Google now pays more money in EU fines than it pays in taxes • Hacker News Board

Re: Google now pays more money in EU fines than it pays in taxes

#21

Post by arctux » Wed, Feb 06, 2019, 6:09 PM UTC

kodablah wrote: post #4

At the end of the day, Google probably doesn't differentiate the two very much as they're both costs of doing business. I would expect Google to work in its interest to reduce these impositions (taxes, laws+fines, etc) where they can, but we shouldn't pretend the punitive value of fines is more than a cost calculation to them. We also shouldn't pretend that the EU justification for fines is purely about citizen prote…

> We also shouldn't pretend that the EU justification for fines is purely about citizen protection, they see this as a "tax" as well (though that is of course not their primary motivation). Otherwise, they would work harder on non-punitive approaches towards combating the ills of Google and the like. One would hope education and encouragement of alternatives and other positive-leaning approaches might be prioritized over a gavel.

The fine exists to remove the profit gained from the illegal behavior, otherwise performing the illegal actions would have a positive expected value. The company is also required to provide a list of remedies to ensure that the behavior is not repeated.

As for "non-punitive" approaches, the encouragement of alternatives would have to be non-financial since state aid is barred under EU rules [0]. I suppose they could recommend alternatives, but if it were really that simple to avoid a consolidation of power in the tech industry we wouldn't have such monopoly/duopoly issues.

[0] https://en.wikipedia.org/wiki/State_aid_(European_Union)

Re: Google now pays more money in EU fines than it pays in taxes

#22

Post by chriswarbo » Wed, Feb 06, 2019, 6:14 PM UTC

hcnews wrote: post #18

ocdtrekkie wrote: post #12

This is hardly surprising given Google's tendency to evade taxes and exploit loopholes in taxation of international corporations.

So if Google paid more taxes than necessary (legal loopholes), there would be no fines (for bad privacy etc.)? That sounds wrong. I don't support the legal tax loopholes but don't think there should be much relation between legal taxes and fines for bad practices (unless ofcourse the bad practice is illegal tax evasion).

> So if Google paid more taxes than necessary (legal loopholes), there would be no fines (for bad privacy etc.)? That sounds wrong.

I doubt there would be no fines; but if Google were paying a "fair" amount of taxes then there would be less of an adversarial relationship with governments: huge fines would be like harming the goose that lays golden eggs.

With Google's current tax avoidance/evasion they're just a regular, tasty-looking goose.

Re: Google now pays more money in EU fines than it pays in taxes

#23

Post by arctux » Wed, Feb 06, 2019, 6:15 PM UTC

jplayer01 wrote: post #5

kodablah wrote: post #4

At the end of the day, Google probably doesn't differentiate the two very much as they're both costs of doing business. I would expect Google to work in its interest to reduce these impositions (taxes, laws+fines, etc) where they can, but we shouldn't pretend the punitive value of fines is more than a cost calculation to them. We also shouldn't pretend that the EU justification for fines is purely about citizen prote…

Works for me. If Google is happy to avoid taxes however they can, we should be extracting as much out of them as we can in other ways, such as fines. Not sure why we should be content with them not giving a shit about anything but themselves. Companies like Google only act out of pure greed. They don't respond to "positive reinforcement" and "education". They know perfectly well how to pay more in taxes, it's the def…

No. Fines exist to dissuade illegal behavior. The loopholes that Google (and Apple, and many other multinationals) should be abolished, and any tax evasion should be prosecuted. Antitrust fines do not exist to punish tax avoidance. They exist to penalize companies who use their size to prevent competition and distort markets.

I have many issues with Google's business practices, but punishing them is not worth throwing out the rule of law.

Re: Google now pays more money in EU fines than it pays in taxes

#24

Post by guitarbill » Wed, Feb 06, 2019, 6:17 PM UTC

simion314 wrote: post #19

ocdtrekkie wrote: post #11

Earlier quoted context omitted.

As much as I hate the painful wait to see action on these fronts, I understand the desire to be careful and cautious before potentially irreparably destroying a business. But the penalties need to affect the decisionmakers personally . If Sundar Pichai was risking jail time to abuse Google's power, you'd better believe it wouldn't happen.

It is complicated, imagine EU putting some american CEO in prison.

This isn't too far away from how it works for "proper" criminals like Roman Seleznev [0], so one can dream.

Presumably, this would involve the CEO travelling to Europe accidentally while a European arrest warrant was out on them (which would be negligent on someone's part). Since we have yet to see huge fines under the GDPR, let alone arrest warrants for not complying, this seems to be far off though.

[0] https://www.justice.gov/opa/pr/russian-cyber-criminal-senten...

