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How Google Avoided Paying $60 Billion In Taxes
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."
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.
My work here is dung.
What if it was Microsoft?
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.
"Prefiero morir de pie que vivir siempre arrodillado!"
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.
If our elected representatives no longer represent us, do we still live in a Democracy?
Don't blame the company (unethical as it may be). Blame the tax code that allows for such schenanigans to exist and occur.
"What is there a tank on the boat? WHY IS THERE A TANK ON THE BOAT?!?" L4D2
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.
Except for ending slavery, the Nazis, communism, & securing American independence, war has never solved anything.
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.
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.
Someone actually read TFA
Am I bad because I go to an accountant to do my taxes and get every deduction/exemption I am legally entitled to?
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, also known as the FairTax.
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.
I need trepanation like I need a hole in the head.
The Internet treats attempts to control it as damage and routes around it; capitalism treats tax as inefficiency and routes around it.
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.
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.
My work here is dung.
""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. The US has one of the highest rates of corporate taxes in the world, trailing only Japan and Cameroon. Even France... bastion of Euro-Socialism Lite... has a lower top corporate tax.
Life is hard, and the world is cruel
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...
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"
But corporations are people!
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.
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.
Gamingmuseum.com: Give your 3D accelerator a rest.
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.
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.
Corporations pay taxes and individuals keep their money. It could happen.
How does it feel to be a liar with pants constantly on fire?
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.
"You're right," Fisheye says. "I should have set it on 'whip' or 'chop.'"
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.
no, taxing corporations is a way of collecting funds used to offset all the extra infrastructure costs these corporations generate.
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.
But corporations are people!
Thread over.
RIP America
July 4, 1776 - September 11, 2001
Personally, I find that a "Double Irish", followed by a "Dutch Sandwich" actually is pretty taxing. Not to mention the mess that needs cleaned up before everyone can put their clothes back on.
If you want to make that argument then you would need a corollary to go along with it that any law that treats a corporation like an individual would have to be abolished as well.
Knowledge is just opinion that you trust enough to act upon. -Orson Scott Card
The act of have a sex sandwich with a mother and daughter who's combined weight is over 400 lbs http://www.urbandictionary.com/define.php?term=Dutch%20sandwich
the money saved in taxes? it goes into paying dividends on shares and wages etc. of employees... all of these get taxed anyway... If they were paying higher taxes, then they wouldn't be paying duch good wages or employing so many people or paying such good dividends on their shares... and people would still be moaning...
Donald 'Duck' Dunn: We had a band powerful enough to turn goat piss into gasoline.
Google better hope Obama doesn't read Slashdot...
Maybe you should take some higher-level courses. What stops them from raising prices is competition. When you tax an industry, you allow all participants in the sector to raise their prices to cover the tax increase. If one company finds a tax loophole, they'll be able to undercut the other players, and force everyone else to find a way to cut their costs, so they can cut prices. Yes, they may be able to sit on higher profits for a while, but anyone who has gotten out of econ 101 knows, growth is the only measuring stick that matters. Cash sitting idle in corporate coffers is not how you win the game.
I need trepanation like I need a hole in the head.
If even a tenth of those who have developed skills in software would spend a little time on the study of economics, there'd be less nonsense here.
Taxes on corporations are hidden taxes on consumers. End of story.
--- Bill
A corporation is simply an organization. It's not a person out there living it up, enjoying the benefits of all the money it's made. All the money is headed somewhere else (either to shareholders as dividends, or to pay operating expenses such as wages).
The corporation itself won't enjoy the benefit from any of the money because it is imaginary. The corporation itself won't weight the benefits of government services against the cost of the taxes, and even if it did it wouldn't complain about it because it can't care and can't speak (only people may speak for it).
It makes no sense to tax corporations because they have no stake in the matter. They are imaginary. People are real, they have a stake. Corporate taxes hide the costs of government from the people who really have a stake in it. That is not a good way of doing business because there is no accountability.
AFAIK, they can't make political contributions. Those need to be done through individual members of the corporation.* But somehow, they have free speech rights that allow them to buy advertisements.
*There's a lot of backroom dealing to the effect of, I donate $25K to each of the candidates X, Y, and Z that you're buddies with, and you do A, B, and C for me. Now the guy who does A, B, and C is owed a big favor from X, Y, and Z, which he'll collect sooner or later either as a politican or a lobbiest.
"If a nation expects to be ignorant and free in a state of civilization, it expects what never was and never will be."
...if they invest the unpaid taxes in offshore windmills :)
So much for not being evil
I itemize my taxes at the end of the year in such a way as to end up paying as little in taxes as possible. I'm relatively certain that the people here complaining do the same. Why is it okay for us to look for legal ways to pay less, but not Google?
Lotta hypocrites around these parts . . .
A corporation with a sole business model founded on tracking, storing, and cleverly selling data, is clearly evil, and is the enemy of all democratic mankind. Whether the democratic masses know it or not. I have always thought google was evil.
