Google May Be $1 Billion Behind In Tax Payments To France

An anonymous reader writes "Ars Technica reports, 'Technology giant Google has been delinquent on its tax payments in France for the past few years, to the tune of more than $1 billion in missed payments, and it now may be hit with a sizable tax penalty by the French government.' Google asserts that it has operated within the law in France, but the French government has reason to believe that in order to avoid French taxes, Google has been passing off some of its business contracts as Irish rather than French."

Comments

You mean "Le Google"

[TrollstonButterbeans]

FTFY

Re:You mean "Le Google"

[Anonymous Coward]

Wouldn't "Le Goog" be more French then one of them ass fountains?

Re:You mean "Le Google"

[Anonymous Coward]

so just like wesley snipes - they make a fuckton of money and still cant manage to pay there taxes

so just like wesley snipes - what a bunch of niggers!!

Re:You mean "Le Google"

[kthreadd]

Google is still Google. It's not like we say The Google.

Re:You mean "Le Google"

[Anonymous Coward]

Different languages have different grammar conventions. "le" isn't always translated as "the". As I vaguely remember, it is the phrase that would name "Google", not the word "Google".

Re:You mean "Le Google"

[JockTroll]

They've got the Metric System. They don't know what the fuck a goog is. They call it "Royale with Guglée".

Re:You mean "Le Google"

[Anonymous Coward]

Why would you use french grammar convention when referring to your own name just because you're in France?

So few

[manu0601]

After the french government committed to economic suicide with austerity policies (latest plan is to remove 50 billions euros from the economy), what is a little missing billion?

Re:So few

[cheesybagel]

Google, Amazon, Apple escaping taxes and it starts to add up to real money.

Re:So few

[bloodhawk]

I would not be surprised if between most of the major corporations that they owe the French more than 50 billion. Hate to cheer for a tax office let alone a French one but what Google et al do tax wise is fucking appalling and needs to be cracked down on by EVERY government.

Re:So few

[manu0601]

We have a good figure to start with: the share of GDP that goes to capital or labor. It moved a lot from the later to the former. Should we go back to 1980 values in France, workers (who cannot escape taxes as megacorporations can) would globally get a 195 billion euros bonus each year.

Re:So few

[Anonymous Coward]

You're making the classic Keynesian mistake that money in transit is money in the economy.

Re:So few

[ThatsMyNick]

A billion here and a billion there, and it begans to add up pretty quickly.

Re:So few

[AlphaWolf_HK]

In some countries, maybe there's some blame to be had for escaping taxes...but France is a whole other argument. I mean shit, 75% tax on the wealthiest has resulted in a lot of them just flat out leaving that country. It got so bad that their dear leader is now lobbying against his own tax plan; the same plan that put it there to begin with.

Here's a good read on the subject:

http://www.forbes.com/sites/je...

Re:So few

[manu0601]

I wonder why I have been modded down troll and flamebait. Is there anyone here that still believe austerity can benefit a country?

Re:So few

[Noah Haders]

there's a difference between structuring your business to avoid taxes, and not paying taxes that you owe. Goog is the latter. but I feel bad beating up on them lately, especially after the moto thing and their last quarterly report. desktop revenue down 9% even though clicks are up 26%...

Re:So few

[Anonymous Coward]

If they don't like the laws the company is free to not operate in the country. If they choose to operate there they must follow the law. I have no sympathy for them, they knew what the deal was when they stablished there.

Re:So few

[Anonymous Brave Guy]

The problem is that they are following the laws in these countries. The governments have the legislative powers and have created tax systems that don't work under these conditions, but instead of fixing the problem, it's politically better PR to just blame the big organisations for having decent accountants.

In cases where that creates a hostile public feeling toward a company, that can be a surprisingly effective strategy -- certain businesses that operate in the UK have recently changed their accounting practices so they declare more taxable income in the UK -- but usually the amounts involved are relatively small, just enough to counter the bad press with a good soundbite about how many million they paid in tax last year -- and it doesn't really work on businesses that utterly dominate their industries and/or don't deal much with the average guy in the street anyway.

Sooner or later, these governments are going to have to get their act together and fix the broken system properly, but I suspect a lot of them are hoping the next election will come and go first so either they have some breathing room or it's someone else's problem.

Re:So few

[kesuki]

you didn't provide links verifying your points. without links it is too hard for the people who regularly get mod points to mod positive, because if you want a soap box on slashdot you should use their journal system. having read the definition of austerity measures it is clear that the usa is also using austerity measures... the world is a complex place, though.

"After the french government committed to economic suicide with austerity policies" http://en.wikipedia.org/wiki/Austerity In economics, austerity describes policies used by governments to reduce budget deficits during adverse economic conditions. These policies may include spending cuts, tax increases, or a mixture of the two.[1][2][3] Austerity policies may be attempts to demonstrate governments' fiscal discipline to their creditors and credit rating agencies by bringing revenues closer to expenditures; they may also be politically or ideologically driven.

