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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."
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.
naa, our government would just piss it away on dumb crap anyway. No loss.
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.
That's a lot of politicians huge salaries and pensions
fixed that for you
The problem is, it's not just Google, all big companies do this. And because they do it, they get a big advantage over the small and medium businesses that are stuck paying 35% because they cant pay an army of lawyers and accountants to setup and run these loopholes. Congress should either close the loopholes, simplify the tax code so fewer loopholes are possible, or get rid of corporate income tax entirely to kill the whole incentive to play the "tax haven" game in the first place. At least that way you level the playing field and cut out a parasitic, wasteful element in the form of the army of tax attorneys and accountants every Fortune 500 company must employ.
It's not tax evasion. Tax evasion is when you use methods that the IRS has explicitly disallowed.
Maybe, instead of looking to soak the rich, you should ask how you can avoid taxes as well. Hint: just because you don't run a global corp doesn't mean you can't invest in assets or ventures that will reduce, defer, or eliminate your tax liability.
Gamingmuseum.com: Give your 3D accelerator a rest.
I am against all income taxes, so I am applauding all companies that manage to pay as little as possible within the existing system, I am for them paying even less and nothing at all as INCOME taxes and I am also not interested in paying ANY INCOME taxes.
You can't handle the truth.
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.
So you think it is perfectly okay to shift revenue earned in one country to another country to avoid taxes?
As long as it is done legally, yes.
That's the perfect definition of "okay".
Would you have some other rules you would like to apply, and are you willing to accept the rules I dream up in return?
We have laws precisely to reign in people like you.
Sig Battery depleted. Reverting to safe mode.
It is impossible to enact a tax cut for people who already pay no taxes...
Funny you should say that - with all the tax 'credits' you can easily end up getting free money from the government through your TAX return. If they're gonna sneak in more welfare, at least don't use the IRS to funnel it.
Tiller's Rule: Never use a word in written form that you've only heard and never read. You will end up looking foolish.
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.
So you'll end up spending more in European taxes to avoid spending less American taxes. Enjoy your European retirement. Your dollars will go so much further over there. Allow me to quote you and say, "That is quite possibly one of the most stupid and naive things I've ever read."
There is no "I disagree" mod for a reason. Flamebait, Troll, and Overrated are not substitutes.
I hope you realize that taxes on corporations are also taxes on individuals, namely shareholders, employees and customers. What are the pros and cons?
Pros: government gets more money for its spending programs. Some poor people get a handout, some unemployed get an unemployment check, some perfectly good road gets resurfaced because the contractor's wife has a cousin in the local government etc etc. Government bureaucrats in charge of that extra money don't really have an incentive to be as careful as with their own money, hence the legendary government inefficiency and corruption, so a lot of the money gets wasted.
Cons: there is less money for the shareholders so there is less investment money available overall (fewer jobs), there is less money for the employees so some of them get laid off (fewer jobs) and customers have to pay more for goods, which means inflation, which ultimately means fewer jobs as well.
Negative moral value of force outweighs the positive value of good intentions.
As the article itself points out, poor people still pay Social security, Medicare
Ha, ha, I thought those were not taxes but "insurance". Get on the message, comrade.
These represent a far bigger proportion of a poor person's income than a rich person's income.
So what? The top 10% are already supplying 70% of the income tax receipts and benefit less from that money than the poor do. Why in your opinion do the hard working have a duty to carry the lazy on their shoulders? They are doing far more than enough already.
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.
Maybe there is zero discussion because people forgot about it. A completely random once off $400 tax credit based on a million conditions is hardly in the same league as tax cuts of several % across the board.
Negative moral value of force outweighs the positive value of good intentions.
If you are against corporations being treated as a legal entity, why are you for taxing them?
They have 90% of the money, they should pay 90% of the taxes.
First, as a matter of principle, why? In what way are you and I part of a some borg like organism that means I have some kind of duty to support you just because I have more money than you? Secondly, as a practical matter, who do you think will provide investments that create jobs if you tax the rich at 90%? Government? Who will you go to for financing when you want to start a company? For that matter, who will provide the funding for any kind of opposition to the government? Government itself? You do realize that just about every liberal cause that made any success was financed by billionaires: Vandebilts, some Rockefellers (not the ones who created the wealth) etc in the past, more recently Soros.
Negative moral value of force outweighs the positive value of good intentions.
They do not control over 90% of the wealth. They earn over 90% of the wealth. If you do not like it, go earn some wealth.
I would also suggest you read Atlas Shrugged...
Really? Those "poor and stupid people", as you put it, don't get tax credits (handouts) from the tax revenues paid by the richer ones? They don't have jobs in companies owned by the richer ones?
Every time the tax rates are lowered, the revenues go up. Even John Kennedy figured this out when he did it.
Tax cuts are good for the economy as a whole, and for the US government in particular, since it means that the people who earn the money get to keep more of it and the government actually gets more, too.
