Spanish authorities raid Google offices over tax • Hacker News Board

Re: Spanish authorities raid Google offices over tax

#281

Post by bobwaycott » Thu, Jun 30, 2016, 7:26 PM UTC

mrschwabe wrote: post #249

bobwaycott wrote: post #229

Earlier quoted context omitted.

Profits would be unethical if they were derived from unethical business practices. This isn't difficult to imagine.

Okay fair point. Though I don't necessarily see the correlation to taxation. I assume what perhaps is being implied is that the money from taxation can be used for ethical or unethical practices (as oldmanjay points out). Yet that analogy skips how tax is only possible with profit, not to mention the fundamental issue of whether or not taxation of profit is ethical in the first place.

Well, your original question was in response to an assertion that a corporation has an ethical responsibility to its society. You asked what if the taxes are unethical, which strikes me as a bit silly at best. I only offered a suggestion to your second question of why certain profits would be considered unethical. The matter of the choices made by leaders who spend tax revenue is independent of levying, paying, and collecting taxes.

If you have an argument that describes how taxing profits is unethical in contemporary society, as they are legislated by elected representatives, I'm sure there are others beside me who'd love to read it.

Re: Spanish authorities raid Google offices over tax

#282

Post by DanBC » Thu, Jun 30, 2016, 7:26 PM UTC

refurb wrote: post #278

melenaboija wrote: post #111

I don't think there is a justification for big corporations to do what they do and they have to be pursued. I've been working for a bank in a tax haven in Europe and I've seen that financial engineering powerful people use has been a known and accepted tool for the governments for a while, and now that Europe is living a financial crisis governments start asking. These companies play in an absolutely different league…

Yes, but it's the gov't who decides what the actual tax laws are, right? The corporations are just following those laws. If the gov't wants to put an end to this behavior, they can. They just need to change the laws.

Government makes tax laws. Those laws are tested in court. Government tax departments tend not to prosecute for non-payment of tax unless it's a flagrant example of tax evasion, because court cases are complex and expensive. Prosecuting Google would take many years and be very expensive.

When a bunch of companies start misusing tax laws the tax authorities will tell them that it's wrong, announce how they'll regulate that bit of tax law in future, and reclaim a bit of unpaid tax. The companies can challenge it in court if they wish.

Non-payment of tax exists on a scale, with normal and expected tax planning at one end, probably legal (the accountants and lawyers claim it is) tax avoidance through to outright tax evasion.

Re: Spanish authorities raid Google offices over tax

#283

Post by bobwaycott » Thu, Jun 30, 2016, 7:27 PM UTC

cardamomo wrote: post #230

spdy wrote: post #209

Earlier quoted context omitted.

How can a tax be in this category?

"Taxation without representation."

Taxation without representation has not been an issue in America since 1776. Unless you're referring to multinationals lacking direct representation in foreign legislatures. At which point, it's fair to both consider that as a reasonable consequence of choosing to engage in business in other national jurisdictions, and to admit they undoubtedly have indirect representation.

Re: Spanish authorities raid Google offices over tax

#284

Post by erichocean » Thu, Jun 30, 2016, 7:28 PM UTC

defen wrote: post #164

AnthonyMouse wrote: post #109

Earlier quoted context omitted.

> It kind of is, though, isn't it? The online ad market is theoretically super efficient - if the market clearing price for an ad is $1, and then you add a 10% sales tax, it no longer makes sense to bid / pay $1 for that ad, knowing that you will be out of pocket $1.10. Instead you would bid about 90-91 cents, knowing that it would get marked up to $1 with tax. Net effect is that Google only makes 90 cents on that ad…

Is there a reason that tax couldn't be imposed on the buyer, collected by Google at time of "sale" (click through by customer on ad), and remitted to the government, regardless of buyer origin? In other words, if I live in Montana (no sales tax) and I pay Google to display ads in Spain, I don't see a good reason to not have to pay Spain's "sales tax" (or whatever we're calling it) on those ads. I don't see why it sho…

> Or am I not really paying the Spanish entity when I buy those ads?

I'm pretty sure you pay the entity in the country that you are located in, so the Montana rancher is paying Google USA. Basically, you need a corporate presence in most places in order to _sell_ to people in those places. People in Spain pay Google Spain to place ads _as far as I understand it_—I'm not an expert on EU tax regulations.

Re: Spanish authorities raid Google offices over tax

#285

Post by bobwaycott » Thu, Jun 30, 2016, 7:32 PM UTC

lostlogin wrote: post #273

oldmanjay wrote: post #216

Earlier quoted context omitted.

There are many ways a tax can be unethical. It may finance torture, invasion, and fomenting coups in undeveloped nations that lead to widespread suffering. For example.

To reply to a comment I can't reply to: spdy 7 minutes ago But this is not the context we are talking about here. Spain is part of the EU and the so called "1st" world. I'm not sure if you're being tongue in cheek or not, but the 1st world may have less repression and human rights violations but it doesn't have none. And member states have invaded other countries in recent memory, have been involved in torture, insti…

FYI: you can reply to any comment by clicking on the n [minutes/hours/days] ago link.

Re: Spanish authorities raid Google offices over tax

#286

Post by smokeyj » Thu, Jun 30, 2016, 7:38 PM UTC

HappyDreamer wrote: post #274

munificent wrote: post #215

Earlier quoted context omitted.

How does that thinking apply when you consider that companies actively lobby and work to affect the laws? Are you arguing that companies have a responsibility to change laws to maximize their profits? If a company could get a law passed that let them, say, remove all environmental restrictions, are you arguing that they should do that? Do their fiduciary responsibilities trump their social ones?