Now, after hearing this tidbit, they are clearly EVIL. Time to delete the gmail, docs, voice, and get rid of that blasted googleTV. Ahh, on second thought.... it's too late, they've already taken over. Blast them.
Let me be the first to welcome our new overlords.
Google is good!
So you're saying we should protest in favor of "No Representation without Taxation!"
Planning to be moderated ± 1: Bad Pun.
This is the biggest trolling post I have seen in a long time. You should be ashamed of yourself CmdrAssTaco. Shit like this is killng /.
I've heard that somewhere before...
I'm getting so tired of people saying that "fair" means "you pay, I benefit". Almost half of Americans pay NO federal income tax at all (http://www.businessinsider.com/only-half-americans-actually-pay-income-tax-2010-4), and these are the ones screaming loudest that the ones who DO pay taxes should pay even more... with that money to be paid to (you guessed it) the people who already pay nothing, directly or indirectly.
"I want your money, I don't want to have to work for it, so I voted that you have to give me your money. That's my definition of 'fair' and 'democratic'."
Maybe it's time I looked into creating an overseas-based tax structure for myself.
Everybody gets what the majority deserves.
It's thier money. People always love complaining about others that have more than them. Simple jelousy. Like those in upstate NY who don't want Google to build a datatcenter because of the PILOT (payment in leu of taxes) agreement. Well you know what? Its not like that 40 acres is bringing in much tax revenue as it sits now. Yes collection rates are going to be lower but its better than the current yield. Not to mention the jobs both Google and Yahoo are bringing to the area,.
All taxes are paid by individual taxpayers, no matter the form in which it goes to the government. If Google had not used any loopholes and paid, say $3B more in taxes, then $3B would be passed on to its customers in the form of increased costs, so it ends up being a tax on the customer. Be thankful that they don't pay them - keeps your costs lower and keeps the politicians from finding more useless crap on which to spend it.
I don't want to achieve immortality through my work. I want to achieve it by not dying. - Woody Allen
At least google does some really neat shit that advances human tech and over all quality of life for the masses. As opposed to these wall street dens of fucking scumbag thieves who are nothing more than leeches and parasites.
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/8074417/Goldman-Sachs-pay-and-bonus-pool-hits-13bn.html
The neat stuff google does, or toxic derivative "financial products" that destroyed the global economy outside of asia then got bailed out to the tune of TRILLIONS, not billions, trillions of various currency units that all of us peons get to pay back one way or the other.
A little perspective is needed here on what is a ripoff or not.
It's solidly rigged in favor of the rich and the corporations.
Nothing new here; vote with and for the republicans to keep things this way.
I've fallen off your lawn, and I can't get up.
Google on average pays 20% in taxes, as stated in their earnings. Which is still pretty low, but nowhere near the 2.4% in the article.
These taxes that were 'avoided' are the taxes for bringing profit home to the US that were made in other countries.
Most countries have the same tax rate set in the range of 0-2%. The US has this tax rate at 35%.
If I were to make money over seas and I had to pay 35% to bring it home, I would be tempted to re-invest it over seas as well.
If you want this money to come to the US to be reinvested and help the economy grow, make the US tax rate for these profits similar to that of other places so that it is not worthwhile to do these 'tricks' which really amount to little more than keeping money that was made outside of the US outside of the US to avoid US taxes.
Essentially, Google licenses the IP to the Bermuda holding company for $1000, which Google, US pays taxes on.
Now, the Bermuda company licenses it to the Irish company, which then sells products and advertising to make a ton of money. That ton of money goes, by way of the Netherlands, back to the Bermuda company...
... where it sits indefinitely.
"But no," you say, "it returns to the US in license fees!"
Nope. As noted, Google sets its license fee intentionally low so that it has very little income and thus pays very little US income tax. If that money was returning to the US in license fees, then they would have all that income and pay taxes again. The money, generated overseas, stays overseas (well, Bermuda, anyways), and is not coming back into the US. Google, the multinational has avoided paying US taxes on its international profits by keeping its international profits separate from its US profits. Google, the US company, hasn't avoided any US taxes.
The article also notes this:
Deferred Indefinitely
Technically, multinationals that shift profits overseas are deferring U.S. income taxes, not avoiding them permanently. The deferral lasts until companies decide to bring the earnings back to the U.S. In practice, they rarely repatriate significant portions, thus avoiding the taxes indefinitely, said Michelle Hanlon, an accounting professor at the Massachusetts Institute of Technology.
Conceptually, this makes some sense, too... Why should Google US have to pay taxes on money that was earned overseas and is never brought into this country?Like, say they make a lot of money on advertising in the UK, and decide to open a London office and hire a bunch of people there... Why should the US government get a piece of money earned outside the US and spent outside the US?