In macroeconomics, reducing government deficits generally increases unemployment in the short run.[4] This increases safety net spending and reduces tax revenues, partially offsetting the austerity measures. Government spending contributes to gross domestic product (GDP), so reducing spending may result in a higher debt-to-GDP ratio, a key measure of the debt burden carried by a country and its citizens. Higher short-term deficit spending (stimulus) contributes to GDP growth particularly when consumers and businesses are unwilling or unable to spend. This is because crowding out (i.e., rising interest rates as government bids against business for a finite amount of savings, slowing the economy) is less of a factor in a downturn, as there may be a surplus of savings.[5][6]

Re:So few

[smittyoneeach]

Should Google just buy France?

Re:So few

[PopeRatzo]

In some countries, maybe there's some blame to be had for escaping taxes...but France is a whole other argument. I mean shit, 75% tax on the wealthiest has resulted in a lot of them just flat out leaving that country. It got so bad that their dear leader is now lobbying against his own tax plan; the same plan that put it there to begin with.

What do personal tax rates have to do with a corporation paying corporate taxes? There are no "75%" corporate taxes in France?

A corporation has a choice in whether or not to do business in a country. Google has no problem doing business in countries with regimes with a lot worse policies than a 75% top personal tax rate.

Re:So few

[Blaskowicz]

Dear leader? The French president is more like Ronald Reagan than Dear leader lately.
The 75% for income above one million euros (after deductions), was a symbolic measure as it concerns very few people and is still not applied. Just stuff waived around to get elected. Same president had pleaded to renogotiate the treaty on European Stability Mechanism, but didn't. Not a single point or comma was changed. Now this government will get us in the Great Transatlantic Market, or whatever it's called in which US corporations will dictate their laws to the countries and European Union, putting an end to national democracy.

Dear leader my ass! We're trapped, with a presidency and governnement that have "socialist" in name but are right-leaning collaborationists, more in the way of Tony Blair and Gehrard Schroeder.

Re: So few

[Anonymous Coward]

Fuck you

Re:So few

[Krishnoid]

Goog is the latter. but I feel bad beating up on them lately, especially after the moto thing and their last quarterly report. desktop revenue down 9% even though clicks are up 26%...

For Google's case in particular, I also have to look at the services they've provided:

• High-quality email with the holy grail of spam filtering
• Basic office software in a browser
• A standards-compatible browser under constant development
• A phone operating system
• Mapping, search, and everything else

Since these are provided free to everybody, isn't this a tangible public service? Sure, Google's users are the product, but if one considers these as analogous to services provided under a government's mandate to use their taxes to provide for the general welfare, why shouldn't Google get a special tax break? It sure beats the return on the multiple $1E9's spent beating the crap out of some foreign country.

Re:So few

[skegg]

Very true.

France, join the club: Apple, Google facing tax crackdown

Re:So few

[flyingfsck]

Sure, but Google (and others) are obviously trying to pass off work done in France (or other EU countries) as work done in Ireland, while the Ireland office obviously has very few staff and cannot possibly do all the work they are purported to be doing. This is a very obvious tax fraud and it is quite amazing that these mega corps think that they will get away with it forever. They should get audited and double taxed. Simple as that.

Re:So few

[Anonymous Coward]

How is it "obvious tax fraud"? Tax fraud is bad but if you are going to throw claims like that around, you need evidence.

Also it would probably help if you didnt talk about "where work is done" -- it makes it sound like you dont understand taxes.

Re:So few

[Vapula]

The problem is the Ireland tax loophole. It's abused by Google, Apple, Microsoft and many other.

Politician need to fix it... because the same happen in Belgium, Germany, ...

Re: So few

[Anonymous Coward]

When you are not paying taxes, it is an obvious tax fraud.

Full stop.

Re:So few

[the grace of R'hllor]

For much of the 20th century, the United States has had >70% tax on the wealthiest as well, with at some point >90%. Apparently, that did not seems to hurt the US.

Not that various American ultra-rich folks are calling for higher taxes on the wealthy too. Instead, they get tax breaks.

A few rich people being a bit upset that their income from labor gets taxed heavily, which they don't feel because the vast bulk of their income comes from investment, won't hurt them. It's the desire to spend spend spend that really gets Hollande. Actual socialists do more harm than good.

Re:So few

[manu0601]

Do we need references to claim that austerity never works? Do we have examples where it was a success?

My understanding of the phenomenon is that common people understand it as a wise measure they adopt when they have budget problems: less expenses, more income. But that thinking miss the point that a state is not an individual, and has several special capabilities which can help here: creating money, increasing income, and refusing to pay the debt without seeing its belongings seized.

But what about the politicians that enforce austerity and the media that support it? They are economically educated, they know what they are doing/supporting will only make their People poorer.

Re:So few

[davester666]

Actually, it really appears that Google was blatantly NOT following the law.

Apple sells an iPhone and says X% of the value of it is for patents to be paid to an Irish company [or something like that], which is completely legal, even if it is also completely arbitrary [as Apple owns said patents] so they basically shift most profits out of the country. Everybody and their dog does this, Apple just headlines this because they are a relatively new company [vs say, petroleum companies] and they make highest amount of profit [or thereabouts] worldwide.

Google has a large office of employee's in France, that were involved with negotiating and signing advertising contracts with french companies, then claiming those contracts were actually signed IN IRELAND. This is the part that the tax collectors are taking issue with. To be legal and not have to pay taxes in France for those contracts, Google would basically have to close their french offices and get everyone to directly deal with their Irish division.

