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The Tax Haven That's Saving Google Billions

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Re: The Tax Haven That's Saving Google Billions

#101

Post by notahacker »

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…

The NHS employs a lot more people than Google and carries out research and development into saving people's lives. Sure, what Google does is great, but I'm really not convinced that thinking up ever more creative outlets to display targeted advertising is necessarily a better outcome for society than spending the money on the UK public sector, which has many worthwhile projects of its own. I'm going to go out on a limb here and say that sometimes multimillion sums are better spent on schools and hospitals than buying startups to wind up (big companies, like governments, have a tendency to overpay and make some blunders). The original article pointed out that Google owed its very existence to that paragon of state-sponsored inefficiency: the research university.

Calling it "evil" to carry out their fiduciary duty by legally shifting tax burden to the less well-off might be a stretch, but it's equally a stretch to suggest that we're better off because Google pays less tax. It's not as if they'd be dirt poor if they paid a tax rate comparable to that of profitable startups...

Re: The Tax Haven That's Saving Google Billions

#102

Post by yummyfajitas »

borism wrote: post #59
yummyfajitas wrote: post #55

Earlier quoted context omitted.

Um, Ireland had a big property bubble, which is the cause of their current troubles. High corporate tax rates didn't prevent a property bubble in the US or Spain, why would they have prevented one in Ireland?

Um, Ireland's structural problems are not limited to property bubble? Perhaps it's the symptom, not the cause?

Ok, you tell me. Why do you believe low corporate taxes are the cause of Ireland's problems?

Before making your argument, keep in mind that 12.5% of something > 33% of nothing.

Re: The Tax Haven That's Saving Google Billions

#103

Post by duke_sam »

DougWebb wrote: post #35
duke_sam wrote: post #7

Earlier quoted context omitted.

As the article points out they have an obligation to maximise profits. If there was a way to cut your tax rate from 20%+ to less than 5% and they didn't use it, it would be a breach of their duties. It's amusing to see how effective industry lobbyists have been in shutting down any reform that would close these loopholes. Lets talk about slashing entitlements but completely stonewall any attempts to get corporations…

I've got an obligation to maximize profits too: an obligation to support my family. But I don't have the resources Google does to set up complex income shifting tax avoidance schemes, and for that I'm heavily penalized by paying a much larger share of my income in taxes than a company like Google does. If these big companies want to have the rights and privileges that citizens do (treated as legal entities, freedom o…

But individuals do take advantage of tax loopholes. What you are talking about is that entities with more money have more options on how to minimise the amount they give to the government.

Re: The Tax Haven That's Saving Google Billions

#104

Post by roc »

awakeasleep wrote: post #91
yummyfajitas wrote: post #50

Earlier quoted context omitted.

Most of their tax money would not be spent on the specific items you describe. For every $100 google spends in taxes, roughly $16 will be spent on education (mostly education for underachievers who would never work at google), $4.90 will be spent on transportation infrastructure, $0.30 will be spent on basic research and $0.1 will be spent on communications infrastructure. On the other hand, for every $100 google pay…

What you say is true and I think you both make good points. When someone above asked "Why would Google want to pay a higher tax rate?" I thought, they would if it was in their best interest- I think we all agree on this. Now here is the crazy part of my post- A company like Google which could conceivably bring in billions of dollars by changing its tax setup, should have some bargaining power . I don't think anything…

What do you think lobbying is?

Re: The Tax Haven That's Saving Google Billions

#105

Post by ataggart »

ced wrote: post #51
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…

why wouldn't any international business do whatever it could legally do to minimize its taxes? As a lawyer, what's your perspective on lobbying? If the laws are ultimately chosen by the companies and the wealthiest, then I don't agree that "anything legal is fair".

>If the laws are ultimately chosen by the companies and the wealthiest...

At least with respect to the US, politicians are still needed to pass bills into law. The solution to your concern falls out of the simple realization that politicians can only sell the powers they have been delegated by the people. Grant them the power to make and break whole industries, and don't be shocked when those potentially affected come calling.

Re: The Tax Haven That's Saving Google Billions

#106

Post by patio11 »

tyn wrote: post #75
pg wrote: post #17

Earlier quoted context omitted.

Is it ethical to avoid paying tax as an individual? Many would say no. Do you mean avoid (by legal means) or evade (by illegal means)? Any government that uses tax incentives to affect citizens' behavior is saying it's ok to avoid taxes. If they promise your taxes will be lower if you do x rather than y, they're counting on your desire to avoid taxes to motivate you to do x.

Using tax havens is certainly not one of these cases.

You probably mean "tax haven", which is a rhetorical slight-of-hand to suggest that jurisdictions competing for attention via tax rates are somehow enticing people to sin. Competing via tax rates is just another way of enticing people to behave differently. Some people are under the impression that this happens only internationally. This is incorrect.

One of the healthiest features of the American experiment is a federal system where you have a broad spectrum of options in terms of tax rates versus social services. People (and companies) can, and do, pick legal regimes which optimize for the outcomes they find important. You may have heard people sort of like living in California, especially if they work for political subdivisions of it: that comes at a price -- you'll pay a gobsmacking amount of money in taxes relative to a similarly situated individual in Texas. (I managed to pay California several hundred dollars in taxes last year and I don't even live there. Yay, hotel tax.)

