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How Google Avoided Paying $60 Billion In Taxes

CmdrTaco posted more than 3 years ago | from the just-not-good dept.

Google 1193

bonch writes "Google only pays a 2.4% tax rate using money-funneling techniques known as the 'Double Irish' and the 'Dutch Sandwich,' even though the US corporate income tax is 35%. By using Irish loopholes, money is transferred legally between subsidiaries and ends up in island sanctuaries that have no income tax, giving Google the lowest tax rate amongst its technology peers. Facebook is planning to use the same strategy."

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1193 comments

Headline Is So Very Wrong (5, Informative)

eldavojohn (898314) | more than 3 years ago | (#33975442)

How Google Avoided Paying $60 Billion In Taxes

Yeah, unless you read the article that says:

Such income shifting costs the U.S. government as much as $60 billion in annual revenue, according to Kimberly A. Clausing, an economics professor at Reed College in Portland, Oregon.

That's $60 billion total per year. Not just from Google but from every American business using these tax loopholes (Microsoft and Facebook included). The article clarifies:

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.

Emphasis mine. So you can see that it's on average a billion a year that Google saves doing this. Not $60 billion. Do I still feel like they're shafting me? Yes. But not 15% of their stock market worth. That's just unimaginable. Here's a bigger survey of companies using these loopholes with more details [bloomberg.com].

Re:Headline Is So Very Wrong (5, Insightful)

Pojut (1027544) | more than 3 years ago | (#33975480)

The widespread use of loopholes by companies/"rich" people always really pissed me off. They constantly complain so much of their wealth is being taken, yet they pull crap like this.

I would bet you that if my wife and I tried to do something similar, we would almost certainly be "caught". I don't know if loopholes are due to the complexity of the system, or because the big guys can afford to pay folks who know how to exploit them...but regardless of the reason, it's fucked up.

Re:Headline Is So Very Wrong (4, Insightful)

binarylarry (1338699) | more than 3 years ago | (#33975518)

Only poor people pay taxes.

Re:Headline Is So Very Wrong (5, Insightful)

Flipao (903929) | more than 3 years ago | (#33975670)

Yes, and a good chunk of them are rallying on the streets every day to try and keep it that way.

Bless'em

Re:Headline Is So Very Wrong (0, Insightful)

Anonymous Coward | more than 3 years ago | (#33975754)

I guess I'm poor then. I also guess that all poor people that actually turn a profit from government programs, as well as the taxes returned at the end of the year are still in your list.

I don't begrudge people from getting assistance when they need it, but I do begrudge people from demanding that the rich pay even more taxes.

With that said, I do begrudge the rich (companies included) that use tricks to hide their money from the government. That's what this is: hiding money. It should be illegal.

Tax rates should be lower. And those evading taxes should be fined and corrected. Microsoft, Facebook, and Google included. I wonder how well the current administration will like to hear this considering how deeply embedded Google is with them. This will almost certainly be ignored, or only referred to generically.

Re:Headline Is So Very Wrong (3, Insightful)

interval1066 (668936) | more than 3 years ago | (#33975796)

"Only poor people pay taxes."

If counting "taxes" paid by sales/service excises, that may be true, although the rich don't get out of these taxes either. The average tax return from people under the median income usually garners a rebate. That means they get money back they didn't pay in to the system. The people getting shafted are the medium income earners, not the poor. Its called "wealth redistribution". And its bullshit. Companies/corps usually pay low taxes because state and local governments make deals with them to come into the municipality and provide jobs, not simply because of loopholes. The real question you should be asking yourself is; why do we (and I mean everyone, rich and poor alike) need to pay so much to a government that simply wastes that money, for the most part. Vilifying people for being successful may feel good, but only up to the point that you aren't successful. This is assuming most people aspire to be successful, of course. If you're happy staying poor and grousing about "the rich", then I don't know what to tell you. Enjoy being poor I guess.

Re:Headline Is So Very Wrong (1)

operagost (62405) | more than 3 years ago | (#33975854)

Truly impoverished people don't pay any taxes. In fact, they get free money from the Treasury if they use the EIC.

Re:Headline Is So Very Wrong (4, Insightful)

characterZer0 (138196) | more than 3 years ago | (#33975528)

Another option: loopholes are there because the rich bribed government officials to put them there.

Re:Headline Is So Very Wrong (5, Insightful)

XanC (644172) | more than 3 years ago | (#33975564)

The US is one of the few countries, maybe the only one, which charges domestic taxes on income earned overseas. Everywhere else, that money is taxed only once, but here we expect it to be taxed twice.

