They follow the letter of the law. If the law is bad, change the law, don't bash Google for managing it's tax liability cost effectively and accuse them of being evil.
The Tax Haven That's Saving Google Billions
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Re: The Tax Haven That's Saving Google Billions
#32Google 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…
Ethics aside, Google shouldn't seek to deprive nations of tax revenue because they benefit in no small part from that money. They hire employees educated with government money, buy research projects funded with government money, build data centers that depend upon public infrastructure, etc.
Frankly, without government money, Google would not exist.
By gaming the tax systems, they're not only flipping the bird to the ladder they stood upon to create Google, but they're strangling the future pipeline for the very government products they depend upon.
And people only call Google out for crap like this because they insist on running around claiming they "Do No Evil". They set the bar higher for themselves. If they didn't want it there, they should shut up about it already.
Re: The Tax Haven That's Saving Google Billions
#33I was going to leave a comment about corporate citizens not doing their fair share in America, but that got me thinking: should corporations pay tax? I'm not asking this rhetorically to make a point. Really, should they? I would imagine that whatever profits are passed along to shareholders are taxed as capital gains. So, while it is a great headline to say Google pays 2.4% corporate tax, might it also be fair to say…
Yeah, I'm not familiar enough with tax law to know the details of tax laws. I'm sure they're terribly written. Especially in the United States. We need desperate tax reform. Really it ought to be the first place we look for solving the deficit: closing loop holes and raising taxes. But if those two words are put in the same paragraph as each other -- "raise" and "taxes" -- there's mass panic.
Re: The Tax Haven That's Saving Google Billions
#34Earlier 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…
Well, it's up to England's citizens to change the efficiency of England's government. Google is doing great things. By but dodging its taxes, it is forcing ordinary citizens to pay more. Or make do with less. It doesn't matter whether it would do better with the money. I think I could do better with my tax money than the US government. But then, that's not my choice to make. My job is to work to make sure that the US…
> By but dodging its taxes, it is forcing ordinary citizens to pay more. Or make do with less.
See, I'd disagree with you and say the opposite. I think England taking money from Google would mean less infrastructure and research out there in the world, meaning common citizens would be forced to pay more for services instead of Google's free services, or make do with less.
> I think I could do better with my tax money than the US government. But then, that's not my choice to make.
I believe it should be. Really, I mean that, I think taxes on productive labor are evil. Really, actually, unmitigated evil. I'm not against taxes, I'd actually be in favor for high property taxes divided split between federal, state, and local, which would encourage economy of space, reduce waste, and discourage real estate speculation while encouraging development. High taxes are okay. But taxing earned income, no way. Demanding a percent of honest labor to me seems no different than claiming ownership over a percent of a man. I think it's tyranny, and that in the future people will look horrified at income taxes the way we look at feudalism, serfdom, slavery, and other forced claims over a man's labor. But I understand I'm currently in the minority on that point of view.
Re: The Tax Haven That's Saving Google Billions
#35What was my tax rate again? Oh yes, somewhere around 40%... Nice to see that everyone is doing their share.
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 of speech through political contributions, etc) then they should have to play by the same rules and with the same encumbrances.
Re: The Tax Haven That's Saving Google Billions
#36Earlier quoted context omitted.
Because Google have a public image of behaving ethically. Everyone expects banks and evil multinationals to do this kind of thing. Is it ethical to avoid paying tax as an individual? Many would say no. But when a company does it, they lay their blame on the shareholders and the market. So the more outrage about this subject, the better. Our governments can either raise taxes or lower taxes. But they shouldn't let ind…
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.
Re: The Tax Haven That's Saving Google Billions
#37What was my tax rate again? Oh yes, somewhere around 40%... Nice to see that everyone is doing their share.
Unless you made a shitload of money I highly doubt your effective rate was 40%. The rate on the last x% of your money might have been taxed at 40% but most places have a progressive tax structure. Deductions should lower the effective rate further.
I'm speaking for the US, by the way.
Re: The Tax Haven That's Saving Google Billions
#38Startup idea: Company that cheaply sets up individuals/small companies to evade taxes in the same way big corporations do. You pay a subscription fee or something and they fill out the returns and set up a PO Box in Bermuda or whatever.
Re: The Tax Haven That's Saving Google Billions
#39In Ireland, these kinds of tax breaks are one of the foundations of our economy. They aren't viewed as a way to give a hand out to the big companies, but as a way to create jobs. This article mentions that 2,000 people are employed in Google Dublin. Given Microsoft, Amazon, Intel, IBM and Sun also operate, there's easily 10,000+ people employed thanks to our low tax rate. There are only 1,000,000 people employed in I…
I hope you guys can find other means/ways to create jobs. I live in Vancouver where hi-tech companies receive generous amount of SR&ED (Science Research and Education) grant. Let's just say that it was a good thing for short-term but not-so for long-term.
Re: The Tax Haven That's Saving Google Billions
#40Earlier quoted context omitted.
Agreed, I think Goldman Sachs has their effective rate down to less than 2%.
I had a hard time digesting this claim, I looked up on Google and found this: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a... In 2008, GS's effective tax rate was 1%!
Why it's so hard to digest this? GS is so successful and so hated for certain reasons, and that's one of them.