Competition among governments internationally is also healthy, for much the same reason. The market in tax and legal protection encourages governments to not just expropriate all the surplus from their wealth-creating constituents.

Re: The Tax Haven That's Saving Google Billions

#107

Post by dennisgorelik »

pragmatic wrote: post #47

This story resonates because of the hypocrisy. http://www.google.com/intl/zh-CN/corporate/responsibility_en... "Look at how great we are" type giving: http://www.prnewswire.com/news-releases/the-brin-wojcicki-fo... We hear corporate leaders (Gates, Brin, et al) lecture on social responsibility, yet they undercut the very structure of society by skirting tax laws. How will we build universities, roads, public infrastr…

Are you implying that giving money to politicians to spend is the most socially responsible act possible?

Re: The Tax Haven That's Saving Google Billions

#108

Post by adbge »

Retric wrote: post #76
lionhearted wrote: post #45

Earlier quoted context omitted.

> What if my income is $250 million? It still evil for the government to claim a percentage of that to provide services? To make $250 million honestly, you'd have to produce value far in excess of $250 million. And yes, taxing people for producing value with their own labor is wrong to me. This is not an argument that all taxation is bad. You need taxes to run society. But taxing earned income seems wrong to me - the…

Edit: Fixed, sorry had a bad copy and paste. You sit at home and come up with a great new piece of software that’s worth 250 million and sell it IBM. Why should you pay more taxes than the bum sitting at home next door? After all you did not use land or resources protected by your countries military and police forces. You did not use public infrastructure (roads, bridges, dams) or government backed institutions (bank…

> PS: If you disagree you can always leave and renounce citizenship.

I see this argument all the time: "If you don't like it, leave." While that's always an option, I think it's disingenuous to suggest that's the best option or even a reasonable one.

This is a democracy! You can affect change in your government. Get out there and vote, run for office. You don't have to just lie down and accept things the way they are.

Re: The Tax Haven That's Saving Google Billions

#109

Post by philiphodgen »

(I do this stuff in my day job).

Leave aside the moral outrage and any sentence that has "should" in it. You're not being rigorous in your analysis.

Next, think of the tax code as a giant bucket of Lego pieces. Google - and many other multinationals (including very small startup tech companies of the type that spring from the loins of YC) - simply assemble the Lego pieces as they choose.

Looked at as a strictly engineering exercise? No big deal. Hire better engineers (people like me) and get better results (cooler tax-Lego structures).

OK, put on your moral outrage hats again. We are finished with the tax engineering. Let's move on to the social engineering. Because that is what we are talking about when we say "X _should_ pay more to support government functions.". Except for a few people we will have general consensus that a government is good and services need to be paid for. It's just a giant "Not out of my wallet!" game now. Sometimes logic, sometimes "Think of the children," sometimes whatever argument you can muster. All of these devices are used to deflect the tax collector's attention to someone else's wallet.

That is how I look at this topic. And from this perspective I derive two conclusions:

- if you don't like the way multinationals create their Lego structures, change what is in the bucket of Lego pieces. That is the job of Congress, not Google.

- if you plan to change the laws, expect the argument to devolve quickly to uninformed "think of the children" arguments because politics is purely that. No A/B testing is done. Statistical analysis is bent to prove a point, not looked at dispassionately to optimize decisions.

Two last points.

- Every dollar Google makes will eventually go out to employees, vendors, and the government. (At the moment they don't pay a dividend, so the shareholders do not get anything directly). A corporation is not some giant Jabba the Hutt that grows bigger to infinity. It is ultimately just a money collector and distributor.

- the particular game they are playing in fact acts as a net revenue transfer mechanism from the US Treasury to the Irish government. I will have to find the article that describes this so clearly. I'm on my phone right now in downtown LA about to give a speech in a few minutes. I'll be back. (Heh. What a disappointment he turned out to be for California).

Re: The Tax Haven That's Saving Google Billions

#110

Post by Travis »

adbge wrote: post #83
Anechoic wrote: post #71

Earlier quoted context omitted.

run amazing free services (search, Gmail, Google Earth, Google Maps, Google Finance, Google News, Google Voice, Google Reader, Feedburner, many many others). Also, they're internally investing in energy and robotics like the auto-driven cars thing None of those products/services would be possible but for the government spending taxpayer money to develop the infrastructure behind those services (the internet, roads, G…

> None of those products/services would be possible but for the government spending taxpayer money to develop the infrastructure behind those services (the internet, roads, GPS, etc). I'd argue that the infrastructure would have been built regardless.

Perhaps the infrastructure would have been built, but I think you'd be surprised at the amount of basic fundamental research the government does that enables the infrastructure. Most corporations don't do what the US Feds call "R06" research, meaning there is no current application for the results. Pure research, others might call it.

My current field, public health, is an example. The US Gov't spends billions into research that doesn't lead to tangible products or services. But without it, we wouldn't know that cigarettes are bad, or that heart disease is correlated with red meat consumption.

There are lots of non-infrastructure advantages that exist only because the government has tax money.

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