It's like the politicians are trying to get them to play accounting games, or simply pick up and leave, in order to have something to decry.

What a ridiculous system. It's a wonder we have any multinationals based here at all.

Re:Headline Is So Very Wrong (1)

icebike (68054) | more than 3 years ago | (#33975710)

I believe the US does not charge tax on income you earn over seas and never bring home. Which is why the Google "loophole" works.

They keep their overseas earnings overseas to the greatest extent possible.

If the US did not tax earnings brought into the US and spent here all this money would come on shore and be spent here.

Re:Headline Is So Very Wrong (4, Informative)

LehiNephi (695428) | more than 3 years ago | (#33975784)

I can't speak for corporate income tax, but for personal income tax, the deal is this: you get a tax credit for taxes paid overseas. If you still owe US taxes after that, then you pay US taxes. If the foreign tax credit eliminates your US tax bill, then you don't pay any US income tax. The problem is that it effectively ensures that you get taxed at the highest rate applicable.

Re:Headline Is So Very Wrong (2, Insightful)

geoffrobinson (109879) | more than 3 years ago | (#33975790)

Imagine how much better our economy would be if our tax system encouraged corporations instead of discouraged them to move capital to our country.

Re:Headline Is So Very Wrong (0)

Anonymous Coward | more than 3 years ago | (#33975818)

Let's restate that accurately: The US charges corporations income tax only for income that they bring into the country. They charge individuals income tax on all money they earn, worldwide, no matter where it is earned or kept. There is an exception to that for the first $100K or so, I forget the actual number.

Re:Headline Is So Very Wrong (5, Insightful)

interval1066 (668936) | more than 3 years ago | (#33975842)

I never felt very good about paying into a system that requires me to either be an expert in that system, which would mean spending the equivalent time to get at least a two year degree, just to pay my taxes, or hiring an expert to do them for me. If I am required under penalty of imprisonment to pay taxes, its galling to me that I must also hire an expert to do them for me. Its a ridiculous, and unsustainable, situation that needs to change.

Re:Headline Is So Very Wrong (1)

MyLongNickName (822545) | more than 3 years ago | (#33975596)

I almost never agree with the parent poster. However, who in the hell marked the parent post "troll"? Some Google fanboy?

Re:Headline Is So Very Wrong (3, Insightful)

FlightTest (90079) | more than 3 years ago | (#33975772)

I am not a tax expert, however, I have heard that yes, you and your wife COULD do something similar, except the costs to get it going would greatly outweigh the benefits. Many of these tax "loopholes" have high fixed costs to get going, so they aren't useful for the kind of income most any household would have.

Re:Headline Is So Very Wrong (2, Insightful)

PPH (736903) | more than 3 years ago | (#33975782)

because the big guys can afford to pay folks who know how to exploit them...

Its because they can afford to pay folks who write the rules in the first place.

Re:Headline Is So Very Wrong (1)

icebike (68054) | more than 3 years ago | (#33975824)

I would bet you that if my wife and I tried to do something similar, we would almost certainly be "caught".

What they did was perfectly legal. Why don't you stop whining on slashdot and earn some overseas income and move it from one of your overseas subsidiaries to your subsidiary in a tax free country.

Oh, yeah, I forgot, that would entail actual WORK.

Re:Headline Is So Very Wrong (2, Insightful)

ArcherB (796902) | more than 3 years ago | (#33975850)

The widespread use of loopholes by companies/"rich" people always really pissed me off. They constantly complain so much of their wealth is being taken, yet they pull crap like this.

I would bet you that if my wife and I tried to do something similar, we would almost certainly be "caught". I don't know if loopholes are due to the complexity of the system, or because the big guys can afford to pay folks who know how to exploit them...but regardless of the reason, it's fucked up.

This is why need to scrap the entire tax code and replace it a federal sales tax. This shifts the taxes not on what people make, but what they spend. Suddenly everyone would pay taxes including the rich, poor, illegal whoever. No one would be taxed for money saved or invested.

Of course, there would still be loopholes. Medicine, unprocessed food, children's clothes etc can be made tax exempt as to not tax what people need to survive. All other "loopholes" and complexities would disappear instantly. No more extraordinarily wealthy people claiming everything as a loss or business expense in order to avoid taxes on it. If it's purchased, it's taxed.