And I believe I saw a similar story about the UK also investigating Google doing this in the UK as well. And I'm sure all the other tax collection agencies in the EU have perked up their ears and started taking a look at this...

Re:So few

[dbIII]

The difference is that in Australia a gift of an expensive bottle of wine to the right person will make the tax problems go away.

Re:So few

[AlphaWolf_HK]

What do personal tax rates have to do with a corporation paying corporate taxes? There are no "75%" corporate taxes in France?

Technically true, and my point wasn't to say that corporations pay a 75% tax, rather my aim was to point out the biggest absurdity in their tax system in order to emphasize how bad it is. It is quite so bad that in fact that they are reversing course, which again I wanted to emphasize. As far as the 75% tax itself...the 75% figure cannot be taxed to individuals directly; I don't know exactly why, but apparently it's against their higher laws (constitution? I honestly don't know enough about French law.) What I do know is that it comes in the form of a payroll tax. The original law was written so that it was a regular personal income tax, but it was shot down in their court system, so it had to be rewritten to its current form, and the tax is paid before they even receive the money, or something to that effect.

Re:So few

[Anonymous Coward]

A) The "75%" is the highest bracket and don't even touch the wealthiest unless they are stupid.

B) The "75%" is not on corporation

C) If google had lied, they must pay and stop doing business in France if they don't want to pay the taxes.

Do no evil, my ass. Illegal tax evasion is evil.

Re:So few

[Fuzzums]

"The government redrafted a proposed bill to levy a temporary 75% tax on earnings over 1 million Euros."
-- on earnings over 1 million Euros --

Personally I don't see the problem to contribute more to society if you earn that much money.

Re:So few

[AmiMoJo]

TFA says that the French government thinks they are not following the laws. It's a somewhat technical disagreement but as far as the French government is concerned the should have paid that money.

As it happens the EU is trying to sort this out. The proposal is for companies to pay corporation tax based on the percentage of business they do in each country. If 5% of Google's business is in France with French companies then they pay French corporation tax on 5% of their global profits. Doesn't matter where they try to hide them, the bill is the same.

Of course some countries, most notably the UK, are against this because they like being tax havens.

Re:So few

[Carewolf]

The US had a top marginal tax of 90% during it richest times of the last century. Why does it bother you so?

Re:So few

[IamTheRealMike]

Google has a large office of employee's in France, that were involved with negotiating and signing advertising contracts with french companies, then claiming those contracts were actually signed IN IRELAND. This is the part that the tax collectors are taking issue with.

There are so many problems with this, where to begin?

Firstly, this is not some spontaneous action by a bunch of bottom rung tax collectors. Politicians in France got elected by promising things the country could not afford and have been desperately searching for things they can tax to raise revenue, or at least be seen to be doing something. Hence 75% tax on the rich, and so on. Wealthy non-French tech companies are of course a juicy target so top politicians in France have been threatening Google with retroactive tax "re-evaluations" for some time. This is 100% a politically motivated action, what's more, it directly contradicts EU law which France signed up for. It's not at all clear that the EU courts would let such an action stand.

But secondly, and more problematically, you are trying to argue that a contract is not signed with the people it's signed with. There's a very simple way to find out who a contract was actually made with - look at who signed it. If these contracts were signed by an Irish company, they're with a company in Ireland and it doesn't matter what language they're written in (seriously, who comes up with this crap, does the French government expect to tax transactions in Canada now?).

Countries that have a beef with salespeople promoting products that are actually sold elsewhere, will either have to get real, or start cracking down on any kind of affiliate network or company that has a mobile salesforce at all. Attempting to redefine where revenue accrues according the job titles of people who worked on the sale is a losing proposition and can never work - either companies will rename the people who are doing the selling to avoid ad-hoc rules, or they'll just increase the independence of the subsidiaries so they qualify as independent affiliates etc, or if governments get really draconian they'll go to entirely online selling - not exactly a hard thing for a company like Google. There's no way to make this kind of thing stick, which is why EU law does not work that way.

To be legal and not have to pay taxes in France for those contracts, Google would basically have to close their french offices and get everyone to directly deal with their Irish division

No, what they're doing is entirely legal, though whether they choose to fight this in the courts is an open question. But does France really want Google to shut up shop and leave? The entire point of the EU that France is so enthusiastic about is the common single market, which means anyone in it can sell to anyone from anywhere inside it. If France starts trying to undermine that system they're signing up for a whole world of pain far beyond any tax they could gain from Google.

Re:So few

[Tom]

the wealthiest has resulted in a lot of them just flat out leaving that country.

Which is why tax laws need a lot more international corporations.

Right now, the rich and the mega-corporations are turning countries into enemies that fight each other over "competitive" tax rates, when they should be allies fighting the tax evaders with criminal prosecutions.

It's just another trick to make you and me pay indirect subsidies to the rich. Even if you're anti-government, you can't deny a simple truth: Every $ that some rich dude or corporations evades in tax payment has to be paid by the rest of us instead.

Re:So few

[ls671]

I agree, ask France to send me a billion please.

Re:So few

[AlterEager]

In some countries, maybe there's some blame to be had for escaping taxes...but France is a whole other argument. I mean shit, 75% tax on the wealthiest has resulted in a lot of them just flat out leaving that country.

The top French income tax rate (on income over EUR 151,200) us 45%.

