote: post #178

tkahn6 wrote: post #153

Earlier quoted context omitted.

but it's equally a stretch to suggest that we're better off because Google pays less tax In absolutely no way is it a stretch to say that and I'm terribly surprised you have any upvotes. Are you aware of how many services Google provides for free that make my life (and probably yours) better? Google Search Google Maps Android Google Navigation (on Android) Google Patent Search Google Book Search (Working with librari…

To say any of these things have made anyones life better is quite a stretch. Has gmail improved your quality of life? Really? Choose your words carefully. Indoor plumbing and electricity made life better. Gmail has not. Your email was fine before Gmail. And Google should pay their F-ing taxes. I do.

Everyone that uses gmail (or any other Google service) does so because it's better (in some way that we can't know) than the alternatives. The very fact that people have chosen to use it rather than those alternatives means that it has made their lives better.

And Google should pay their F-ing taxes. I do.

By all accounts, Google is paying the taxes they're legally obligated to. If you don't like the way those obligations play out, then you ought to be talking to your legislators, the ones who are architecting byzantine tax systems. Their efforts to control our behavior, pander to buy votes, etc., by giving preferential treatment to some, is what created the problem.

Re: The Tax Haven That's Saving Google Billions

#220

Post by Andrew_Quentin » Thu, Oct 21, 2010, 7:44 PM UTC

barmstrong wrote: post #183

Has anyone thought of or seen a startup designed to bring these kinds of tax advantages to average citizens? There would be a real value in streamlining this legal process of creating shell companies or whatever is needed in some sort of mass market approach. It seems like the only people this is available to are big companies or high net worth individuals who can afford expensive one-on-one consultation with account…

Tax law changes all the time. It is a cat and mouse game. Loopholes are closed, lawyers see the statue which closed them and come up with other loopholes which are closed...

A start up could possibly hire such lawyers to do what they do for national for the general public, but possibly each individual has his own requirement and tax lawyers are quite expensive.