(and yes, rich people will still pay more in taxes. Even if they just put the money in the bank, it will be spent eventually.)

Re:Headline Is So Very Wrong (2, Insightful)

MozeeToby (1163751) | more than 3 years ago | (#33975512)

It should also be noted that the official position of the government and the IRS is that tax avoidance, which this is, if done legally, which this is, is perfectly fine. It is not Google's fault that the tax code is so screwed up that they can avoid paying 90% of what, on the surface, appears to be their tax liability. Now, if Google had an army of lobbyists in Washington pushing to extend those loopholes or create more of them, that would be evil.

Re:Headline Is So Very Wrong (4, Informative)

Raenex (947668) | more than 3 years ago | (#33975552)

Now, if Google had an army of lobbyists in Washington pushing to extend those loopholes or create more of them, that would be evil.

How about secret agreements with the IRS? From the article:

"After three years of negotiations, Google received approval from the IRS in 2006 for its transfer pricing arrangement, according to filings with the Securities and Exchange Commission.

The IRS gave its consent in a secret pact known as an advanced pricing agreement. Google wouldn't discuss the price set under the arrangement, which licensed the rights to its search and advertising technology and other intangible property for Europe, the Middle East and Africa to a unit called Google Ireland Holdings, according to a person familiar with the matter."

Re:Headline Is So Very Wrong (1)

bagboy (630125) | more than 3 years ago | (#33975764)

Yeah, that's rock solid there.... "according to" "My Uncle Joe who is extremely cynical and" "familiar with the matter". FTFY

Re:Headline Is So Very Wrong (1, Troll)

eln (21727) | more than 3 years ago | (#33975698)

It may be legally fine, but it's ethically wrong. Google has built its vast wealth largely on the backs of American infrastructure paid for by American tax dollars. Ethically, they should be paying their fair share for that infrastructure, not exploiting loopholes to avoid it.

I'm sure anti-tax zealots will disagree with me, but in my view exploiting these kinds of loopholes is just another example of how laughable Google's "don't be evil" slogan has become.

Re:Headline Is So Very Wrong (0)

Anonymous Coward | more than 3 years ago | (#33975812)

Ethically, they owe every effort to reduce taxes and decrease other avoidable costs to their owners, the shareholders. Anything else is secondary.

Re:Headline Is So Very Wrong (3, Insightful)

eln (21727) | more than 3 years ago | (#33975882)

You need to look up what ethics means. Ethics means responsibility to all *stakeholders*, not just the shareholders. Stakeholders in a company include the shareholders, employees, and the society in which they operate. A company that does whatever it can to maximize shareholder value without regard to any of the other stakeholders is not ethical.

Re:Headline Is So Very Wrong (2, Insightful)

homer_s (799572) | more than 3 years ago | (#33975524)

Do I still feel like they're shafting me? Yes.

Who's "they"? And, assuming you're referring to google, how are they shafting you?
It's not your money.

Re:Headline Is So Very Wrong (5, Insightful)

bladesjester (774793) | more than 3 years ago | (#33975600)

Who's "they"? And, assuming you're referring to google, how are they shafting you?
It's not your money.

I disagree. The taxes they are avoiding paying would be used to pay for infrastructure, services, etc, so, in a very real way, it *is* his money because without those taxes, the system is not as well funded and projects/services/infrastructure have to be cut

Re:Headline Is So Very Wrong (0, Troll)

LBt1st (709520) | more than 3 years ago | (#33975692)

naa, our government would just piss it away on dumb crap anyway. No loss.

Re:Headline Is So Very Wrong (1, Insightful)

Darkness404 (1287218) | more than 3 years ago | (#33975794)

Incorrect.

What makes you, or anyone else feel entitled to income from someone else? The only fair "taxation" is voluntary "taxation" where you purchase a good or service. For example, if you drive a car, you would have to pay a fee to drive on government-provided roads. The problem is, what has the government done that entitles themselves to Google's income? Very little. Something tells me that the US government didn't spend $60 billion to help Google.

Google hasn't taken anything from me, Google has taken a little bit from the government, yes. But very little, not $60 billion worth. This idea that somehow Google owes the US government or the people of the US money, is silly to say the least and borders on theft at the most.

Re:Headline Is So Very Wrong (0)

Anonymous Coward | more than 3 years ago | (#33975870)

Depends if you count providing services to the employable population as "doing something" for Google. Taxes (should) go to keep the country livable and safe so that businesses can operate openly and fairly. When people avoid paying taxes they get an unfair competitive advantage by taking from that work force that other people paid to keep safe, healthy, and educated.