Re:So few

[manu0601]

No problem, just buy 1/50 of french public debt and you will have your billion every year.

Re:So few

[gtall]

Everett Dirksen, is that you?

Re:So few

[Anonymous Coward]

The US had a top marginal tax of 90% during it richest times of the last century. Why does it bother you so?

You might not be American, so let me explain this guy to you. There is a certain current of Americans who hate France and all things related to French culture (I know, it's ironic, but stick with me...). Usually they tend to be tea party or hard core conservative types. They can't really explain *why* they hate France and when you ask them to explain they cite reason that are bizarre and illogical. Common reasons seem to be "they are snobs", "they hate Americans", "they are socialist", "they have no military"... or other crazy, illogical reasons. It's really bizarre. The best way to respond to them is to just give them a furrowed eye brow look, shake your head, and ignore them.

I know to non-Americans it might sound like I am trolling, but francophobia in the USA is 100% legit:
http://en.wikipedia.org/wiki/Anti-French_sentiment_in_the_United_States

Re: So few

[Anonymous Coward]

Hey dipshit when you are not paying taxes you are not legally required to pay it's not tax fraud.

Full stop.

Read a book.

Re:So few

[cheesybagel]

You think France cares if Google operates there? Its not like it is the only search engine or e-mail service around you know.

As for tax evasion of rich people there is a longstanding tradition of changing residence to Monaco to avoid paying income tax in France.

Re:So few

[cheesybagel]

His right-winged predecessor did a lot of spending on infrastructure and military forces while he was in power. Honestly I don't see where you are trying to go with this.

Re: So few

[O('_')O_Bush]

In the short term(a couple of years like what the E.U. has been going through so far)? Probably not.

Over decades? Absolutely.

Gross and unsustainable overspending over the long term is a fantastic way to either default on debt, end up having to hyperinflate it away, or dramatically bleed the country's wealth out of said country. Those are not good things.

Re: So few

[johnsnails]

Can u elaborate on why Bazza was f'ed up by that bottle. I'm interested if there is more to it I'm unaware of. Merci beaucoup.

Re:So few

[Anonymous Coward]

Sorry wrong...

That same thing happens in the US all the time. A refinancing of a house in Maryland doen't take place in Maryland... The contracts are sent to a company in Virgina... but they don't sign either, ... The company in Virginia sends the contracts to a company in Delaware for signing...

Because Virginia has lower corporate taxes for processing (nothing is sold, or contracted), and Delaware has the lowest taxes for charges on signed contracts.

Re:So few

[Anonymous Coward]

Until the ICAC get involved, then heads will roll as they dig into things. Just have a look at what happened to the NSW premier when he accepted some wine as a gift in exchange for favours...

Re: So few

[dnaumov]

This is not how the world works in the 21st century anymore. Of course, Google does have offices in France, but don't assume they coudn't just close them. The internet is a funny thing, it doesn't give a crap about arbitrary geographic borders. I provided you with content: my reply to your post, do I now "operate" in your country?

Re:So few

[Coeurderoy]

You forgot Microsoft who are real artists in this sport

Re:So few

[Coeurderoy]

You confuse taxes on individuals and taxes on companies, BTW the US top tax rate was very close to this until you elected a movie cowboy, I guess all the rich people where fleeing the US in the 60s 70s and early 80s ....

The main reason BTW the government is trying to increase personal taxes is just because international (including very french ones) companies actually manage not to pay any taxes...

Re:So few

[Coeurderoy]

In reality there are two issues

the first one is that the large US companies know that at some point they'll be able to get a tax holliday to rapatriate the cash they fleeced from foreign countries and stored in some tax haven.
In theory you have to pay taxes somewhere overly simplifying the issues it means you pay where you are or where your customers are, but if you can hide the money from your customers tax authorities and then wait until your own tax authorities tells you fine, bring the cash we'll make you a discount ... it's "kind of legal" but ...
The other issue is that in constructing the European Union we agreed to have an open market but did not (out ouf misguided nationalism) give up national taxing rights...
So a small country is happy to tax a large company for all the business they do in Europe at a discounted rate, and they can afford it because they have smaller needs for their infrastructure.
But it is not a long term sustainable system.

In the specific case of Google the tax office is doing what they should have done a very long time ago to Microsoft, Apple, HP, ....
it is to say: ok the system is broken and you "can" steal the revenu from your french operation to move it to some place where the tax are lower, BUT you have to do it correctly and charge a realistic amount of money for what ever "management services, IP transfert, branding cost, sales operation, ... " you have "abroad"
if not you are cheating ...

Re:So few

[Anonymous Coward]

Anyone that has ever run a business (or even played a business video game, like Simcity or Business Tycoon) knows that austerity cannot work. You spend money to produce value which then earns you money. Of course if you don't have money or a line of credit, and you need to spend money, you lose. If you cut back your spending, you're also cutting back your future revenue, meaning you'll have to cut back your spending some more, until eventually you're no longer in business.

It's really bad news when a country is no longer in business.

Of course there's plenty of reasons to cut spending that aren't austerity, like closing a loss-making factory, but more usually, you have to spend more first to gain the efficiency you need to cut back undesirable spending.

To give a Simcity example: you have to spend a bunch of money to buy a water pump, so you can close ten water towers (which produce the same water as 1 water pump, but cost 5x as much to operate).

