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."

Comments

So?

[JesseL]

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?

[Fastolfe]

This is not a zero-sum game. Government spending is not tied to tax revenues. Increasing corporate taxes does not automatically decrease personal taxes. It is more likely that increasing corporate taxes just means more government spending. They probably won't even pretend to reduce the deficit with it.

Re:Corporations shouldn't pay any taxes.

[mosb1000]

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.

Re:Headline Is So Very Wrong

[icebike]

What they did was perfectly legal.

There was a time when it was legal to deny serving or employing someone due to their race. Did that make it OK? Sorry for the strawman, but come on...just because it's legal doesn't mean it's right (and vice versa, naturally.

Ok, lets take your (implied) assumption, that Google should pay taxes on its world wide earnings regardless of the country in which it was earned.

Ok? Sound reasonable so far?

Now, google has to follow the law in every country where they have an office and a corporate structure. So same rules apply to all those countries. Earnings in France, US, Japan, etc, all have to have taxes paid in Britain, and again in Norway, and again in China. Never mind that the money was earned in, and kept in the USA.

Has the flaw of your assumption dawned on you yet?

You earn a dollar in the US, and just because you have a post office box in Australia you have to pay their taxes too?

You drove thru another state on your summer vacation. Are you going to file income tax in that state? You used their facilities, roads, etc. How bout paying your fair share?

Any bells going off yet?

Re:So what.

[RightSaidFred99]

And? They literally burn the money? In that case, their stockholders should sue them.

The money will get spent. That said - any kind of corporate perks the higher ups get should be flagged as taxable income for whoever receives them.