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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 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.
But is that really true, the government wasting most of it? OK, no organization can be perfect. I accept that. But if there were no government spending on promoting the "general welfare", you might actually be less prosperous than you are now, despite your lower tax burden.
This may seem counterintuitive. Governments, at various levels, can provide roads and an educated populace, to name just a few of the more apparent benefits. These work to increase the value of the people's labors. When you can sell your widgets across the state, the nation and even the world, then you can potentially sell more widgets. When you can hire employees that already know how to read and you don't have to teach them, that's a direct benefit to your business.
But you don't have to believe me or even accept my explanation that taxes collected and spent reasonably actually increase prosperity. Look at data from the World Bank, or the CIA Factbook, or the WTO or wherever you like. Compare the GDP per capita of nations to their effective tax rate. Notice that once your tax rate gets outside the approx. 20-45% range your GDP per capita drops. (There are exceptions to this, of course. Countries with huge resources w.r.t. the size of the population do just fine at any tax rate -- Kuwait's a good example of a country with low tax rate due to their large oil wealth.)
I am not a crackpot.
Who gets back more money than they paid? Certainly, when I was young and poor, I got money back at the end of the year, but never more than I had paid in withholding. I see people make this claim all the time, that poor people get more money back than they pay in taxes, and I just want to know, uh, how do they do it?
No one I know vilifies the rich for being successful. In fact, people tend to idolize successful achievers. IF they deserve that success. People love it when smart, plucky, hard working go-getters make it big, but they hate it when conniving sociopathic weasels do. And quite frankly, for every one upstanding rich man who made it big without stepping on anyone along the way, there are ten selfish, amoral pricks who fucked anyone and anything that got in their way. It's not the bad apple that spoils the rich bunch, it is the one lone good apple that somehow resists the all encompassing rot.
Now look at the people who really make a difference, the scientists and engineers who actually make the world a better place. Despite the fact that there work is infinitely more important than that of so called 'industrial leaders' who are mere paper pushers adding nothing of benefit to human society, these scientists and engineers are almost never rich, unless they come from a rich family, or happen to be sociopathic enough to stab their friends in the back when the time comes.
Remember, if you are making a quarter of a million dollars nowadays, you are barely upper middle class. "Rich" doesn't start until you hit eight figures. I know a lot of middle class Americans think they might become rich someday. They won't.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
But not before people of extreme wealth were funding groups intended to spark something like the tea party. These are the elites who instigated and control (inasmuch as there is control) the tea party.
You're deluded if you think the tea party is pure grassroots. It's not. And if you consider yourself a tea partier, please ask yourself why people like the Kochs are willing to spend millions astroturfing a group you consider yourself a member of.
And as for the banning of Republican speakers... did that ont serve its intended purpose? Making the Republican party go hard right economically, to the eventual benefit of people like the Kochs?
"Trolls they were, but filled with the evil will of their master: a fell race..." -- J.R.R. Tolkien on Olog-hai
THE TAX SYSTEM EXPLAINED IN BEER
Suppose that every day, ten men go out for beer and the bill for all ten comes to $100 If they paid their bill the way we pay our taxes, it would go something like this
The first four men (the poorest) would pay nothing. The fifth would pay $1. The sixth would pay $3. The seventh would pay $7.. The eighth would pay $12. The ninth would pay $18. The tenth man (the richest) would pay $59.
So, that’s what they decided to do..
The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve ball. “Since you are all such good customers,” he said, “I’m going to reduce the cost of your daily beer by $20”. Drinks for the ten men would now cost just $80.
The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free. But what about the other six men? The paying customers? How could they divide the $20 windfall so that everyone would get his fair share?
They realised that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer.
So, the bar owner suggested that it would be fair to reduce each man’s bill by a higher percentage the poorer he was, to follow the principle of the tax system they had been using, and he proceeded to work out the amounts he suggested that each should now pay. And so the fifth man, like the first four, now paid nothing (100% saving). The sixth now paid $2 instead of $3 (33% saving). The seventh now paid $5 instead of $7 (28% saving). The eighth now paid $9 instead of $12 (25% saving). The ninth now paid $14 instead of $18 (22% saving). The tenth now paid $49 instead of $59 (16% saving).
Each of the six was better off than before. And the first four continued to drink for free. But, once outside the bar, the men began to compare their savings.
“I only got a dollar out of the $20 saving,” declared the sixth man. He pointed to the tenth man,“but he got $10!” “Yeah, that’s right,” exclaimed the fifth man. “I only saved a dollar too. It’s unfair that he got ten times more benefit than me!” “That’s true!” shouted the seventh man. “Why should he get $10 back, when I got only $2? The wealthy get all the breaks!” “Wait a minute,” yelled the first four men in unison, “we didn’t get anything at all. This new tax system exploits the poor!” The nine men surrounded the tenth and beat him up.
The next night the tenth man didn’t show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!
And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas, where the atmosphere is somewhat friendlier.
I'd love it if I was only taxed twice.
1) I get paid, they take taxes.
2) I buy something like a house, I pay sales tax.
3) Then continuing to own that house, I pay a % of value on that house as a tax every year.
3.5) if I sell the house, and make a net profit over what I paid, I pay a tax on that profit as income"
4) if it's a valuable house/property, if I will it to my children on my death, they get hit with a massive estate tax.
It's a great system....if you're a government.
I sell my hammer to my neighbor, according to the government I should be paying taxes on that transaction. Why, again, are they entitled to that?
-Styopa