To give a real-world example: an SMT machine costs around $200k, and around $200 to operate, but it can produce a lot more boards per hour than 50 people placing components by hand. You need to have the demand for a large amount of boards before you can produce enough revenue to pay for the SMT running costs and interest charge. [There are now some desktop SMT machines that cost around $6-30k with consequently worse efficiency and lower running costs]

To give a government example: you have to solve starvation, homelessness, joblessness and crime before you can cut back your welfare spending and downsize your police departments. If you try to put the cart before the horse and fire your police department during a crimewave, the cost of the escalating crime is going to far outweigh the saving from payroll cuts.

The problem is both growth and decline are hysteretic; the more crime you have, the more you have to spend on policing to get it under control; the more educated and healthy your populace are, the more wealth they will produce, and it will cost less to educate them and keep them healthy; the more industrialised and automated your business gets, the less you have to spend on wages and inputs, and the higher your margins can be. [working against this, your margin is determined the efficiency of your competitors]

Re:So few

[Anonymous Brave Guy]

TFA says that the French government thinks they are not following the laws.

But which part of the French government? The implication is very different depending on whether we're talking about the legislative authorities, the tax collection authorities, or someone's PR department.

Of course some countries, most notably the UK, are against this because they like being tax havens.

I think you're confusing the UK with Ireland. Large international businesses are playing much the same games to avoid paying corporation tax in the UK as they are in France.

Re:So few

[Anonymous Coward]

I know to non-Americans it might sound like I am trolling, but francophobia in the USA is 100% legit:
http://en.wikipedia.org/wiki/Anti-French_sentiment_in_the_United_States

You really want to know why Americans hate so much the French ? By the way it's the same reason the French hate so much the Americans. Because deep deep down where the sun doesn't shine, France and the US of A are the 2 sides of the same coin. Much more so than the US and the UK. Ironic isn't ?

Re: So few

[manu0601]

Sure current situation is not good, but you have to look at its source.

Between 1945 and 1973, France's state deficit is covered by debt owned by nationals, and money creation by the Banque de France. The debt remain low despite an important public spending.

After 1973, money must be borrowed on international markets. The debt increases since that time, and no public spending reduction managed to fix that. And ironically, the whole debt today is roughly the sum of debt interests since 1973.

Re: So few

[dbIII]

There's a bit of corruption being uncovered in the ruling party in Australia this week. Turns out you can get a lot of access during a tendering process for a gift valued at $3000. It's a bargain since getting a Mayor to listen cost $5000.

Re:So few

[davester666]

Then everything being sold in the EU now magically happens in Ireland. Even though the store is in France, the customer is in France, the salesperson is employed in France and the product is France, they just declare the transaction happens in Ireland. And the same in Germany and the UK and Spain.

And it's not just France, the UK is also looking at this exact same issue with Google. And it wouldn't surprise me if the rest of the EU was also looking at it.

It sounds like Google will basically have to do what Tesla is doing in various states. Tesla has a showroom, with a car or two, and some people to explain things about the car, but when they actually want to buy the car, the people go "Here, you need to go to this web site, and buy it through the web site."

Re:So few

[davester666]

There is a difference between state boundaries and international boundaries, and completely different laws apply.

In this case, there would be various international treaties France has signed and enacted between France and Ireland [and then enacted by their national gov't], France, Ireland and the EU [and then enacted by their national gov't], and French law.

Re:So few

[boule75]

> As for tax evasion of rich people there is a longstanding tradition of changing residence to Monaco to avoid paying income tax in France.

Except it does not work for French citizens : aggreements between Monaco and France were signed to explicitely forbid it...

Re:So few

[davester666]

This isn't a "mobile work force". Google isn't sending people from Ireland to get contracts in France. That would probably be legal.

Google has hired a bunch of people in France, using their subsidiary in France, who are signing contracts with French companies, but claiming that they are actually being signed in Ireland. I believe the legal issue is that there is no nexus for the transaction happening in Ireland.

Re:So few

[Anonymous Coward]

> You can't deny a simple truth: Every $ that some rich dude or corporations evades in tax payment has to be paid by the rest of us instead.

Or, you know, we could just not spend it, and let people keep what they earn.

Re:So few

[AlphaWolf_HK]

Sorry, but that 90% figure is sensationalist and just another way to say "look, we're getting screwed by the 1% more than we used to! Torches and pitchforks now!" and ultimately isn't useful. Why? Because practically nobody ever paid 90%, and furthermore the rich paid less of a burden then than they do today. Why? The tax system worked a lot differently then. It was the top marginal rate on an income above $300,000 for single, $400,000 for married. In order to effectively be paying 90%, they had to make over $2 million per year. Keep in mind that that kind of money was practically unheard of during that time.

Even if you adjust for inflation, you'll find less people making that amount then than there are today, mainly because all economies were much smaller, there was less money to be made, and overall there was much less wealth that even existed to begin with (and yes, the amount of "wealth" does increase as economies grow, which means there's more to go around.)

