Schmidt On Why Tax Avoidance is Good, Robot Workers, and Google Fiber

Bruce66423 writes "Eric Schmidt said that a £2.5 billion tax avoidance 'is called capitalism' and seems totally unrepentant. He added, 'I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate.' One must admit to being impressed by his honesty." Schmidt also says that if you want a job in the future you'll have to learn to "outrace the robots," and that Google Fiber is the most interesting project they have going.

Comments

Question

[Man On Pink Corner]

How many people reading this intentionally pay more tax than they are strictly required to?

Re:Question

[erroneus]

This is spot on. No one would.

Here's the problem: Those laws/rules/loopholes/allowances etc were created by the money influences which are benefiting from them.

So if tax policy were a naturally occurring thing, I would say "yes, let's take advantage of our knowledge and understanding of nature!" But it's not and these tax avoidance structures haven't always been there.

The government did not change the rules without cause. Find the cause and you will find the culprits.

Did Google help to create the rules? Not likely... the rules were in place, most likely, before Google rose to power.

The 'news' and subsequent inquiries seem to want to focus on the tax [non-]payers. Ostensibly to determine if they did anything 'illegal.' I'm willing to bet they have not done anything illegal. The real problem and where the focus should be is on the law.

Re:Question

[Anonymous Coward]

And how many people setup offshore bank accounts and front companies etc to avoid tax?

Re:Question

[MacTO]

If I had to venture a guess: most of us. Very few individuals have the money to find those legal loopholes or lobby governments for tax incentives. Even if we did, the return on investment would be in the red.

Re:Question

[DJRumpy]

I disagree. I think they are focusing on exactly that; abuse of the tax system. The current crop of GOP senators are very business friendly, and money plays a larger role in politics than in any time in the past. I can understand why Google takes this approach, but to appear unapologetic is just rubbing salt in the wounds.

Take individuals for instance. They get a very specific set of deductions, and are expected to take them. Because of the special interests and years of corruption in congress, we have businesses making billions in profit, and paying almost nothing in taxes. It may be legal, but it doesn't make it right. The system is geared to give every benefit to a business, and none to middle America.

What they are highlighting is not the fact that is illegal (it's not), but rather that it's unfair, which it is.

Re:Question

[MightyYar]

Why pick on the GOP? They are certainly not alone. The Democrat's current position is focused on "rates", which is clearly anti-reform. As long as the tax code is complex, it will favor those with the resources to exploit the complexity.

My personal opinion is that we should eliminate the corporate tax rate, removing the shenanigans altogether. Make up for this by making dividends and capital gains taxable as income.

Re:Question

[Instine]

me. I do. I could play all kinds of games to get out of the 40% rate I pay on half my salary. But I'd rather the NHS got it, than a private healthcare system I sponsored with my avoided spend on tax. Because thats better for me? No. Because that's better for the country I live in and the the one my daughter will grow up in? Yes.

Re:Question

[kenh]

Home Schooling & Private schools are, apparently, unheard of by you.

Very few hospitals are run by municipalities, most are run by either non-profits or charities, with a some being for-profit.

The public roads argument is interesting - do employers pay for roads so employees can get to work and so that they can ship and receive goods, or do employees pay for roads so they can get to work and buy the goods others have manufactured/raised/offer? The answer is both.

The original poster's point, which apparently escaped you, is that no one goes out of their way to OVERPAY their taxes, and someone who pays all their taxes as defined by the law (as Google does) is doing nothing wrong. It may not comport to a simplistic view that "they should pay more" but in reality, they are simply availing themselves of the incentives our lawmakers provided them.

Don't be angry with Google for following laws that allow them to pay less in taxes than you think they should, be angry at the lawmakers that craft the laws that allow them to do so.

Re:Question

[fuzzyfuzzyfungus]

How many people reading this intentionally pay more tax than they are strictly required to?

How many people reading this have any significant ability to adjust their 'nothing we did was other than legal' tax rate to be substantially different from their 'time to fill out the tax forms' tax rate?

That's the thing: complaints about corporate and HNW tax-dodging are not based on the premise that everybody should just voluntarily chip in an extra 10% for Uncle Sam; but on the (largely accurate) perception that there is a little-people tax code and a quite distinct, and very, very generous indeed, tax code for people who can afford the requisite caymans subsidiary, 'tax opinion letters', and suitably talented accountants.