And Google didn't dodge $60 billion in taxes, if you were capable of reading the article you'd see that it's just under a billion per year.

But you seem to be happy to foot the bill for this sort of corporate theft. I don't understand it as it diminishes your quality of life. I guess you're just a masochist.

Re:Headline Is So Very Wrong (1, Insightful)

AnonymousClown (1788472) | more than 3 years ago | (#33975874)

The problem is, what has the government done that entitles themselves to Google's income?

Invented the Internet and then gave it away for companies like Google to make hundreds of billions dollars?

Re:Headline Is So Very Wrong (5, Insightful)

spiffmastercow (1001386) | more than 3 years ago | (#33975876)

The problem is, what has the government done that entitles themselves to Google's income?

You mean besides building the internet in the first place?

Re:Headline Is So Very Wrong (3, Insightful)

Rising Ape (1620461) | more than 3 years ago | (#33975608)

If X tax revenue needs to be raised, and Y pays less, then Z must pay more. And having one of the richest companies in the world pay 2.4% when most of us are paying an order of magnitude more lacks justice.

This is true for any plausible value of X, so simply saying "there shouldn't be as much tax" is irrelevant.

Re:Headline Is So Very Wrong (3, Insightful)

dachshund (300733) | more than 3 years ago | (#33975618)

Who's "they"? And, assuming you're referring to google, how are they shafting you?
It's not your money.

They're shafting you if you're a much smaller corporation or an individual that can't afford these tax dodges. Then you're bearing a disproportionately large share of the tax burden. And no, getting rid of corporate income taxes doesn't make this better, it makes it worse.

Re:Headline Is So Very Wrong (3, Insightful)

bsDaemon (87307) | more than 3 years ago | (#33975620)

We're being shafted because they aren't shouldering their fare share of the tax burden. Common people don't have any such loopholes. If we try and play a shell game to get out of paying taxes, we get audited and our lives get ruined. They get a cover story about how genius they are and how other companies who make money by selling information about us are going to start doing the same thing.

If they're going to make money selling our personal data to other people who intend to exploit it to try and trick us into buying stuff, the least the can do is cough up the extra $1bn a year or whatever to help pay for infrastructure, social programs and wars. Fuck their money. As soon as it gets labeled taxable income it becomes government money, and that means everyone's money, so they are screwing us over.

I Am Not a Fan of Unfair Taxation (4, Insightful)

eldavojohn (898314) | more than 3 years ago | (#33975694)

Who's "they"?

"They" are Microsoft, Google, Facebook, etc. Any company that uses this method.

And, assuming you're referring to google, how are they shafting you? It's not your money.

No, it's not my money. It's the communal money that is under so much debate by politicians. And the fact that Google and everyone else has a hundred goddamned lawyers and accountants sitting around saving them billions of dollars does upset me. Because I don't have that. I don't have the option to employ the "double Irish" tactic when trying to save thousands of dollars in taxes each year so I can afford a simple house. Nope, they get that privilege and I don't because I'm poorer than them. So who's being screwed over? Every tax payer that doesn't have or employ those options. If you live in America, that's you. Why is your public education so lacking? Why do your taxes go up? Well, part of it is that companies employ tax evasion methods like the ones listed in the article. I'm not singling out Google, I'm expressing equal anger toward all who employ these methods.

You can call me a socialist, you can call me a communist. That's fine because I know I'm neither of those. I'm just someone that wants a fair playing field when it comes to aggregating X amount of resources so that our government and public services continue to function properly.

The men and women who founded this country cited 'taxation without representation' as one of the reasons. Like them, I'm not okay with lobbyists and tax loopholes that are apparently legal and okay to anyone who has tons and tons and tons of money. The rich get richer and the poor get poorer just because.

Re:Headline Is So Very Wrong (1)

Requiem18th (742389) | more than 3 years ago | (#33975864)

It goes along the lines of:

I pay a higher fraction of my income to keep the country defended, the streets safe, the laws enforced, the mail moving, the homeless sheltered and the children educated than does companies like Google.

And I'll add, this in spite of the fact that I have much less to gain from military invasions, road maintenance, public education and law enforcement included but not limited to copyright and trademark enforcement and myriad other public services, than these same companies.