There are lots of normal Americans in the Tea Party movement, and your insults do nothing to further your arguments.
Which are not income taxes, which they pay 0.
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.
That's a lie. You can't "keep poor people as the only ones who pay taxes" because they are not the only ones who pay taxes, and they aren't the ones who pay federal income taxes at all.
You refuse to understand the difference between a tax cut and patent welfare. A tax cut means you give less of what you have worked to earn to other people; welfare means other people are giving the money they earned to you. The "Bush tax cuts" are tax cuts. "Maying Work Pay" is welfare. The former deals with money you've earned, the latter with money you are being handed for doing nothing.
Nobody's stopping him from cutting a big fat check to the Treasury. If he really believes he isn't paying enough, he ought to cash out some of his stock and write a billion-dollar (or whatever) check to Uncle Sam. Until then, I invite him to enjoy a nice big cup of STFU.
20 January 2017: the End of an Error.
Obama put it very clearly. He would raise taxes even if it meant a decrease in tax receipts to the government. Like you, he is more concerned with some perverted idea of justice then actually doing the right thing.
You are a troll, and not even a very good one. You throw around insults and talk a big game, but you crack under pressure. "Corporate mon/oligopoly is the most inefficient way to distribute resources or run anything". Well who is advocating that straw man position? Oh, that's right, it's the evil millionaires and billionaires that have the unwashed masses dancing to their tune.
The millionaires and billionaires have a tiger by the tail, not on a leash.
You are a little confused. I can understand why too, with all the political bantering being tossed around and all over this subject. In fact, all of the supposed studies making the claim that the middle class pay the greatest percentage of their income to taxes confuse lifestyle choices and taxes based around use with income taxes which creates a picture telling a lie.
The rich still pay more, the differences is in the type of income and shifting income to total wealth. If you had 100 hares of some stock worth $1 (lets say IBM) as your sole source of income, and the shares of the stocks increased by 10 times their value at the beginning of the year but only paid $1 a piece in dividends, then you made $10 regular income, increased your wealth by a factor of ten, and if you sold share, now have a $10 capitol gain but your wealth is reduced to 9 times. The 80 some dollars in increased wealth doesn't count as income until you sell out or transfer the investments.
The rich have the benefit of their income primarily coming from the sale of investments which is locked in at a 15 or 17 percent taxable rate on the capitol gains with dividend interest going at normal income scale. This is done for good reason too. If you made 2 million a year, or 40k a year in this way, you would be paying the same percentage of tax on the capitol gains. However, when we count normal income from salaries and interest payments, you get screwed in that the progressive tax rates taxes more when you make more on the more money you make. Use taxes on the other hand, taxes like gasoline are not designed to be accounted for against income but with the use of something.
Lets take the gas tax for instance, it's purpose is to repair the roads and pay for transportation related items based on those that use it. Poor people tend to have second hand cars that get worse fuel economy, sometimes they have to drive further to gainful employment, they use the roads more and pay more. As a percentage of their income, it will cost more. But that's not a fair comparison because it's intent is to be paid by the people using it.
Now you can call separating that out as voodoo economics or trickle down economics, but in the end, it simply shows that you aren't aware of what is actually going on or that taxes designed to recover costs per use were never intended to be compared to income levels.
First of all, my previous comment is certainly not a troll (do you know what a troll is?) but it has been modded as such because it mentions the simple and obvious truth that rich people tend to get rich by working harder and poor people tend to stay poor because they are lazier, which doesn't agree with the pc attitudes of the modders.
I'll say it again: Not a single Tea Party candidate anywhere in the country has called for the elimination of Social Security or Medicare.
Please, say it again if it makes you feel good but it doesn't change the fact that it is completely untrue. Many tea party candidates are in favor of (reforming/privatizing/making optional) SS which all amounts to abolishing. I am not going to go searching for quotes, just google "tea party candidate social security".
I personally very much support eliminating these programs. I want to see them GONE. Do you? If yes, then good, but in that case, how do you reconcile this with the "no compromises" attitude of the Tea Party, which is clearly compromising on this issue? If no, then you're just being hypocritical, since you evidently support socialist "insurance" programs.
It is in the 10 points voted in by the Tea Party supporters Contract From America ( http://www.thecontract.org/the-contract-from-america/ ) to examine all government programs for constitutionality and a number of prominent Tea Party people have called SS unconstitutional. BTW, are you applying the same criteria for what you call hypocrisy to other parties as well? For example, all Democrat senators voted FOR Patriot act, except for one, Russ Faingold. Does that mean that Democrats are being hypocritical or inconsistent? No, it means that Democrat party as a whole supports PATRIOT act strongly, even though there are some dissenters as is always the case. Same with the Tea Party. As any most political movements, it is directed by the broad areas of agreement, not by blind following of a precise dogma. Less government, lowed taxes, free market. As it happens, I am in favor of abolishing SS and Medicare but I can support candidates who are broadly in favor of reducing the scope of the federal government even if they compromise on specific programs.