I thought the Google being a good solid liberal company - Obama's number 5 contributor - would do the good American patriotic thing and pay confiscatory tax rates on it's profits .... I am so disillusioned now *sob*
---- "Logoff! That cookie shit makes me nervous!" - A. Soprano
I assure you, the lowest tax rate in the technology industry is 0% ;)
> Only poor people pay taxes.
Back in 2000, Dick Cheney sold $35-million in Haliburton stock, and paid over *FOURTEEN MILLION DOLLARS* in taxes. In one year!
( Citation, MF: http://usgovinfo.about.com/library/weekly/aa041301a.htm )
Start a family tree at my generation. Count me, my wife, my three brothers and sisters-in-law, her sister and brother-in-law, my five cousins and their spouses, her seven cousins and their spouses, and all our parents and grandparents. Total all the income taxes we pay over the whole of our lives and it won't be $14-million.
We the people need to get our own lobbyists for fight for our interests:
http://www.theonion.com/articles/american-people-hire-highpowered-lobbyist-to-push,18204/
As far as I know, corporate person-hood has only been established by legal precedent (specifically in regards to whether or not corporations have a right to enforce contracts). So you would really have to write a new law saying that corporations don't have a right to enforce contracts. I don't see the point in doing that, but I can't say that I'd have a problem with it either.
Even if Google keeps that money, Chances are they are going to spend it. On a great many things. New buildings, New servers, New hires, more R&D... I could go on but you get the picture. And all of those things get taxed. so yeah they got out of paying a significant amount of taxes but they will most likely reinvest and their reinvestment will get taxed yet still provide benefits. maybe not initially, but eventually that money makes it way back. Well unless they bonus it all out to execs. and then the execs get taxed. Ideally
But maybe, just maybe, we adjust the corporate Alternative Minimum Tax to .02% of worldwide revenue?
Google would have paid $4.7M on 2009 revenues of $23.651B.
Naw, not enough. How about 2%? $473M taxes? Seems like not a lot.
But wait. From their own results report for Q409:
"Income Taxes - Our effective tax rate was 23% for the fourth quarter of 2009."
Yeah, and someone's nose grew.
Evil. Not any different than any other corporation, just bigger.
Actually, we will never fix this. Corporations don't pay taxes, this is just an expense to them. Their customers pay the taxes.
deleting the extra space after periods so i can stay relevant, yeah.
cause the only people paying off the debt are the lower class.
So are income taxes.
There is no tax-free situation for the poor with income tax in place.
Assume 30% average tax rate. Poor person pays zero. Then buys a service, such as plumbing. Plumber pays 30%. Poor person pays $100; Plumber gets $70, government takes $30; poor person gets (maybe) $70 worth of plumbing. Effective tax rate for poor person: 30%.
Of course, it's higher if you're middle class: You earn $142; taxed at 30%, you keep $100; you pay plumber $100; government takes $30; you get $70 worth of plumbing. Effective tax rate for middle class: 50%.
Whereas if you're Google, you pay 2.4%, so you earn $102.45, keep $100, pay the plumber $100, govt gets $30, Google gets $70 worth of plumbing. Effective tax rate for Google: 31.6%
By taxing incomes, the government ensures that everyone, most definitely including the poor, pays taxes by catching you (often again) when you spend your money on anything that is taxed. The only way to avoid paying is to only buy things that themselves are not taxed in any way. And good luck with that.
I've fallen off your lawn, and I can't get up.
I know most people see this article and think that American's are getting screwed. Actually, the article makes the case that as American taxpayers we are getting screwed. The article also only gives one side of the argument, basically saying 'close the loop holes and tax the hell out of them'. However a better answer to raising the taxes or more vigorously applying them is to drastically lower or remove them all together. I link you to the following article from Bloomberg.com http://www.bloomberg.com/news/2010-10-12/stimulus-of-1-trillion-adds-nothing-to-deficit-frank-aquila.html To summarize the article he states the companies would no longer have a reason to hide the money, which they would in turn bring back into the US and use somehow. Whatever way that is, it will almost assuredly be taxable, whether it be more jobs (tax on income), more infrastructure, dividends to investors, what-have-you. If companies are going to great lengths to avoid high taxes, in turn withholding tax revenue, how does making them pay more/up make any sense?
Yes, even for a technology company like Google. They like servers to be located close to the customer, the main headquarters and Google Campus are here in the U.S., and I bet Page, Brin, and all of the executive officers own property. You can't hide beachfront property on an island or a Swiss bank account.
They will go down because all companies cost will now go down. Unless you have a group of companies colluding, which is illegal if not often enforced, some company will lower their prices in an attempt to undercut the competition and gain market share. This in turn will force other prices down.
"... but I do begrudge people from demanding that the rich pay even more taxes.'
Warren Buffett himself says that the rich do NOT pay enough taxes, and that the taxes on the rich should be higher.
"Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion (£26 billion), said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”
"Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent."
http://www.timesonline.co.uk/tol/money/tax/article1996735.ece
Any sect, cult, or religion will legislate its creed into law if it acquires the political power to do so.