Re:Headline Is So Very Wrong (1)

Dunbal (464142) | more than 3 years ago | (#33975538)

Brought to you from the same school of thought that claims downloaded songs are costing the artists billions of dollars per year.

What Google is doing is perfectly legal, therefore it's not "costing" the US government anything. There's a difference between tax avoidance (not paying any tax you don't have to) and tax evasion (not paying taxes you have to). And while some governments bend over backwards to equate the two, the short version is that if there's no law against it, it's ok and said government can go to hell.

Re:Headline Is So Very Wrong (1)

royallthefourth (1564389) | more than 3 years ago | (#33975658)

They're using infrastructure and employees that were constructed and educated using American tax money, and they're doing it without putting anything back.

The laws are only structured the way they are because the rich can buy nearly any laws they want while the workers are left to feel the effects of it.

Re:Headline Is So Very Wrong (1)

Dunbal (464142) | more than 3 years ago | (#33975896)

They're using infrastructure and employees that were constructed and educated using American tax money,

Which infrastructure would that be? Please give examples of US government infrastructure being exploited by Google.

Re:Headline Is So Very Wrong (3, Insightful)

HungryHobo (1314109) | more than 3 years ago | (#33975758)

Tax evasion: illegal, not paying tax you owe.
Tax avoidance is perfectly legal and is where you don't pay tax you're not required to pay.

people need to understand that the 2 are not the same.

Re:Headline Is So Very Wrong (1)

Asic Eng (193332) | more than 3 years ago | (#33975830)

It's not "ok", it's just legal. It's also unfair since smaller companies and individuals can't make use of these loopholes.

Moral behavior is not required by law, but that doesn't mean that it has no value. If someone behaves like a jerk, it's good that society calls them on that. Google paying a ridiculously low amount of tax is jerkish behavior to say the least.

TFS is misleading even outside the headline (5, Informative)

DragonWriter (970822) | more than 3 years ago | (#33975780)

TFS says "Google only pays a 2.4% tax rate"

TFA says "Google’s income shifting [...] helped reduce its overseas tax rate to 2.4 percent"

Re:Headline Is So Very Wrong (1)

jeffmeden (135043) | more than 3 years ago | (#33975846)

Do I still feel like they're shafting me? Yes.

Was it the "double Irish" or the "Dutch sandwich" used? Because those are technically legal. Sorry.

HHOS (2, Funny)

drinkypoo (153816) | more than 3 years ago | (#33975866)

Do I still feel like they're shafting me? Yes.

You know if they gave it to the Feds they'd just use it to do evil. They're following their mandate.

I'm the submitter (4, Informative)

bonch (38532) | more than 3 years ago | (#33975868)

For the record, I tried to submit a different headline, but the buggy, AJAX-ridden story editor wouldn't display the changes I made in the text boxes when I hit Preview. It kept displaying the old text unchanged. I even refreshed the page and tried a different browser. Eventually, I said, "Fuck it" and submitted, hoping it would post the changes.

Re:Headline Is So Very Wrong (0)

Anonymous Coward | more than 3 years ago | (#33975900)

Do I still feel like they're shafting me? Yes.

You're thinking of the Dutch Rudder, not the Dutch Sandwich.

Are you going to say they're just being smart? (2, Insightful)

Spiflicator (64611) | more than 3 years ago | (#33975468)

What if it was Microsoft?

Re:Are you going to say they're just being smart? (5, Informative)

Rary (566291) | more than 3 years ago | (#33975530)

What if it was Microsoft?

It is. They're mentioned in the article as well.

Re:Are you going to say they're just being smart? (1)

blackest_k (761565) | more than 3 years ago | (#33975738)

and apple and vmware and ...

Mind with 14% unemployment and Banks which invested in the usa's ponzi scheme. Ireland needs the cash badly.

If you were a non-european company looking to sell in Europe it makes perfect sense to pick Ireland as a base of operations, you will also find manufacturing tends to favour eastern Europe due to lower labour costs.

So? (1, Redundant)

JesseL (107722) | more than 3 years ago | (#33975490)

Apparently this is legal, so why should I care? It's not as if the government is going to do better things with that money than Google is.

Re:So? (4, Insightful)

HockeyPuck (141947) | more than 3 years ago | (#33975542)

That's a lot of textbooks, teacher's salaries, roads to be paved, police/fire stations to NOT be closed etc etc etc..

Re:So? (1, Informative)

wowbagger (69688) | more than 3 years ago | (#33975820)

"That's a lot of textbooks, teacher's salaries, roads to be paved, police/fire stations to NOT be closed etc etc etc.."