Bottom line: Today the rich DO pay a higher portion of taxes than they did then, even when adjusted for inflation. I'll let an investment broker do the explaining here:

In 1958, approximately two million filers (4.4% of all taxpayers) earned the $12,000 or more for married couples needed to face marginal rates as high as 30%. These Americans paid about 35% of all income taxes. And now? In 2010, 3.9 million taxpayers (2.75% of all taxpayers) were subjected to rates that were 33% or higher. These Americans—many of whom would hardly call themselves wealthy—reported an adjusted gross income of $209,000 or higher, and they paid 49.7% of all income taxes.

In contrast, the share of taxes paid by the bottom two-thirds of taxpayers has fallen dramatically over the same period. In 1958, these Americans accounted for 41.3% of adjusted gross income and paid 29% of all federal taxes. By 2010, their share of adjusted gross income had fallen to 22.5%. But their share of taxes paid fell far more dramatically—to 6.7%. The 77% decline represents the single biggest difference in the way the tax burden is shared in this country since the late 1950s.

http://online.wsj.com/news/art...

So you see, even though the top marginal rate was higher back then, the rich paid LESS taxes than they do today. So stop with this Michael Moore bullshit (sorry, just that 90% figure gets thrown around so often, but it doesn't mean what the typical person thinks it would mean; as is typical in Michael Moore fashion.)

Have a nice day.

Re:So few

[AlphaWolf_HK]

There is a certain current of Americans who hate France and all things related to French culture (I know, it's ironic, but stick with me...). Usually they tend to be tea party or hard core conservative types.

I'm none of the above. My thoughts about France are probably the same as the typical British person's are (if you're looking for a comparison, anyways.)

I'm also fairly certain that the French hate Americans more than I hate the French.

Re:So few

[AmiMoJo]

No, the UK likes being a tax haven as well. Here it is a little more complicated than Ireland. You have to take the head of HMRC to dinner and come to a gentlemen's agreement that you aren't going to pay, and little is done to enforce it. The government is generally speaking against clamping down hard to legal-but-immoral tax avoidance because it thinks companies will move outside the UK if it does.

Re: So few

[Anonymous Coward]

Hey dipshit when you are not paying taxes you are not legally required to pay it's not tax fraud.

Full stop.

Read a book.

First, If you earn money in one country and then lie about where the money was earned, you are committing tax fraud.

Secondly, the question of whether the taxes are legally required are determined by the government where the money is earned.
All the theorizing you may find in some book matters not one whit. It's the governments game; they make up the rules.

Re:So few

[pepty]

If 5% of Google's business is in France with French companies then they pay French corporation tax on 5% of their global profits. Doesn't matter where they try to hide them, the bill is the same.

Wouldn't they just organize so that profits all accrue to a company that doesn't do business in France, thus giving Google 0 global profits? Isn't that what most global companies already do w/r/t to the US and the EU?

Re:So few

[pepty]

You really want to know why Americans hate so much the French ? By the way it's the same reason the French hate so much the Americans. Because deep deep down where the sun doesn't shine, France and the US of A are the 2 sides of the same coin.

Because both countries have folks professing to hate the other country's culture while spending $$$ on the products of that country's culture?

Re:So few

[pete6677]

Google should just get the hell out of France.I can't imagine its profitable to put up with the French government bullshit. Besides, French citizens could still use Google services. No way would the French government be able to figure out how to block them.

Re:So few

[Tom]

Right, because who needs firefighters, hospitals, schools, streets, garbage collection, sewers and all the other pointless things that government handles that just happen to cost money.

Re:So few

[manu0601]

What do personal tax rates have to do with a corporation paying corporate taxes? There are no "75%" corporate taxes in France?

No, there is not. Do not believe anything François Hollande says.

Re: So few

[johnsnails]

interesting. Will listen to AJ's n RH's commentary on it.

Re:So few

[painandgreed]

You really want to know why Americans hate so much the French ? By the way it's the same reason the French hate so much the Americans. Because deep deep down where the sun doesn't shine, France and the US of A are the 2 sides of the same coin. Much more so than the US and the UK. Ironic isn't ?

From what I could figure out in trying to track down the "French are surrender monkeys" trope, hatred of the French pretty much all goes back to post WW2 DeGaulle government. France pulls out of NATO. States that the USSR is going to win the cold war. Generally insults England at every chance by saying that all their achievments were given to them by the US. Annexes Algeria and calls it France while others are trying to end the colonial era. Starts nuclear testing while even the US and USSR and agreeing to limit it. This was all pretty much done because France wanted to still be considered a superpower and was willing to piss people off to try and prove it. Pretty much what Russia is doing now.

Since it's France we're talking about...

[Anonymous Coward]

...they should offer Google some cheese with the upcoming whine.

$1B? That's nothing!

[Anonymous Coward]

Ever heard of the Double Irish and a Dutch sandwich?
The City of London has established a world-spanning network of tax heaven states, mostly consisting of former parts of the english empire. Big corporations use this system to not pay taxes, and the sums involved exceed 1$B by far.

Re:$1B? That's nothing!

[Anonymous Coward]

"Double Irish and a Dutch sandwich"

Errr goddamn my filthy mind, too much urban dictionary.

Re:$1B? That's nothing!

[Em Adespoton]

"Double Irish and a Dutch sandwich"

Errr goddamn my filthy mind, too much urban dictionary.

I thought we were talking about a coffee with a double shot of whiskey and a sandwich where I only had to pay for half....