It's like answering a complaint about criminal justice for poor schmucks with overworked public defenders vs. celebrities with fancy lawyers by asking "Well, did you go and voluntarily turn yourself in and plead guilty for all that jaywalking you've done?". That's orthogonal to the point: The complaint is not "some people aren't volunteering!" but "some people are forced, and some people would only be held to anything resembling what the rest are forced to if they were to volunteer."

Re:Question

[penix1]

Don't be angry with Google for following laws that allow them to pay less in taxes than you think they should, be angry at the lawmakers that craft the laws that allow them to do so.

There is plenty of anger for them both and then some. Your argument is specious because those same corporations are buying those same politicians specifically to favor them with laws written by the corporation lobbyists. Of course the tax system favors them since they wrote the tax loopholes this dumb ass CEO is espousing as virtuous.

Re:Question

[Liberty.45ACP]

How on earth do you think the government subsidies home schooling? We home school our son and pay property taxes that include subsidizing government schools. In the few areas that have some sort of voucher system, then those people may be getting some of their money back that was stolen (taxed) to support government schools.

Re:Question

[Mr. Mikey]

Taxation isn't theft.

Taxation is the honoring of a contract, the social contract you are implicitly a signatory to as a citizen of a civilized society.

You gain the benefit of roads you can drive on, tap water that is available and safe to drink, house fires that get put out, an educated populace (you know, all those citizens who don't happen to be your son), and so on.

You pay for those benefits via your taxes.

If you don't wish to enjoy those benefits, you are free to go somewhere like Somalia, where you won't be burdened with them... and neither will you enjoy all those benefits.

Good luck with that.

He's right

[Cornwallis]

I can't fault anyone for taking advantage of legal loopholes.

If you want to blame someone go after the Sociopaths in Washington(TM) who created the U.S. tax code.

Please. Someone go after them.

Re:He's right

[girlintraining]

Please. Someone go after them.

Many have tried. They're all awaiting trial now or in jail. The main purpose of law enforcement is to maintain the status quo. You're not going to beat the system working within it or exposing yourself to it. That's been proven since the 60s in this country when, depite massive public opinion against it, the war in Vietnam continued. It's going to take more than words, banners, and a few picket lines to fix this problem -- our law makers do not listen even when they are surrounded by thousands of angry voters, because they know that voting and protest are both ineffectual. If you manage to get rid of one bad politician, another will take his/her place. The amount of effort required to overcome the bureaucratic inertia reinforcing and protecting these laws and legal mechanisms to extract money from the poor and give them to the rich is beyond the capability of even hundreds of thousands of organized citizens.

I cannot see this changing short of a major civil uprising.

Especially the robot CEO's

[Anonymous Coward]

I'm sure you could write a computer program to do a better job than 99% of CEOs... and think of all the money that will be saved on the obscene costs in have a human CEO.

Run Eric, Run. The robots are coming.

Do No Evil

[Anonymous Coward]

The more Schmidt speaks the less you can take the do no evil line seriously.

robot workers

[Iamthecheese]

Why would it be a good thing for us to work really hard so we can keep jobs by outpacing robot workers?

The goal should be 0% involuntary employment.

Socialism may win after all

[Gr8Apes]

First on tax avoidance: no one wants to pay taxes, but if everyone is taxed fairly, then this sort of nonsense resulting from favoritism in the tax code would not happen.

On the robot overlords commeth comment: Just about any halfway intelligent person can see that we're entering the phase of robot factories that produce products and that can repair themselves. Even factories producing robots.... These factories will take orders of magnitude fewer labor hours, and this movement will spread to other typically high labor industries, such as agriculture. Once those are converted, what then? A service economy can only employ so many, and food and basic foodstuff will wind up being almost free, other than energy costs (which could also be virtually free in this scenario) So what's left? Academia will only hold so many, and you only need so many managers/troubleshooters.

Re:Yeah. But what's "reasonably" angry?"

[serviscope_minor]

This is not about corporations making full use of tax credits.

This is about corporations licensing "IP" e.g. the name "Google" from some company in the Bahamas for almost as much money as they make (before the licensing) in a country such as the UK. As a result they appear to make no UK profit (since they have to pay so much for the name "Google") and hence have to pay no tax.

Basically it's about moving all actual profit offshore before it's taxed.

It might be legal, but it is unethical and it looks like lawmakers are looking to fix that loophole.

And FYI, that is something it is possible to do as an individual. Most people don't and those that do are generally looked on as scum.