How does Google pay 2.4%?
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How does Google pay 2.4%?
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Re: How does Google pay 2.4%?
#2Just searching "Double Irish" should explain it well enough.
Re: How does Google pay 2.4%?
#3Just searching "Double Irish" should explain it well enough. http://www.google.com/search?q=double+irish
I answered this question a while back for an HN member back on the day the article first hit the web. I have a bunch of questions from members that I've answered over the last year that I'm unloading onto my website. I figured its makes more sense economically if I shared my advice openly instead of giving it to individuals specifically.
The problem with googling this is that it only tells you the basic premise and fails to tell you the problems and the reality of actually applying these tax models.
As someone who's worked on these tax models in the past, I can tell you that its never as picture perfect as they make it sound. These companies are always getting audited even though these plans were drafted, approved and done by the "big 4 accounting firms."
It was a running joke that the big 4 plans it and the law firms would defend it. It was like we were self-generating projects for us to work on by creating a new "plan" every other year. The IRS always comes back and audits these clients.
Re: How does Google pay 2.4%?
#4With Double Irish slices of bread and Dutch cheese in the middle, the Dutch Sandwich "leaves no tax behind to taste".
Re: How does Google pay 2.4%?
#5There's a great slide from my "Taxes for Hax0rs" (SHDH 44) presentation http://www.transparentaccounting.org regarding the history of the Federal Income Tax. In a nutshell, the way it was originally written was meant to tax corporate income only and only the most wealthy Americans, not common folk.
One needed to make >= $4000/year in deflated 1893 dollars to even be eligible to need to pay any taxes. Not sure, but one computation I came up with (adjusted) puts that around 100K in today's dollars. Imagine making anything up to 100K tax-free.
The goal was always to tax corporations more heavily than people.
Today even the poorest Americans likely end up short more than 2.4 percent (effective annual rate) in tax payments when their employers "withold" earnings.
So when corporations go out of their way and spend a lot of money to accomplish tax avoidance, that seems kinda wrong.
Re: How does Google pay 2.4%?
#6Just searching "Double Irish" should explain it well enough. http://www.google.com/search?q=double+irish
I answered this question a while back for an HN member back on the day the article first hit the web. I have a bunch of questions from members that I've answered over the last year that I'm unloading onto my website. I figured its makes more sense economically if I shared my advice openly instead of giving it to individuals specifically. The problem with googling this is that it only tells you the basic premise and f…
its not like it was years ago when CitiCorp set up theri stock trading units in the Islands for a similar purpose..
Re: How does Google pay 2.4%?
#7There's a great slide from my "Taxes for Hax0rs" (SHDH 44) presentation http://www.transparentaccounting.org regarding the history of the Federal Income Tax. In a nutshell, the way it was originally written was meant to tax corporate income only and only the most wealthy Americans, not common folk. One needed to make >= $4000/year in deflated 1893 dollars to even be eligible to need to pay any taxes. Not sure, but on…
Ironically, corporate taxes these days generates less than 20% of the fiscal revenues for the government. Generally, 1040 individual taxes still make up the bulk of the taxes paid.
In addition, more than 35% of all taxpayers pay zero tax or pay no tax and get refunds. This number is constantly changing, especially recently with the economy. I've seen it go as high as 60%.
Lastly, when the government talks about corporate tax breaks and etc. Honestly, they barely matter anymore because we've essentially marginalized the revenue generated from corporations and businesses already. So, the amount of revenue and savings potential in the greater scheme of things is almost non-consequential.
Re: How does Google pay 2.4%?
#8If your not attached to the USA you can just move you and your business to a territorial based corporate income tax country (singapore, etc). Income not repatriated into the country and not generated from the country is tax free. If your an american citizen you'll still have to pay personal federal income tax to the USA, even if you don't live in the USA, and to your country of residence but you can work with that much better with the ~$100k not living in the USA tax deduction that the US gives you.
Re: How does Google pay 2.4%?
#9Earlier quoted context omitted.
I answered this question a while back for an HN member back on the day the article first hit the web. I have a bunch of questions from members that I've answered over the last year that I'm unloading onto my website. I figured its makes more sense economically if I shared my advice openly instead of giving it to individuals specifically. The problem with googling this is that it only tells you the basic premise and f…
its not like it was years ago when CitiCorp set up theri stock trading units in the Islands for a similar purpose..
Citi went farther. They did things like declare a particular desk in a skyscraper in NY to be legally in the Cayman Islands.
The IRS was not amused.
Re: How does Google pay 2.4%?
#10If your not attached to the USA you can just move you and your business to a territorial based corporate income tax country (singapore, etc). Income not repatriated into the country and not generated from the country is tax free. If your an american citizen you'll still have to pay personal federal income tax to the USA, even if you don't live in the USA, and to your country of residence but you can work with that mu…
That's a good point. If you're lover of travel or foreign countries, then there are a number of different countries or economic zones that are similar tax havens. Singapore, Hong Kong and etc are tax havens that don't take foreign sourced income. You only pay tax on income earned from the country.
Also, singapore and hong kong have much lower tax rates. You'd be able to take a tax credit on foreign taxes paid in the US 1040 individual tax (this calculation is a little awkward though) or you could choose to exclude 90k+ of income entirely from you 1040 but you'd lose the foreign tax credit.
You need make the calculation to see which is the better tax savings. Obviously, if you're earning less than 90k then you should use that. But, to get the 90k exclusion you must remain without the US territories for the majority of the year.