Well, we all agree taxes are evil, right?
Thanks. It's nice to see someone else the reads the articles.
How many people will not only fail to read the article, but fail to do the math?
If 60 billion was inly 2.4%, Google would have to be making a hell of a lot more money.
The Kruger Dunning explains most post on
Punish people for doing something (business taxes) they will either stop doing it (go out of business) or try to reduce the impact of the punishment by changing what or how they do something (tax havens, non-profit status, etc). No-one should expect anything less when an entity unceremoniously wishes to take over 30 cents per dollar you make. American corporations TOTALLY LEGALLY paid less taxes than they otherwise would have had to if they didn't do anything about it? Great! That's $60 billion dollars the American government can't squander. Government is necessary and all that sure, and I don't mind paying a fair tax rate, but the US is far above that number and has been for years.
Remember that Tennesse dude that didn't pay his $75 fee, so the firemen let his house burn down? That's what needs to be done here. If corporations feel that they somehow don't need to contribute to the pot for essential services provided by taxes, then they should not be recipients of said essential services.
Consider this: Google got rich because of the INTERNET. And where exactly did the internet come from? It came from TAX MONEY. The internet didn't spring forth from no place, essential R&D had to be done, and most of it was government funded research, i.e., tax dollars.
Now let's imagine for a second that everybody employed Google's tactics, but this idea got thrown through a space-time distortion and landed in the 1950s. So, it's right after WW-II, and nobody in American is paying taxes because we're all looping it through Bermuda.
Guess what happens? There's no internet. There's no space program. Hell, by this time there's no police, EMS, or fire dept. When 9/11 happens, only financial people died because there's no attempt at a rescue. Of course, I wonder how we even have financial people without an educational system.
Oh, and there's no Google either, and no Facebook. Because without the internet, none of that happens.
So go ahead, be a Tea-Bagger and not pay taxes. I hope you've got a gun to defend your property, because when you dial 9-11 for the police, you get disconnected. Assuming we even have a phone system since America would be a completely collapsed society with anarchy and violence as the only law.
If telephones are outlawed, then only outlaws will have telephones.
I find it so disheartening that people will bitch vehemently about taxes without a fucking clue about the truth. I was hoping someone would point out that your return is a portion of the money already taken out of your taxes. I know people well into the "bottom half" of earners who didn't have their taxes set up right and they ended up owing money to the government come tax season.
:(){
Greedy fucking assholes.
"I disapprove of what you say, but I will defend to the death your right to say it." - Evelyn Beatrice Hall, re Voltaire
Care to purchase it?
(Seriously, the more a certain sect of the media brags about it being "grassroots," the more you should be realizing what a load of bullshit the claim is. I've been calling out gov't spending for the past decade but I don't seem to remember Fox News pushing my "grassroots" ideals all over the airwaves, and that has nothing to do with rallies or total participation. It has to do with underlying agenda; in this case, political upheaval puts their guys in power so they support it. The Tea Party is nothing more than political speak of the year, sort of like "flip flopping,", "giving the keys back," "socialist," "terrorist sympathizers," or any number of idiotic catch-phrases they use to dumb down your ability to think and take advantage of people's inclination to be attracted to slogans.)
I asked my girlfriend if she was into Double Irish or the Dutch Sandwich, but she just slapped me.
I'm too lazy to read the article but, does it explain how I can have a 2.4% tax rate?
~Syberz
Good. Can I sign up to find a loophole in my Federal taxes as well?
Our 35% rate on Business in this Country should be illegal. Then again almost everything our US Federal Government does is corrupt and it shouldn't be doing it in the first place.
I don't blame any company for trying to keep more of what they EARNED! The Federal Government didn't earn it and nor did any of the hand out citizens looking for a free ride handout.
Go Google, you just got even less evil in my book.
But corporations are people!
And the top people in these corporations hide the majority of their income under the corporations. They use all sorts of legal tomfoolery to avoid paying taxes at all.
I guess the poor in Washington State should be happy they pay no income tax! Actually, WA has one of the most regressive tax systems. The poor pay about 17% and the rich pay about 4%. This is largely due to sales tax which has a bigger impact on low incomes than high incomes.
There's so much anti-tax rhetoric around here, it's a pleasure to read someone give a good argument that demonstrates why the rich should pay taxes, and the taxation system needs to be fixed so that they do.
At this point in the US there is a shrinking line between taxes and government extortion. These obscene rates are the reason so many companies have located the headquarters overseas.
The only reason it makes financial sense for Google is because of the amount of money the company makes yet somehow for the average user the services provided are free. It's truly remarkable.
Instead of complaining about how someone else or some other company isn't paying what you think it should in taxes, you should spend that time figuring out how to reduce your own tax burden.
A 35% corporate tax is absolutely ridiculous. What does the government provide Google that it should be entitled to 35% of their profits?