Re:$1B? That's nothing!

[flyingfsck]

It will only take one EU country to bring that house of cards down. Three cheers to France for starting with it.

Re:$1B? That's nothing!

[AmiMoJo]

Damnit, now I'm hungry.

Re:$1B? That's nothing!

[Anonymous Coward]

Mmmmmm, sandwich !

Re:$1B? That's nothing!

[CrimsonAvenger]

It will only take one EU country to bring that house of cards down. Three cheers to France for starting with it.

This is assuming that France is correct, and not just shaking down a rich company for some extra cash.

I've got no real opinion, since I'm not a tax accountant (and I doubt anyone else who chimes in today will be one either)...

Re:$1B? That's nothing!

[Anonymous Coward]

This is assuming that France is correct, and not just shaking down a rich company for some extra cash.

Are you suggesting that France is arbitrarily claiming that Google owes $1 billion? The claim is that Google has not paid its taxes. Property only exists by virtue of the law which exists thanks to taxation, so you either pay your few percent, or you have no civilisation and pay 100% to whomever has the biggest guns.

I've got no real opinion, since I'm not a tax accountant (and I doubt anyone else who chimes in today will be one either)...

I am an accountant, though this is more a political matter.

Re:$1B? That's nothing!

[Anonymous Coward]

Can you name a single multinational company that have not tried to avoid tax in all countries it does business?

Re:$1B? That's nothing!

[mrchaotica]

Property only exists by virtue of the law which exists thanks to taxation

Property exists by virtue of a person claiming and controlling it by fighting off those who would take it away. All the law does is make it so the owner doesn't have to physically defend it all the time.

Re:$1B? That's nothing!

[mpe]

This is assuming that France is correct, and not just shaking down a rich company for some extra cash.

Just about all large transnational companies have complex schemes to avoid paying taxes. It's quite possible that a small mistake would leave them with a huge tax liability.

we're more advanced than hymenless monkeys?

[Anonymous Coward]

despite they still do not shoot each other & they do still share their bananas... no more typos please the coin of the realm is kaput

Same as UK

[alexkaskasoli]

Google seems to be consistently dodging taxes. Shouldn't people go to jail for this?

Re:Same as UK

[Anonymous Coward]

Nope. No one goes to jail when the pile of money on the table is this large.
You have to be pretty small-time to get prison unless you've stolen from our real rulers, i.e. Bernie Madoff's mistake.

Re:Same as UK

[arbiter1]

Apple does it to, but lately EU struggling so much lately they are going after anyone they can for money, few years ago it was Microsoft cause IE in windows, now its google.

Re:Same as UK

[Anonymous Coward]

I agree. Politicians that made up these taxation laws should be going to jail for this. Furthermore, it is inexcusable that the status-quo remains.

Re:Same as UK

[Anonymous Coward]

"people" like you and me? For sure. But there's "people", then there's people. You know, real people with money, not some poor law-abiding schmuck with a job.

Re:Same as UK

[Anonymous Coward]

Shouldn't people go to jail for this?

The trick is to steal enough to buy the judge. $1 billion is more than enough. And never, ever, steal from someone with more money than you.

Re:Same as UK

[Anonymous Coward]

Well the super rich didn't get rich by paying taxes.

Re:Same as UK

[Anonymous Coward]

There is nothing shady about the penalties dealt by the EU. The whole penalty process always has to follow established EU law, and thus it's the same for everyone.

If you want to look at some shady stuff, take a look at Indian officials slamming Western corporations with huge billion scale taxes retroactively.

Re:Same as UK

[tlambert]

Google seems to be consistently dodging taxes. Shouldn't people go to jail for this?

If you set up rules by which something is legal, and someone jumps through the necessary hoops to follow those rules in order to pay the minimum possible taxes, the only thing you really have a right to complain about is the rules you've set up, not that people follow them in an optimal fashion.

France is (effectively) paying Google $266.5M to execute their contracts in Ireland rather than France, due to the 33.3% corporate tax in France, vs. the 12.5% corporate tax in Ireland.

If France wants to tariff EU transactions, they need to drop out of the EU; if they want the $162.5M from Google that's going to Ireland instead of France, then they need to drop their corporate tax rate by 20.8% to match Irelands ...or drop out of the EU.

If it weren't for the loading (multiple incorporations, intellectual property assets capable of being licensed for large feed, lawyer costs, professional board member costs in the NL, etc.), pretty much no one would actually do business in France directly, as a legal venue.

Re:Same as UK

[sumdumass]

The problem of putting companies or people in jail is that often the tax dodging is more or less legal. Do you know what the real definition of a loop hole is, someone you didn't intend using a provision law in a way you didn't intend it to be used. But what you intended isn't the law so a lot if not all of the tax dodging is within the law- hence the problem with jailing someone.

Now sometimes you can get judges to read into something and cause the loophole to be closed by judicial decree (more or less), but that is often seen as an after the fact law and typically wouldn't be criminally prosecuted (no jail time)- even if back taxes and penalties could be taken.

Re:Same as UK

[Anonymous Coward]

Is that all you Fandroid faggots got? "The appllezz does it 2!!!!!!" (BTW: your grammar fucking sucks)
 
I thought you bitches claimed that Google was better than Apple. It seems like that's not the case any longer.