That assumes the taxes collected would be spent on such matters, vs. on wars, bridges to nowhere, monuments to government leaders, etc.

Re:So? (2, Informative)

C_Kode (102755) | more than 3 years ago | (#33975628)

Apparently this is legal, so why should I care? It's not as if the government is going to do better things with that money than Google is.

That's a straight up ignorant statement.

Re:So? (0, Troll)

adosch (1397357) | more than 3 years ago | (#33975646)

Agreed. It's not like that ~$3 billion was going to be applied solely to our national debt, or something worth-while to keep our economy afloat. Applaud Google for legally avoiding ridiculous taxation. As wasteful and ridiculous as spending of our tax dollars has become more and more every year, I'd prefer to have Google use their break to pillage my personal and private data than have the U.S. Government do it half ass.

Re:So? (2, Informative)

dachshund (300733) | more than 3 years ago | (#33975664)

Apparently this is legal, so why should I care? It's not as if the government is going to do better things with that money than Google is.

One of the things they could do is fund their operations, rather than borrowing from overseas with substantial interest penalties for me and my children to pay. Trot this argument out again when the government stops doing that --- then we can talk about whether the government needs that money.

Re:So? (1)

royallthefourth (1564389) | more than 3 years ago | (#33975680)

That's not at all true. The government at least has the potential to use that money for the public good instead of buying a solid gold helicopter for an aristocrat.

Re:So? (3, Insightful)

HotBits (1390689) | more than 3 years ago | (#33975756)

Because they are not paying their share, and that means you and I have to make up for it. Further: this nation generally supports a progressive tax where the more wealthy pay a greater share, not less.

Not that Google is the slightest bit wrong for doing this! If I owned their stock I'd expect them to do whatever is legal to reduce non-productive expenses, which taxes are. I'd prefer them to invest it new products and technologies, or pay me a dividend.

Re:So? (3, Insightful)

Asic Eng (193332) | more than 3 years ago | (#33975862)

Your taxes have to be higher because these guys have to pay less. You should ask your government to close these loopholes, and have big companies pay a reasonable share of the tax.

Technically Legal (4, Insightful)

Afforess (1310263) | more than 3 years ago | (#33975508)

Technically Google has committed no crime, and their tax avoidance is entirely legal. While it is normal to feel a moral outrage, I think your anger should be focused on those who created the loopholes in the first place. Washington.

Re:Technically Legal (0)

Anonymous Coward | more than 3 years ago | (#33975750)

> [Washington] who created the loopholes in the first place.

After Big Business used campaign contributions to ask for them.

Re:Technically Legal (0)

Anonymous Coward | more than 3 years ago | (#33975776)

And why do you think Washington put those loopholes there? Out of the goodness of its heart? Probably not; maybe because it's been bought by those who benefit? In which case you can redirect your moral outrage yet again.

Re:Technically Legal (5, Insightful)

dachshund (300733) | more than 3 years ago | (#33975786)

Technically Google has committed no crime, and their tax avoidance is entirely legal. While it is normal to feel a moral outrage, I think your anger should be focused on those who created the loopholes in the first place. Washington.

Technically Washington has committed no crime, and their acceptance of massive quantities of cash in exchange for favorable tax legislation is entirely legal. While it is normal to feel a moral outrage, I think your anger should be focused on those who paid for the loopholes in the first place. Google. And Microsoft. And a few hundred other large corporations.

http://techcrunch.com/2010/04/20/google-spends-1-38-million-on-lobbying-in-q1-up-57-percent-from-last-year/ [techcrunch.com]

Re:Technically Legal (1)

Asic Eng (193332) | more than 3 years ago | (#33975888)

You live in a democracy, Washington is the result of your voting choices. Be angry at yourself and your fellow citizens.

Re:Technically Legal (2, Insightful)

MBGMorden (803437) | more than 3 years ago | (#33975898)

Indeed. The situation seems like a problem, but Google's playing by the rules here. Don't hate the player - hate the game (God I never though I'd be able to say that in a serious conversation . . .).

Just further evidence as to why we need a simpler tax system. Corporate rate is 35%? Lets simplify that and remove the loopholes. Same goes for personal income taxes as well. I don't want to fill out a 1040EZ in one case or a A, B, C, D, or ZEKD (all with different lengths and complexities - and a gazllion pages of explanations referenced by all of them). Give me a table that I can lookup my income bracket and then find the appropriate percentage I owe. Mulply my wages on my W4 by that percentage and poof - taxes done.