It's a perfect time for being wasted.
A perfect time to watch the stars.
- Burden Brothers, "Beautiful Night"
Actually, the bottom half or so of the US population pays no federal income taxes, and the top 1%, 5% etc. pays a hugely disproportionate share. Want to see the guys dodging taxes relative to the amount of money they make? It's huge corporations like Google that give loads of money to the Democratic Party, as Google did.
Revive the Constitution.
I thought Soylent Green was people?
No meaningful taxation! Read the article - Google's tax rate in this Country is 35% which is REDICULOUSLY high! 35% of all profits go to Uncle Sam - for what? It's extortion and if they'd lower the rate we might have a few more jobs in this Country. How many businesses do you think don't headquarter in the US so they can avoid our insanely high corporate tax rate? I'd imagine a lot of them.
Go Google and Facebook and any other corporation! You deserve to keep more of what you earn. The entitlement crowd can go get a job. The Big Government cronies can go home when we continue to vote you out each election. It's time to return to Limited Government and lower tax rates.
In addition, the article is about the 2009 tax year. During the 2009 tax year, Obama's Making Work Pay tax credit disproportionately benefited the poor. That tax credit is now expired, and (unlike with the Bush tax cuts) there is absolutely zero discussion in Washington about extending it.
Anyone who supports extending the Bush tax cuts but fails to support extending the Making Work Pay tax cut is doing exactly what we are accusing you of doing, namely, wanting to keep poor people as the only ones who pay taxes. Presumably this is your stance as well, since I see you favor extending the Bush tax cuts, but not the Making Work Pay tax cut. If this assessment of your position is wrong, please feel free to correct it.
Real Americans as we've been told for over a decade are not people who use reason or know history or believe science.
Americans are really stupid! All of us unAmericans just refuse to leave the country and they've not found a way to get rid of us yet. (but since they think we are conspiring to put them into camps or whatever Glenn Beck says they may have to attack us first... you know, like Iraq...)
insightful? are you shitting me?
too bad there's no "+1 painful reality" tag
"I disapprove of what you say, but I will defend to the death your right to say it." - Evelyn Beatrice Hall, re Voltaire
It is not what it was when it started. I know some of the 1st people and they are NOT part of the fake group of suckers who stole the name and just a small number of the early people are fell for the new one under the same banner.
Its not hard to steal a grass roots unorganized movement that has faded out when you have marketing people with tons of corporate funding and TV time when the real movement had an incredible time trying to even get noticed.
Democracy Now! - uncensored, anti-establishment news
A corporation is a legal entity, with almost as many rights as an individual, more all the time lately. It's not a situation I agree with but it is a reality.
"I disapprove of what you say, but I will defend to the death your right to say it." - Evelyn Beatrice Hall, re Voltaire
wanna bet?
it appalls me that corporations have first amendment rights in the eyes of the law
"I disapprove of what you say, but I will defend to the death your right to say it." - Evelyn Beatrice Hall, re Voltaire
Actually, if Google had not done this they would have broken the law.
Why?
Because the law says that a company must do everything to maximize profit for their shareholders. So a company can't be "not evil", since the laws says they must be. It's not their fault, it's the law makers fault.
Same goes with copyright, patents and so on. According to the law they must be greedy bastards, otherwise the people responsible (VP, chairmen, board members and so on) in the company will break the law.
I don't like that it works this way, but we can't blame the companies for being good at what they are meant to do, earn money for the shareholders.
What we can do is either change the laws (good luck with that in the US...) or we can refuse to help the company earn money or just don't give a damn.
It's just up to your self.
Personally I'm the much worse evil (according to people in the country that knows best), a liberal socialist one...
If you are against corporations being treated as a legal entity, why are you for taxing them?
for every tax paid by a corporation they have to get it from a person by selling services or goods.
It is simply indirect taxation of the populace. It is a far easier sale to the population than taking it directly, hell why do you think withholding taxes works so well.
If all taxes came directly from individuals too many would ask questions politicians would not want to answer.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
But corporations are people!
Sure... yeah, sure they are. Same thing. <wince>
You forgot to mention sales tax - 10% or so all by itself in Northern California. It is a regressive tax because poor people spend a higher percentage of their income on taxable items.
Social security tax is "paid by the wealthy" but since there is an income cap above which it does not apply, it is also a much lower percentage for income for the wealthy than for the poor or middle class.
In addition, the AMT, originally intended to snare extremely wealthy taxpayers, has in effect become a surcharge that affects upper-middle and some middle-class taxpayers, especially in states with high state, local and property taxes. Ironically the very wealthy often escape this tax.
Normally you need to pay the escort service in advance to get a "Double Irish". They require a lien on property for the "Dutch Sandwich".
People need to vote for representatives that will fix these loopholes and not surcome to special interests who want to make them bigger. How convenient, there is an election right now so go vote.
You've been plundered.
