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How does Google pay 2.4%?

cameronkeng.com

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Re: How does Google pay 2.4%?

#41

Post by mbesto »

camz wrote: post #36
latch wrote: post #25

Anyone interested in this will also be interested in learning about IKEA: http://www.economist.com/PrinterFriendly.cfm?story_id=691913... And, more recently, some details about how they do it: http://www.ft.com/intl/cms/s/0/2437643c-2985-11e0-bb9b-00144...

I've actually been asked about IKEA in the past as well. The crux of the issue is that IKEA is the largest single employer and GDP powerhouse of Sweden. So, the country has been more than understanding of their "tax plan." The founder of ikea essentially owns everything through a charity and avoid all taxes for effective purposes.

Yup, I have a number of Swedish friends. When I mention "That guy [Kamprad] is a crook" they all say "But he [IKEA] has done so much for the economy and providing jobs for Sweden."

Re: How does Google pay 2.4%?

#42

Post by a3_nm »

joshfraser wrote: post #38

Why hasn't someone created a company that handles this setup for small to midsize companies? Think of it as the Paychex for legal tax evasion. Their clients could all share the same legal addresses in Ireland and the Netherlands. They could keep up with the shifting tax laws and take care of opening all the appropriate banks accounts and filling out the right forms. Of course, the loopholes should be closed, but unti…

Actually, making it easy to exploit loopholes is probably a good way to ensure that they are closed. (Possibly leaving more subtle ones open...)

Re: How does Google pay 2.4%?

#43

Post by recampbell »

yummyfajitas wrote: post #32
lbarrow wrote: post #16

Fixing this sort of loophole should be far higher on Congress's list of priorities than it is now. There is no reason why a massively profitable corporation like Google should pay so little in taxes when poor Americans are nickel-and-dimed with sales, payroll and income taxes.

The problem goes far beyond Google Ireland and Google Netherlands. What about Tata, Reliance, Baidu and Guinness? None of them pay their fair share to the US government. Something must be done about these evil corporations which exist outside the US, don't bring money into the US, do no business in the US, and pay no taxes in the US!

Would google exist if not for investments in education and r&d made by US taxpayers over the past 50 years?

Re: How does Google pay 2.4%?

#44

Post by ced »

mahyarm wrote: post #8

If 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…

the ~$100k not living in the USA tax deduction that the US gives you

Could you provide more details? I tried Googling for it, and I could only find:

You can also claim an additional exclusion from your U.S. taxes in excess of the $91,500, if the rent, utilities, etc. you pay on your residence abroad and other living expenses exceed a standard amount (which is currently approx $13,300 per year) established by the IRS. This exclusion only comes into play when your earnings are in excess of the $91,500 foreign income exclusion.

Is this it?

Re: How does Google pay 2.4%?

#45

Post by camz »

ced wrote: post #44
mahyarm wrote: post #8

If 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…

the ~$100k not living in the USA tax deduction that the US gives you Could you provide more details? I tried Googling for it, and I could only find: You can also claim an additional exclusion from your U.S. taxes in excess of the $91,500, if the rent, utilities, etc. you pay on your residence abroad and other living expenses exceed a standard amount (which is currently approx $13,300 per year) established by the IRS.…

Yes that was what we were discussing.

Re: How does Google pay 2.4%?

#46

Post by gvb »

Simple. They pay accountants a substantial portion of the taxes not paid.

The actual amount any country can tax it citizens and corporations is a complex relationship between its own tax laws, every other country in the world's tax laws, and the cost of the tax lawyers that figure out how to shuffle funds around to minimize their tax liability.

When politicians say "we will close this loophole and collect $xxx MM more in taxes" my BS meter pegs. There is not going to be a 1:1 relationship between a loophole's current deduction and collected taxes if that loophole is closed. There will be some increase in collected taxes (presumably), but people will minimize their taxes using different "loopholes" so the "recovered taxes" will never be as much as the politicians sell it as.

Re: How does Google pay 2.4%?

#47

Post by mckoss »

Our congressional representatives are corrupt, doling out tax breaks to wealthy corporations, while ordinary people are left to pay high tax rates on ordinary income. I think Google should be ashamed to be part of this corrupt system.

It's BS to say that they owe it to their shareholders to try to defraud the federal government of as much tax revenue as possible. They should instead be fighting for corporate tax reform and closing loopholes to make a level playing field and not rewarding "scumbag" corporations.

Re: How does Google pay 2.4%?

#48

Post by digisth »

Here's another idea: drop the corporate tax rate to 0% and raise income, high-end property (let's say houses that cost 2x the median in a particular area), and high-end consumption taxes (a "yacht tax".)

Another handy related idea would be to have a maximum income multiplier. Something like "the highest paid employee cannot make more than 20x the lowest paid in total compensation", so if you want to make one million a year, the lowest paid employee must be making 50k.

Re: How does Google pay 2.4%?

#49

Post by lliiffee »

digisth wrote: post #48

Here's another idea: drop the corporate tax rate to 0% and raise income, high-end property (let's say houses that cost 2x the median in a particular area), and high-end consumption taxes (a "yacht tax".) Another handy related idea would be to have a maximum income multiplier. Something like "the highest paid employee cannot make more than 20x the lowest paid in total compensation", so if you want to make one million…

I worry that the maximum income multiplier would have distortive effects. For example, if all my employees make high salaries, I would have a strong incentive to hire a company that provides janitorial services, rather than hire a janitor in house. (Which is presumably more efficient, as most firms do that in the current structure.)

Re: How does Google pay 2.4%?

#50

Post by nradov »

digisth wrote: post #48

Here's another idea: drop the corporate tax rate to 0% and raise income, high-end property (let's say houses that cost 2x the median in a particular area), and high-end consumption taxes (a "yacht tax".) Another handy related idea would be to have a maximum income multiplier. Something like "the highest paid employee cannot make more than 20x the lowest paid in total compensation", so if you want to make one million…

The "yacht tax" is proven to be a terrible idea; last time that was tried it basically killed the US boat industry. But otherwise I absolutely agree that we should eliminate corporate income tax and replace it with higher taxes on the individual owners of and creditors to those corporations. The government wouldn't be collecting any more revenue. This would encourage economic growth by avoiding the need for corporations to waste resources on tax planning.
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