Don't Blame... (1)

AtomicOrange (1667101) | more than 3 years ago | (#33975510)

Don't blame the company (unethical as it may be). Blame the tax code that allows for such schenanigans to exist and occur.

Re:Don't Blame... (0)

suso (153703) | more than 3 years ago | (#33975594)

Don't blame the company (unethical as it may be). Blame the tax code that allows for such schenanigans to exist and occur.

Unethical? I thought Google's motto was 'do no evil'?

Re:Don't Blame... (1)

Ginger Unicorn (952287) | more than 3 years ago | (#33975770)

It's "don't be evil", the subtle difference being, I assume, that you can get away with "doing" a certain amount of minor evil things without "being" evil in general.

Exactly! (4, Insightful)

Just_Say_Duhhh (1318603) | more than 3 years ago | (#33975640)

The ridiculously complex tax code is to blame. It's time to flush it and start again. That's one of the concepts behind H.R.25 [loc.gov], also known as the FairTax [fairtax.org].

It's a misconception that corporations pay taxes. They don't. They get all their money from their customers (and some from investment). If you raise corporate taxes, the corporation raises prices to cover the tax. Why hide it like this? Just tax the customer, so we can all SEE how much tax we're paying. It's the only way to keep people involved in the battle to lower government spending, which is out of control.

Re:Exactly! (0, Insightful)

Anonymous Coward | more than 3 years ago | (#33975778)

And then a really big black market will come into being.

Legally Avoiding Taxes != Evil (0)

geoffrobinson (109879) | more than 3 years ago | (#33975516)

Unless you believe that all money ultimately belongs to the government, I fail to see how this is evil.

I look for every deduction I can grab as well. So does almost everyone else. This isn't wrong.

And yet they provide lots of jobs and services (0)

BadAnalogyGuy (945258) | more than 3 years ago | (#33975526)

The moral of the story is that by saving that money, Google is able to hire more people to produce more products and make more profit. Those people in turn pay more taxes which, in toto, is greater than the supposed evaded amount.

It's sometimes counterintuitive how economics works.

Re:And yet they provide lots of jobs and services (1)

AtomicOrange (1667101) | more than 3 years ago | (#33975602)

President Reagan, is that you?

All kidding aside: I'm no Economist, but the arguments for trickle-down theory seem pretty good to me.

Re:And yet they provide lots of jobs and services (3, Insightful)

Mongoose Disciple (722373) | more than 3 years ago | (#33975814)

I'm no Economist, but the arguments for trickle-down theory seem pretty good to me.

I thought by this point history had pretty well demonstrated that it's never worked out in practice.

It's a nice-sounding idea that falls apart completely in reality -- just like communism.

Re:And yet they provide lots of jobs and services (1, Insightful)

Anonymous Coward | more than 3 years ago | (#33975720)

The moral of the story is that by saving that money, Google is able to hire more people to produce more products and make more profit. Those people in turn pay more taxes which, in toto, is greater than the supposed evaded amount.

It's sometimes counterintuitive how economics works.

It's counterintuitive how economics works if you're going by base models and forgetting that the system doesn't work perfectly like that. You're assuming google will hire more people instead of just keeping the cash and giving it as bonuses to the CEO and using it for shareholders

a.k.a. "ECONOMICS SURE IS COUNTERINTUITIVE WHEN I DON'T UNDERSTAND IT!"

As a taxpayer (0)

Anonymous Coward | more than 3 years ago | (#33975534)

Let me be the first to say, as a taxpayer, that I don't care. Why don't I care? Because the US government is already the most expensive, most powerful government AND world empire (with military bases in some 150 countries around the world) that has ever existed. The last thing the people at the top of the pyramid need is more cash passing through their corrupt hands.

In fact, I wish more companies would catch on to this. The way things are going today, the less money being raked through government every year, the better. But wait, you say. There are legitimate government services that don't have enough money. And why is that, I ask? Because the vast majority of cash passing through the hands of the elite are being directed to things that don't benefit you, rather than things that do.

US corporate tax rate is among the highest (-1, Troll)

Anonymous Coward | more than 3 years ago | (#33975562)

Communist China has a lower corporate tax rate than the US! And so do a lot of other countries. [Source [wikipedia.org]] If we want more of our money to remain here in the US then LOWER OUR TAXES.