A super interesting question. If a company attempts to abolish environmental restrictions, in order to, say, get to sell food with carcinogenic substances, and in that way make more money — then one viewpoint can be, that the company attempts to make money by killing people. I.e. attempted murder. Therefore the executives and people at the company, responsible for lobbying / bribing politicians, in order to remove al…

So lobbying is the equivalent of murder.. but the party accepting the bribe.. that was entrusted to protect you from murderers.. should not go to prison?

Frankly, in this picture you've painted, I'm not sure what the point of this bribe accepting party is. This is like having a body guard that might shoot you if there's a higher bidder. The whole point of the body guard is to protect you from killers, but now he's shopping around for contracts on your head. It's almost like the State having a monopoly on violence is paradoxical to it's alleged end goal.

Re: Spanish authorities raid Google offices over tax

#287

Post by pipio21 » Thu, Jun 30, 2016, 7:39 PM UTC

kafkaesq wrote: post #156

wyager wrote: post #114

Earlier quoted context omitted.

Why are you blaming the companies for acting rationally, rather than the governments for creating absurd tax environments? I agree it's unfair, but I can't fault anyone for trying to legally minimize their tax burden. Tax law should just be simple enough that anyone can do it themselves.

I can't fault anyone for trying to legally minimize their tax burden. I think what you're missing is the fact that the Tax Office is pursuing Google for an apparently grounded belief that they were, in fact, acting illegally. (That is, making false representations as to the true functional roles of its local subsidiaries, so as to make its locally-generated revenue appear much smaller than it actually is, per a recen…

I believe you miss the small detail that "El Pais" and other Spanish newspapers and media are technically bankrupt because of Google.

Google and Facebook grew their profits by advertisements, traditional media (that did not innovate anything) lost all this revenue.

So they(traditional media) are terribly biassed against Google and make everything they can to harm the company. They destroyed Google News for example.

Re: Spanish authorities raid Google offices over tax

#288

Post by ori_b » Thu, Jun 30, 2016, 7:49 PM UTC

ransom1538 wrote: post #280

linkregister wrote: post #271

Earlier quoted context omitted.

I think the taxes Google, Apple, et. al. are avoiding aren't imposed by that U.S. Code. The profits are not earned by U.S. Corporations; they're earned by alien corporations. In order for this regulation to cover these alien corporations, large parts of precedent, legislation, and regulation would have to be repealed/rewritten. Intuitively, it feels bad. But until the profits actually come back to the U.S., the USG d…

"The profits are not earned by U.S. Corporations; they're earned by alien corporations." These alien corporations are then owned by proxy by US corporations, THUS a violation of 26 U.S. Code § 7201. It isn't a "it feels bad" thing, this is just a felony.

The argument that these large corporation's lawyers are putting forward is that the taxes aren't imposed on them by the tax code because the US government only taxes money when it is brought in to the US, and therefore, they aren't evading taxes.

Whether that's true or not is a task for the courts to decide, but considering that there is a long history of the US government not taxing overseas profit until it comes to the USA, I'd say that this is an indicator that the government has, to date, agreed with the corporations on this.

Re: Spanish authorities raid Google offices over tax

#289

Post by zardeh » Thu, Jun 30, 2016, 7:53 PM UTC

andrewprock wrote: post #265

hueving wrote: post #241

Earlier quoted context omitted.

>Your argument essentially invalidates that and supports a world where legal corruption is moral. No it doesn't. It implies that the correct fix is to eliminate tax loopholes, not attempting to guilt a corporation into paying more, which is about as effective as guilting the sun into cooling down.

Well, now your arguing "that companies should pay what amount to optional taxes" by closing tax loopholes.

They're no longer optional at that point.

Re: Spanish authorities raid Google offices over tax

#290

Post by developer2 » Thu, Jun 30, 2016, 7:55 PM UTC

dailo10 wrote: post #257

melenaboija wrote: post #111

I don't think there is a justification for big corporations to do what they do and they have to be pursued. I've been working for a bank in a tax haven in Europe and I've seen that financial engineering powerful people use has been a known and accepted tool for the governments for a while, and now that Europe is living a financial crisis governments start asking. These companies play in an absolutely different league…

There are multiple aspects at play here: 1. Fiduciary responsibility - Corporations have a financial objective to minimize their tax burden, in order to maximize shareholder value. Sure. 2. Legality. There are numerous loopholes that are technically legal. And it's remarkable how much gray area there is when it comes to tax law. This is why you have the big teams of lawyers to figure out how to best game the system a…

1. This is why capitalism built on "everything to maximize revenue for shareholders" is broken. Maximize revenue by generating more revenue, not by evading - or avoiding - taxes. If your company cannot remain afloat without dodging taxes, your business is not viable and does not deserve to exist.

2. The fact that you can "game the system" and remain squarely in the "legal" column makes the system broken.

3. Considering that fines are typically a fraction of what they should be, again the system is broken. Consequences should threaten the ability of a company to remain afloat, not be a slap on the wrist that doesn't even dent the bottom line.

4. You perform business in a country? Pay the taxes for all revenue factually originating in that country, not technically based on loopholes. If revenue originates from a customer/client/subsidiary in country X, you pay taxes in country X; you don't get to have customers in country X, but pretend like your business in country Y really took their money. Simple as that.

5. Exactly this. The fact that it is not intended, but is possible, makes the system broken.

Governments need to crack down on this sort of thing - HARD. The laws need to be rewritten from the ground up, but this will never happen because of another ugly facet of capitalism - at least in the US - lobbying. Also, self-interested politicians - how many of the politicians who could rewrite the laws have their own businesses that are avoiding taxes which implies a conflict of interest? Large companies that threaten to abandon doing business because state X or country X makes them pay tax? Farewell, we don't need you. This also applies to incentives, which some states are famous for. Individual states should not be competing for companies' business by reducing taxes or offering reimbursement programs.