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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."
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.
Living With a Nerd
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.
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
Everything I need to know I learned by killing smart people and eating their brains.
Yes, and a good chunk of them are rallying on the streets every day to try and keep it that way.
Bless'em
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/
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.
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.
Python: 'And then suddenly you have a language which says "we're all stuck with whatever the whiniest coder wants".'
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?
(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.)
More in absolute terms, but proportionally much less. Sales taxes are regressive - they make poorer people pay a greater percentage of their income as tax. A poor person can't afford to save, they spend everything that they earn on essentials. A rich person has numerous investments and savings that would not be taxed - they spend a much smaller proportion of their income.
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Absolutely agreed. The anger toward tax evasion is entirely misdirected. If you want to point fingers, you can aim them straight at the supreme court, who made the decision that money == speech, and therefore bribary == simply exercising one's rights, and then proceeded to rape the corpse of the American system of democracy in their "Citizens United v Federal Election Commission" ruling.
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.)
That is quite possibly one of the most stupid and naive things I've ever read. However, as a person whose household income is over $250k, I'd like to thank you for your efforts to make me wealthier. As you note, I'll put all that money I save in the bank, and then it will be spent eventually when I retire in Europe. Spent in Europe, that is. Resulting in 0 sales tax in the US. Cheers.
Speaking of stupid memes (reference to your other post) what on Earth do you believe the relevancy of the percentage of total tax revenue to be?
6th grade math: if the tax rate on rich people goes down and the percentage of total income tax revenue from them goes up, what does that imply about the relative worth of all groups? The rich are getting richer. A LOT richer. Despite all this economic downturn I've heard so much about.
1st grade logic corollary: given that money is an imaginary metric with a constantly changing but constantly FINITE global quantity, the lower and middle classes are paying for it.
Raising the tax rate on the rich would not be starting a class war. It would be the bottom 90% finally getting around to fighting the class war that the rich started long ago. I know, I know, I'm a heretic, Reagan was the best president ever, and deregulation makes everything all better.
the top 10% of taxpayers paid 55% of total federal taxes in 2007. The lower 90% of taxpayers paid the other 45%.
In 2007, the top 10% of the population owned 73% of total assets and 83% of financial wealth in the US. If they're only paying 55% of the total taxes than the adage that "only the poor pay taxes" does in fact ring true.
Give me Classic Slashdot or give me death!
For the most part, it is very obvious what is illegal and what is not. Many of the complications are there to ensure that the punishment is just. You would not like a system that was teachable to high school students in a semester.
They may have paid 44.3/61% percent of the taxes, but THEY CONTROL OVER 90% OF THE WEALTH. The way I'm looking at it, I'm still getting screwed. They have 90% of the money, they should pay 90% of the taxes. Hell, I'd be satisfied to go back to the way it was under Reagan, when they paid 70%. But this 44% is bullshit.
It sure is convenient to forget the existence of sales taxes, state income taxes, and the various payroll taxes that everyone collecting a paycheck pays. Poor people actually pay quite a bit in taxes, and it tends to hit them a lot harder.
Check out my world simulator thingy.
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.
You forgot the part where everyone but the richest guy is working for a living, and the richest guy doesn't, since he gets a cut off of everyone else's work.
I hear this a lot. Can you back it up. And no Bill Gates and co don't count. These guys worked bloody hard and took big risks to get their respective companies started and keep them going. They didn't just sit around collecting everyone else's "tax".
I think its just jealously. You think you deserve to be "rich" more than the next fellow. Well you don't. Some are rich because they worked hard and got a little bit lucky, some are rich because they got lucky and some are rich cus daddy was lucky. But that makes them no less deserving of wealth than you.
The Grey Goo disaster happened 3 billion years ago. This rock is covered in self replicating machines!