As many others have pointed out, the top 10% own far more than 70% of the wealth. Paying only 70% of the taxes is not even a fair share, let alone "far more than enough."
And what is the relation between how much someone has and how much they are due to pay in taxes? Someone who saves more (even after paying their income taxes) is supposed to be taxed again more than someone else who spent more of their money? Why?
Attacking the Making Work Pay credit on the grounds that it is "once off" is a very strange accusation. Does that mean you would support it more if it were permanent? And if the "once off" nature of the tax credit is a major objection, why aren't you lobbying to make the credit permanent, rather than opposing it bitterly?
No, if you read my reply again you will see that my opposition was with equating one of the hundreds of obscure government programs ( http://funding-programs.idilogic.aidpage.com/) with income tax cuts.
Negative moral value of force outweighs the positive value of good intentions.
I don't think that's the problem at all. It's more like we don't punish success because it leads to less people becoming successful. And it's not that they think the 250k and up crowd can't afford to pay the taxes, it's that they shouldn't be singled out to pay for the demands of less successful people.
250k is an arbitrary number anyways. It's not even in the original bush tax cuts. All it seems to be doing is creating conflicts that shouldn't exist. According to the WSJ, the top tax payers are paying more with the cuts then they did in 1990. The interesting part is that with the enactments of the bush tax cuts outside of the first years it was in place, growth in income tax revenue increased at a pace as good as or better then in Clinton's term until the start of the recession and more taxes were collected then the costs of the tax cuts.
And "not a dime" on those under. And yet, when the Bush tax cuts go away, tax rates will go up. For everyone. http://www.smartmoney.com/personal-finance/taxes/how-the-expiring-bush-tax-cuts-affect-you/ It is a deliberate choice at INACTION, which means it is a choice on the part of Obama to let everyone's taxes go up. He lied. There is no other way to say it.
He also admitted that he knew that increasing the rates on the "rich" would mean lower revenues. He said he'd do it because it was "fair". He doesn't care if there is a budget shortfall, or that by cutting the taxes on those who pay the most you actually get more money out of them overall, he's willing to cut off OUR noses to spite OUR faces.
Other than by having money the "poor" are better consumers and buy more things. It's not a zero sum game.
You are right though...reduce a company's tax burden and their revenues go up. Not their headcount...
Yes, when a company has extra money, they do tend to buy more equipment and people to run it, and are able to pay higher salaries.
Which in turn go to dividends that make the rich investors richer.
And by "rich investors", you mean everyone who has a investment retirement account. Do you think I'm rich? I'm not. I do have a considerable amount of money in the stock market because I've been working here for a long time and it has accumulated. I'm a "rich investor", according to you.
Oh, and there are plenty of Average Americans that are teabaggers. Reading comprehension FTW - I said they won't benefit from the tax cutting proposals of the Tea Party...
There are LOTS of normal people in the Tea Party who will benefit from lower taxes. Especially the continuation of the Bush cuts. You don't have to make $250k+ a year. Your insults are unwarranted.
You know what *I* would support? Flat Tax. Every man, woman, and child pays x% of their income to taxes. Make it so the first $50,000 or so earned is non-taxable entirely, and then you pay.
First you say "flat", and then you start making exemptions. How about mortgage deductions for poor people? Stop those? Medical deductions? Stop those too?
Google paying 2% income tax vs my 30% IS NOT FAIR.
Google is a CORPORATION, you are a person. Google is made up of people, all of whom pay taxes on their income.
But the teabaggers want lower taxes...not fair taxes,
Your continued insults are not supporting your arguments. The Tea Party members want lower taxes and fair taxes ... it's just that YOU don't agree with what they think is fair. That doesn't mean they are asking for unfair taxes. I'd be wasting my time if I argued that YOU were demanding unfair taxes, so why do you continue this tack?
Because noting pisses off a conservative with balls in his mouth more than having to give up a goddamned dollar to anyone but themself.
Yep, I guess it't not worth the effort of talking to you because you can't stop being deliberately insulting. Also, you are lying again.
Well, if your first lie gets exposed, change what you meant to say and maybe nobody will point out that it is a lie, too.
Nobody said "no regulations."
I'm not validating the argument, just pointing out that they are, indeed, advocating for a lack of regulations.
Fewer regulations is not the same as none.
Notice that the Bush tax cuts were in effect for a while before the housing bubble burst, and yet there was minimal (if any) job growth.
And notice that the Daddy Government threw billions of dollars into the economy and we're still not producing jobs, even though the promise was that we'd not get above 8%. Guess what people are looking forward to? The tax cuts going away. If you think business people are not planning more than six months in advance, you are a moron.
The biggest growth in history of the US took place when the top tax rates were cut. Moving them back up when we desperately need growth again is just lunacy. Inciting class warfare is one way of keeping people in control -- divide and conquer.
Diminishing the reward for success isn't the same as punishing success.
If you are taking/diminishing because of the success, it's punishing success.