"...the few practice lawful plunder upon the many, a common practice where the right to participate in the making of law is limited to a few persons.” – Frédéric Bastiat, The Law
I once took an excursion to Reddit, and later HN. Unlimited up/down voting sucks when dealing with a hive-mind.
Supposedly this was the case before world war 2 as well.
Bring back the old version of slashdot.
Ahh, you both got hit by the old "I disagree!" cocksucker mod.
Is there a way to go back to the orginal threaded slash interface? Rendering 10,000 div and class tags in a large group discusson is grinding my browser to a screaching halt. The new interface is not attractive, not efficient and does nothing for me when it comes to functionality....epic fail . I guess the slash developers did not take note of the digg fiasco.
Got Code?
A corporation is simply an organization. It's not a person out there living it up, enjoying the benefits of all the money it's made.
True. However, typically it does have a will of its own. Who actually runs a corporation? The CEO, obviously, but he himself works for the shareholders, and if he's not raising the profits/price of their stocks, he's out. In a sense, he's a hostage. A very well treated hostage, but one nonetheless. Shareholders, however, are very similar. If profit/price of the stocks is not raised, then they lose money. And due to investors being typically very panicky, any unfamiliar drop means there will be plenty of people trying to get out of the boat before it sinks, which means more drops etc ad infinitum. Se you have to find a way to keep profiting more and more even if you're doing really well already, or you might lose a lot. Looking at it like that, it's hard to find someone who's in charge. We might as well say that the only one they're all working for is the corporation. Not that it jusifies taxing them, of course. I was just sidetracking. What justifies taxing them is their using of governmental institutions. They use court houses, roads, policemen etc. Actually, nowadays they use them more than citizens, I think.
I am not sure how they missed the tax evasion scheme known as the Double Dutch Rudder...
no comment
Taxes on business make no sense except as a way of hiding the burden from the people, who actually pay them.
How many millions (billions?) of tax dollars is Google not paying that could be used to reduce each of our personal income tax burdens? Couldn't this one company's taxes, if collected at higher than 2%, cover tens of thousands of individual's tax share? How is this good for society?
If you want a more level playing field and you live in California, vote Yes for Proposition 24, which will make it more difficult for companies like Google (and esp. oil companies) to avoid their fair share of taxes.
Before you anti-tax folks get your panties in a bunch, please keep in mind this proposition would close exactly the kind of tax loophole that only benefits corporate behemoths at the expense of small business and consumers.
Make sure everyone's vote counts: Verified Voting
Or don't be stupid?
1st grade logic corollary: .
Your learned what a "corollary" was in first grade?
Cost of being allowed to do business. Social responsibilities. They make use of the same public works and services the rest of us do, which have nothing to do with rights.
"I disapprove of what you say, but I will defend to the death your right to say it." - Evelyn Beatrice Hall, re Voltaire
You can't name a single thing that the US government would better spend that money on than Google.
Bonuses for failed bankers? Rescuing inefficient industries and manufacturers to the detriment of more efficient ones? Torturing innocent people? Subsidizing irresponsible borrowers? Spying on Americans? Attacking countries that pose no threat to us? Creating a new permanent underclass of welfare recipients? More jails and more corrupt, militarized police? Services for illegal immigrants and their hordes of children? Tearing up and re-building perfectly-good roads and bridges? Pointless, ecologically-destructive make-work? Extending old age at the expense of youth? Maintaining overpaid bureaucrats? Creating more terrorists who hate us? Handing out prescription drugs?
Is there even one thing they do that isn't corrupt and destructive from top to bottom?
"I assumed blithely that there were no elves out there in the darkness"
This is tax on NON-U.S. PROFIT. It was never subject to U.S. tax (a won't ever be until repatriation).
They only pay social security tax if they get their income from wages (that's a really small number-most of their income is in other forms than salary).
And on top of that, if they do get 1 million in salary. they would pay the same 7500 (secretly 15,000) that the 100k salary person does. So it drops from an effective 15% tax to an effective 1.5% tax. If they make 10 million, their effective tax is .15%.
So they pay it, but it's not much of a factor.
They should pay it- since there is a small risk they'll be bankrupted and need a retirement income. But.. they should be means tested out of it if they 'win' the lottery and retire wealthy. It's more of a retirement insurance. I expect to be means tested out of 25% to 50% of my social security.
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
Not all participants are based in places where this tax would apply.
But if we close the loophole, they will take their company to China?
As DragonWriter pointed out above: the overseas rate was reduced to 2.4%, but there's a couple other factual errors in the summary.
The actual effective rate is 22.2% (relative to statutory 35% in the US, although it's lower elsewhere): "International income-shifting, which helped cut Google’s overall effective tax rate to 22.2 percent last year."
and "Google Inc. cut its taxes by $3.1 billion" (first sentence...not $60bn)
the $60bn number is all US corporations using this strategy: "Such income shifting costs the U.S. government as much as $60 billion in annual revenue"
The summary is incredibly misleading.