Re: Google now pays more money in EU fines than it pays in taxes

#25

Post by flexie » Wed, Feb 06, 2019, 6:17 PM UTC

kodablah wrote: post #4

At the end of the day, Google probably doesn't differentiate the two very much as they're both costs of doing business. I would expect Google to work in its interest to reduce these impositions (taxes, laws+fines, etc) where they can, but we shouldn't pretend the punitive value of fines is more than a cost calculation to them. We also shouldn't pretend that the EU justification for fines is purely about citizen prote…

The EU doesn’t see fines as taxes no more than the US does.

The fiscal value of fines is not great. The commission can’t budget how may fines it plans on collecting and from whom. It’s completely different agencies that issue fines and do the budgets.

Re: Google now pays more money in EU fines than it pays in taxes

#26

Post by wallawe » Wed, Feb 06, 2019, 6:19 PM UTC

ocdtrekkie wrote: post #12

This is hardly surprising given Google's tendency to evade taxes and exploit loopholes in taxation of international corporations.

This refrain is so tiring. There exist tax laws. They follow laws and pay the taxes they are supposed to. You can dislike the tax laws on the books but to expect that a company is going to willingly pay more than the law requires is absurd.

Re: Google now pays more money in EU fines than it pays in taxes

#27

Post by snidane » Wed, Feb 06, 2019, 6:27 PM UTC

It clearly shows how the tax system based on taking a cut from profits is totally leaky and should be abandoned. It only results in endless cat and mouse game of tax consultants (the big 4) finding loopholes in such tax systems against governments trying to plug the holes, just with much smaller budget and efficiency than the tax-evasion consulting armies.

There are other models of tax systems. Some are even not production and consumption based (you want to maximize production and consumption for growth, not stifle it with taxes). For example land taxation proposed by single-tax movement or monopoly based taxation in general. Ie. for providing a company the privilege to be a monopoly on a market, it needs to pay a fee to those guaranteeing such privileges, which is the state.

For example big pharma lobbied for its monopoly and now it is super hard for competitors to enter the market. Let these companies pay a monopoly tax for such privileges.

Other example. Somebody appropriates for himself a valuable piece of land with oil deposits. He prevents others from utilizing that land. Let him pay for having that exclusive rights of use, since clearly the government is providing private property related services (police, courts and army to guarantee his property) for him that others (non-owners) are not getting.

Re: Google now pays more money in EU fines than it pays in taxes

#28

Post by ocdtrekkie » Wed, Feb 06, 2019, 6:31 PM UTC

hcnews wrote: post #18

ocdtrekkie wrote: post #12

This is hardly surprising given Google's tendency to evade taxes and exploit loopholes in taxation of international corporations.

So if Google paid more taxes than necessary (legal loopholes), there would be no fines (for bad privacy etc.)? That sounds wrong. I don't support the legal tax loopholes but don't think there should be much relation between legal taxes and fines for bad practices (unless ofcourse the bad practice is illegal tax evasion).

I was merely suggesting the "more fines than taxes" bar in this article was artificially low because of their artificially low tax rate.

Note that I am fully in support of the EU's fines for both Google's antitrust violations and their privacy abuses, and agree that they should have no bearing on taxation.

Re: Google now pays more money in EU fines than it pays in taxes

#29

Post by matthewmacleod » Wed, Feb 06, 2019, 6:32 PM UTC

sidibe wrote: post #13

The EU allows a couple of its countries to act as tax havens. Ireland and the Netherlands are probably pretty pleased that EU citizens seem to direct all their outrage at the companies that do the obvious thing instead of at their tax laws.

I'm not sure that's really true – the EU has been fighting the "Double Irish" arrangement for some time.

Re: Google now pays more money in EU fines than it pays in taxes

#30

Post by ocdtrekkie » Wed, Feb 06, 2019, 6:33 PM UTC

simion314 wrote: post #19

ocdtrekkie wrote: post #11

Earlier quoted context omitted.

As much as I hate the painful wait to see action on these fronts, I understand the desire to be careful and cautious before potentially irreparably destroying a business. But the penalties need to affect the decisionmakers personally . If Sundar Pichai was risking jail time to abuse Google's power, you'd better believe it wouldn't happen.

It is complicated, imagine EU putting some american CEO in prison.

I would be fine with the American government actually putting American CEOs in prison too. ;)

But even without the international extradition type problems, there are still a lot of problems, as we consider most of the wrongdoings these corporations are committing to be civil violations, and no matter how many people they harm, as long as they aren't treated as criminal, we can't put someone in jail for them.

I do feel this is a major problem though, as CEOs aren't realistically punished for corporate misdeeds that can cause massive, wide-ranging harm. Even if the CEO screws up badly enough to lose his job, he'll get a job being a CEO somewhere else.