Don't hate the player. Hate the game. (0)

Anonymous Coward | more than 3 years ago | (#33975598)

Am I bad because I go to an accountant to do my taxes and get every deduction/exemption I am legally entitled to?

Internet treats limits as damage, routes around it (0)

Anonymous Coward | more than 3 years ago | (#33975676)

The Internet treats attempts to control it as damage and routes around it; capitalism treats tax as inefficiency and routes around it.

Even though.... (2)

Eric Freyhart (752088) | more than 3 years ago | (#33975684)

Even though the title is misleading, I still have only one thing to say....

"DON'T BE EVIL"

Like every other monolithic company in the world.

Good for Google (4, Insightful)

DesScorp (410532) | more than 3 years ago | (#33975702)

""Anyone may arrange his affairs so that his taxes shall be as low as
possible; he is not bound to choose that pattern which best pays the
treasury. There is not even a patriotic duty to increase one's taxes.
Over and over again the Courts have said that there is nothing sinister
in so arranging affairs as to keep taxes as low as possible. Everyone
does it, rich and poor alike and all do right, for nobody owes any
public duty to pay more than the law demands."
" - Judge Learned Hand

Of course, if we'd reign in corporate taxes, we'd bring a lot of capital back home [wsj.com]. The US has one of the highest rates of corporate taxes in the world [wikipedia.org], trailing only Japan and Cameroon. Even France... bastion of Euro-Socialism Lite... has a lower top corporate tax.

Corporations shouldn't pay any taxes. (-1, Troll)

mosb1000 (710161) | more than 3 years ago | (#33975726)

Every tax is paid by the individual at the end of the day. Taxing corporations is a way of hiding taxes from the people who actually end up paying them.

Re:Corporations shouldn't pay any taxes. (5, Insightful)

atfrase (879806) | more than 3 years ago | (#33975822)

If corporations were not recognized as individuals in a number of other annoying contexts (political contributions, "personal" rights, etc) then I *might* be inclined to agree. But as it stands, they've got the best of both worlds; no meaningful taxation like individuals are burdened with, but all the same protections and "rights" as well.

Re:Corporations shouldn't pay any taxes. (0)

RightSaidFred99 (874576) | more than 3 years ago | (#33975844)

Exactly. But it's easy to rouse the rabble by breathless, facile claims about "fat cat" corporations (rabble rousers love the phrase "fat cat") not paying their "fair share". Where exactly do people think that money goes, is the "corporation" walking down the street and buying an 8-ball and paying hookers to let it snort blow off their hooker bellies? I don't think so. It goes to a human being in one way or another who pays taxes.

Corporate taxes 100% literally takes money from the best job generating position it can be in and moves it to one of the most wasteful places money can be - the government.

I don't mind paying reasonable taxes, basically I can't buy a few extra TVs I don't need, or a new car I can live without. I'm not using that money to massively stimulate the economy. Corporations do.

Re:Corporations shouldn't pay any taxes. (0)

Anonymous Coward | more than 3 years ago | (#33975886)

no, taxing corporations is a way of collecting funds used to offset all the extra infrastructure costs these corporations generate.

Re:Corporations shouldn't pay any taxes. (0)

Anonymous Coward | more than 3 years ago | (#33975892)

Do you think if we remove the corporate tax that somehow the prices of goods and services will be lower? I am a pessimist and believe if we lower those tax rates (or eliminate them altogether) prices on goods and services won't go down, the profits for the corporations will increase. Will that spur an increase in development and hiring, perhaps; will it ensure that fatcat executives get monster bonuses, oh yes.

why do companies (0)

Anonymous Coward | more than 3 years ago | (#33975748)

pay taxes in the first place???

companies pass taxes on to consumers... if they didn't have to pay taxes, they would have lower prices. if we taxed consumers instead, then these loopholes wouldn't be found in the first place...

So what. (1)

RightSaidFred99 (874576) | more than 3 years ago | (#33975802)

That money is well-taxed before it goes to any human being. Anti-corporatism is all the rage these days, but corporate profits go to either creating jobs by expansion/R&D, or they go to human beings as some form of compensation, at which point that person pays taxes.

US corporate income tax (1)

operagost (62405) | more than 3 years ago | (#33975816)

The corporate rate is essentially a mirror of the progressive individual/family rates. Therefore, it's not 35%, but slides from 15% to 35%. By the way, that 35% top rate is the highest in the world. It's no wonder companies do their best to avoid it.
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