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The Tax Haven That's Saving Google Billions

businessweek.com

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Re: The Tax Haven That's Saving Google Billions

#121

Post by calloc »

gaius wrote: post #9
jbooth wrote: post #3

From the article: "Google's practices are very similar to those at countless other global companies operating across a wide range of industries," So, why's the article about Google? Shouldn't the article be about "countless global companies" bilking us for billions? I'm astonished at the lack of outrage on this issue every time it comes up.

Because countless global companies don't claim to be "not evil". Anyone Google hires in the UK (up 'til now anyway) has been educated at the expense of the taxpayer, for example. If someone breaks into their offce, the police will show up to investigate. Why shouldn't they pay their fair share?

So? Then the UK needs to close the loopholes that allow Google to operate this way.

Google is not obligated in any way shape or form to pay more for taxes if there are rules and regulations that state they can operate their business in a certain way that allows them to not be taxed for that amount of money.

As a socialist I don't agree with that (I am from Europe), and I wish they did pay more taxes as it would certainly help the various governments there provide social services, at the same time I can definitely see that Google who is accountable to its shareholders and has to make as much money as possible is going to use the loopholes to keep as much money and not have it taxed.

Re: The Tax Haven That's Saving Google Billions

#122

Post by gaius »

MalUK wrote: post #99
lionhearted wrote: post #16

Earlier quoted context omitted.

> 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…

Why is England mentioned in this comment? Google Ireland is based in the Republic of Ireland, which is not related to England.

Because Google uses Ireland to avoid paying tax on revenues earned in England.

Re: The Tax Haven That's Saving Google Billions

#123

Post by HardyLeung »

As always, Google did an excellent job making money left and right. You gotta give them credit for that.

On the other hand, they are a bit "disingenuous" (Jobs' favorite word to describe Google) about their mantra, as ultimately this profit is made at the expense of American citizens (lower tax revenue). Why does it matter? Well it matters because they (tangibly and intangibly) benefited greatly then and now from the "Do No Evil" mantra, and they should accept that it comes at the price of people holding them to a higher standard. It is "Do No Evil", not "Do Less Evil" or "Do No Evil When Convenient".

Re: The Tax Haven That's Saving Google Billions

#124

Post by brianbreslin »

The first thing that popped into my head after reading this was "That is straight up gangsta" . Honestly I don't fault them for doing the most allowable under the law. Hat-tip to google's army of accountants and CFOs for figuring out these massively profitable loopholes.

Re: The Tax Haven That's Saving Google Billions

#125

Post by SeamusBrady »

MalUK wrote: post #99
lionhearted wrote: post #16

Earlier quoted context omitted.

> 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…

Why is England mentioned in this comment? Google Ireland is based in the Republic of Ireland, which is not related to England.

Whoops! Well spotted. Somebody committed a political faux pas there. All these wet rainy island nations in the North Atlantic tend to blur together obviously...

It is interesting for me as an Irish person to see this brought up as our government (a sorry lot) are under huge pressure to keep jobs and money in the country. Putting this under the spotlight is the last thing they need. Our economy is in a pretty poor state.

Re: The Tax Haven That's Saving Google Billions

#126

Post by nhebb »

elai wrote: post #86
nhebb wrote: post #57

Earlier quoted context omitted.

I can't speak for others, but my alarm wasn't with Google. Instead it was with a tax system that allows these kinds of loopholes. When people talk of expiring the Bush tax cuts for those making over $250k, my jaded response is that it will probably only affect those that are well to do but not really rich. I think the really rich can afford tax lawyers that let them avoid substantial taxes via other loopholes.

You're talking as if the US should receive the revenues for this foreign sourced income (notice this is out side of the USA income, not internal US income). As if google is only mountain view, CA. And as if these corporations don't contribute hugely to their headquarter country in employing tens of thousands of people who pay generously harvested income, payroll, property and other taxes and spend the majority of the…

I see what you mean, but when I wrote the first sentence I was actually thinking of the the Drudge headline from yesterday that the UK planned to cut 500,000 jobs from the government payroll. Even though the Bush tax cut issue is US specific, it was meant as a general diatribe against the inequity of any tax system that favors the well-heeled who can afford tax expertise to skirt taxes. I'm not going to lie - it's personal. I worked for a company that was acquired by (Bermuda based) Tyco International, and the aftermath wasn't pretty. Ever since I've harbored a steep grudge against companies who use international tax havens.

Re: The Tax Haven That's Saving Google Billions

#127

Post by RickHull »

tow21 wrote: post #95
loumf wrote: post #53

Earlier quoted context omitted.

It's neither good nor evil. Google's board and executives are legally obligated to maximize shareholder value. Shareholders can sue otherwise. If governments want more tax, they should close loopholes and Google will comply with the law.

"Google's board and executives are legally obligated to maximize shareholder value. Shareholders can sue otherwise." Common fallacy. No they're not, and no they can't. See, eg http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1013744

Are you saying that a corporation does not have a fiduciary duty to its shareholders?

That paper just expresses a limitation of conclusions that can be drawn from a single case, Dodge v Ford.

Re: The Tax Haven That's Saving Google Billions

#128

Post by notahacker »

ataggart wrote: post #80
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... This is sloppy reasoning. Just because A contributed in some measure to B does not imply B could only have come about because of the contributions of A, nor does it imply that more of A will yield more Bs. Further, absent a parallel world in which such different choices were made, one could just as easily argue on eco…

Although Sebastian's original post stopped just short of doing so, it would be equally sloppy to suggest that Google's ability to come up with amazing free (but profitable) services was a consequence of their tax avoidance.

Re: The Tax Haven That's Saving Google Billions

#129

Post by Anechoic »

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.

I'd argue that the infrastructure would have been built regardless.

It would likely be very different than the relatively free/open roads, GPS and internet we have today.

The "internet" would likely be similar to the mesh of networks we had back in the '90's (eWorld/AOL, Compuserve, Prodigy, the proposed Microsoft Blackbird/MSN strategy) and who knows if they would have played well with each other.

Roads would be toll roads each with their own restrictions (and I'm sure some enterprising roadway operator would block self-driven cars or charge them higher fees because they good).

And does anyone believe that a privately developed GPS system would be anything but horribly expensive or unreliably? Just look at satellite telephone. Satellite TV and radio have more reasonable cost structures, but they're partially underwritten by advertiser fees.

Re: The Tax Haven That's Saving Google Billions

#130

Post by RickHull »

borism wrote: post #36
cperciva wrote: post #21

Earlier quoted context omitted.

Is it ethical to avoid paying tax as an individual? Many would say no. They might say that, but their actions -- buying from duty-free stores, contributing to tax-deferred retirement accounts, filing jointly with a spouse, and claiming every possible deduction -- suggest quite the opposite. There's a world of difference between illegal tax evasion and legal tax avoidance , and all indications point to what Google is…

We can argue what is legal or illegal, and whether something that is legal should be illegal etc for ages. The fact is that they pay 2% tax while most US based persons pay at least 10x that rate.

> The fact is that they pay 2% tax while most US based persons pay at least 10x that rate.

And this is Google's fault? If you don't like the outcomes that result from players playing by the rules, perhaps you should direct your ire toward the rulemakers rather than the players.

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