If you're going to start complaining about corporate donations to political parties/movements/PACs/etc, which is a perfectly valid complaint to have, you're also going to have to spread the blame around -- D or R, the parties are in bed with whomever has open pockets. One of many reasons I quite dislike American party politics.
Cheers,
"What in the name of Fats Waller is that?"
"A four-foot prune."
What I don't like are people cheating the system
I understand your feelings on the topic, but are they cheating the system? If the rules are poorly written, they still are rules, and you aren't cheating to follow them. Many of the strange tax loopholes are a result of the government trying to encourage certain types of behavior with tax incentives.
HA! I just wasted some of your bandwidth with a frivolous sig!
But Soylent Green is people!
Fixed that for you.
Anything that treats a corporation as a person is evil and should be abolished. The Supreme Court decision that turned corporations into people (Santa Clara County vs. Southern Pacific Railroad) was one of America's first big steps down the road back to feudalism.
The Supreme Court decided back in the 1860's that corporations are people, with rights. That same court has been giving the more and more rights ever since.
Taxes allow governments to provide such excellent services as roads, education, etc. Read above for more. Unlike other giant corporations, google provides its services to everyone for free. If I had say which I relied upon more, paved roads or email, search and google maps, I'd have to go with the later. From a morality and did-i-get-my-money's-worth perspective, google gets no damnation from me for what it's doing. Could the government have provided such services that our insanely high-tech country and IT industry rely upon if it had a couple $billion more? Who can say.
My point is that by avoiding some taxes, google cheats the people out of some services just doesn't fly for me in the face of all that google does provide. Information is power, and google gives that away for free.
And Keynes was a fool. Japan has demonstrated that throwing good money after bad and neverending government stimulus investments in infrastructure only serves to prolong the depression, they've been at it for 20 years and we're just starting.
Look at all the money we spent and what it got us. Every day you see news of depression ending, and the economic realities saying otherwise. Every month the unemployment numbers are "revised" to worse numbers, after all the excitement about things improving has made sure no one's looking.
Houses were unaffordable before, government's solution ? let's make sure they stay that way, let's not depress prices. Let's give trillion $ to banks. Guess what, you can print money but can't force banks to lend. Can't force companies to hire. Government spends billions hiring people to repair roads and sidewalks that don't need repairing and creating a few TEMPORARY jobs in the process. Why not give away money for free. Some city in California spent like 100 million of government money to create 3 jobs. And now we say we need MORE "stimulus".
Look at who is going to have to pay for all this. The fucked middle class, who still can't buy a house but will have to pay more taxes for the luxury.
Even back in the days of kingdoms the rich tycoons didn't pay taxes.
Taxes are a way for the king (now government) to get income back from the individuals in the kingdom who don't naturally contribute (on balance) to the kingdom.
The likes of Microsoft, Google, Warren Buffett and Donald Trump don't have to pay taxes and shouldn't pay taxes because their contribution to society is giving others thousands of others jobs - and those thousands of others pay taxes - in essence they don't have to pay tax themselves because they have _CREATED_ wealth for the kingdom.
Company taxes are immoral and sneaky, because it is a double tax - shareholders and employees pay taxes when they selfishly earn income that they have a tendency to not share with others (by saving).
The moral to the story is stop bitching about the fact that you are paying taxes, and do something for society and try to become one of the people who employs thousands of others - and thus deserves the right not to pay taxes, rather than sitting on a wage, saving every penny you can, and bitching that the government is forcibly taking 30% of that to pay for services that you have otherwise done nothing to fund.
These loopholes are just a modern day incarnation of what used to be a gentlemen's agreement with the king.
Those moronic teaboogers, named after a porn character, Prof. Teabag, are the ultimate duped suckers. Protesting in support of the major tax evaders (Peterson, Koch, et al.) they sound the alarm against possible future tax recovery.
Do No Evil. Yay for hypocrisy!
This isn't illegal. This is smart.
Does this strike anyone as slightly.....Evil!?
Earlier today, this story had like a hundred comments. Now it has almost a thousand. It was pointed out way early that they fucked up the headline. Bad journalism. Apparently the sensationalist headline worked, because you all generated a lot of page views here. Geeze.
Good for Google.
Well, actually... good for Fidelity Investments, BlackRock, Vanguard Group and all the other investment groups that are the top 10 Google stockholders.
Well, actually... good for anybody who is a Google stockholder, or has a 401k with an investment company holding Google stock, or anybody who buys services from Google, because corporate taxes are a cost of doing business and those costs would have been recovered from higher fees.
I bet a lot of slashdot readers benefited in some way from Google's perfectly legal tax strategy.
Actually, a fair number of people get net income from the IRS because they get "refundable tax credits" and the Earned Income Tax Credit. Most tax credits either reduce your taxable income or reduce the amount of tax levied, but in any case, you can never end up with anything less than $0 on the "tax owed" line, so you simply get all of your withheld money back.
ALL of my withheld money back? I think you are forgetting about Medicare Tax and Social Security Tax. Those two don't even show up on the form as an option to get back, and the EITC is nowhere close to what is withheld by those two.
Any talk of "Net Income from the IRS" is laughable until there is a standard deduction or refund of Payroll Taxes.
C'mon mods, seems like a perfectly reasonable comment to me.
The facts are that the ultra-rich do NOT do their taxes. More importantly, they do not have much of a clue about how was paid. Or how many were helped by them.
What they know is that they pay top dollars to top accountants, including tax guys, whose jobs are to help make money and then keep it.
I prefer the "u" in honour as it seems to be missing these days.
"In a sense, he [the CEO]'s a hostage"
Except that it seems it tends to be the other way around. Golden parachutes, anyone?
The only person who really pays ANY taxes is the consumer. All other taxes are simply passed on to the consumer in the form of higher prices.
Imagine if we stopped taxing foreign income? Would Google and these other companies rather have the money here to use? Certainly. How many jobs could be created if the money was repatriated?
Convoluted tax laws that no one understands creates these rules, Google is just following them.
There is a better way, go look for yourself at what the Fair Tax could do for all of us. The poor are no longer taxed at all, the rich have no loopholes to use. It's fair, honest and simple. Everything Washington hates.
Corporations are not real. They can't possibly make use of public works, since they don't exist. I would submit to you that every time you would say a corporation is using a public service, I can actually find a real person who is making use of it. That is the person who should pay for it, so that he will be aware of what it costs. The corporation should not pay for it because it is not aware, and it does not care what it costs.
I fought this one for ages. But the definitions have changed. For the past few decades, liberalist == collectivist. So has conservative. The only meaningful difference has been the flavor.
I hated it (more than I can possibly say) when I learned this lesson. There's no way to sugar-coat it. There isn't much time left to try. If you happen to be younger than me...I apologize. I'm trying to talk other people into paying attention to the mess our grandparents created.
almost all american megacorporations have been doing it for decades. these, or other means to rip the govt. off. the ones like wb, warner, this, that.
the thing is, if you dont do it yourself, they eventually surpass you in power and buy you out. so, its a survival matter.
Read radical news here
how they avoid paying taxes to the state of Washington. http://crosscut.com/2008/02/02/microsoft/11167/Microsoft-s-$528-million-Washington-tax-break/ They probably have tactics for avoiding federal taxes as well. I think all large companies do.
And you shouldn't stop there, pointing the finger at "the corporations". Really, come on, the corporation doesn't enjoy expensive holidays, 8 figure incomes, perks and dinners and gifts galore, and a big fat bonus cheque at the end of the financial year. That money that "corporations" make goes directly into the pockets of .... the shareholders, the owners, the speculators, the corrupt and their cronies. And the executives - why do you think they all want their remuneration measured in company stock? They want "in" to the moneyed class, can't really fault them for that either - humans are selfish. Whether you want to admit it or not, the corporation is a vehicle for the class war, rich vs. poor. The corporate laws are instituted, regulated and manipulated to funnel total income towards those that have the most already. The rich-poor gap is widening, everywhere.
You can not tax the "customer" adequately to compensate, because our charming rich neighbours go spend their money in other jurisdictions - you get shafted twice, chum, cause they're paying whatever tips they pay to a Thai waitress, not the one in the boon-docks in mid-America.
You must tax elsewhere than purely on spending - short-term capital gains is the best mark for the best result for most of society. A transaction tax on the stock market would nail the speculatory thieves at the same time.
Targeting corporations is nonsense - you have to target the REAL people hiding behind the corporate veil those that really do benefit from these re-distribution laws.
Why should Google bend over and pay US taxes on income earned abroad? The Irish have a low business income tax to attract companies (and jobs and the revenue and spending that come with them). Is Google wrong for taking them up on it? Keep pushing ignorant, anti-employer policy that not only chases jobs out of the country - but prevents outside earnings from being spent and invested here too. Good work. The US is nearly alone in fully taxing earnings brought in from foreign subsidiaries - at, I might add, one of the highest corporate tax rates. Most western economies charge taxes of http://tinyurl.com/2evo4om
3.5) If it is a house you have lived in for 2 of the last 5 years, the first $250k ($500k if you're married) of your appreciation is shielded from taxation.
http://www.bankrate.com/finance/real-estate/capital-gains-home-sale-tax-break-a-boon-for-owners-1.aspx
4) If you die this year, there is no estate tax at all. If you die next year (or beyond), the first $1 million of your estate will be shielded from taxation by an offsetting credit for each recipient (if you have 3 kids the total offset is $3 million--1 for each). This issue is active in Congress so both exemptions and rates could be reset this year.
http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States
Build a man a fire, he's warm for one night. Set him on fire, and he's warm for the rest of his life.
But corporations are people!
Corporations are organizations of people.