Re:Same as UK

[rtb61]

Keeping money is tax havens makes paying bribes in tax havens with secret bank accounts real easy. Politicians collect the bribes by going on luxury holidays and spending up big on 'souvenirs' which they bring back with them to pay for corrupt legislation, in corrupted democracies all over the globe. Many corrupted democracies conspire together to keep tax havens alive, rather than actually doing anything about it. The top dog in corruption is of course the US, which then uses it's economic and military power to push that high level corruption upon the bulk of the globe.

Re:Same as UK

[amaurea]

Commenting to undu mistaken moderation.

Re: Same as UK

[Anonymous Coward]

Blah blah blah blah. The problem is they aren't executing the contracts in Ireland but only *saying* that they were. Learn to read dumbass. Google was straight up lying which is definitely against their "Don't be evil." corporate policy.

Re:Same as UK

[Splab]

Yeah, because one billion dollars will save the economy... FYI The EU generates a GDP of US$16.566 trillion, but hey, lets not let silly things like facts get in the way of being a jerk?

The reason for "going after" google is because they are evading taxes and need to play on the same field as the rest of us.

Re:Same as UK

[Anonymous Coward]

I guess the next ones in the dock are going to be Microsft, Apple, IBM, Exxon, Shell Oil (though maybe not - I believe the US Shell Oil is actually owned by Royal Dutch Shell...)

Re:Same as UK

[Anonymous Coward]

If you read at least the headline you would see that France is asserting that Google has not in fact followed the rules.

They should get in touch with Ikea's lawyers

[Anonymous Coward]

You know, the guys that set up IKEA as a Dutch registered "charity" to funnel profits tax-free??

Look it up!

I heard that before

[Anonymous Coward]

We have a good figure to start with: the share of GDP that goes to capital or labor. It moved a lot from the later to the former. Should we go back to 1980 values in France, workers (who cannot escape taxes as megacorporations can) would globally get a 195 billion euros bonus each year.

I am a Greek and this is the kind of rhetoric i continuously heard in the past from most of our dear leaders - and knowing that this is a rhetoric that our good French partners like to hear i wonder how the rest of the PortugalItalyGreeceSpain can use that France...
The "capital" usually -if not under threat- becomes "labor" (and vice versa) - and to "share" the GDP you need to have it first!

Same tricks played in UK

[whoever57]

Google has played the same tricks in the UK. Google claims that the sales are made in Ireland, while employing many people in the UK whose job titles includes sales. I expect there are Google employees in France and UK (and most other European countries) who get sales commissions for sales "made" in the Ireland.

Re:Same tricks played in UK

[clarkkent09]

Why shouldn't they use "tricks" to avoid evil behavior by various governments. Google owes France $1 billion!? Really? For what? For creating jobs in France and for benefiting French people through its free products for which the French government has not contributed 1 cent?

Re:Same tricks played in UK

[mlts]

In cases like this, I wonder about just moving to a VAT entirely and dispensing with income taxes.

In a perfect world where companies paid what they earned, an income tax would be better in theory, as consumption taxes tend to slow down purchasing and movement of money.

However, in the real world, we read all the time about the stashing of income. A VAT is better because it is a lot harder to get around (as of now... I'm sure there might be loopholes.)

tl;dr... Income can be hidden. Hiding that factory, Lear Jet, or Maybach, not so much.

Re:Same tricks played in UK

[Anonymous Coward]

Google employees benefit from the roads, drinking water and municipal/government services that allowed them to set up shop in France as opposed to, say, the Antarctic. Go there if you think you need the freeeeeduuuumb.

Re:Same tricks played in UK

[jemmyw]

The problem with sales tax (VAT) is that it taxes the poor more than the rich because the poor tend to spend a greater proportion of their income. It is also quite a burden to administer for companies and government. It is also an inefficient tax for states with welfare - government gives you money and then you give a large portion of it back again.

I don't have a solution though, even though it is something I think about often. But it seems to me that what we really need is for some way to experiment with widely different tax regimes. But what country is going to be willing to suffer negative consequences of doing so?

Re:Same tricks played in UK

[Killall -9 Bash]

Why shouldn't they use "tricks" to avoid evil behavior by various governments. Google owes France $1 billion!? Really? For what? For creating jobs in France and for benefiting French people through its free products for which the French government has not contributed 1 cent?

You could make the same argument about any tax levied by any government anywhere.

Re:Same tricks played in UK

[Anonymous Coward]

In cases like this, I wonder about just moving to a VAT entirely and dispensing with income taxes.

In a perfect world where companies paid what they earned, an income tax would be better in theory, as consumption taxes tend to slow down purchasing and movement of money.

However, in the real world, we read all the time about the stashing of income. A VAT is better because it is a lot harder to get around (as of now... I'm sure there might be loopholes.)

tl;dr... Income can be hidden. Hiding that factory, Lear Jet, or Maybach, not so much.

VAT, or sales taxes don't work on a level playing field. If you make a low wage the vast majority of your money is spent on housing, then on the repeat purchasesables. Food, household items like garbage bags, dishsoap, clothes, and possibly fuel.

Most of your spending is taxed, a decently high rate. When you make 10-15k a year 15 precent or so sales tax hurts. A lot.

On the other hand, if you make 10 or 20 times that much you don't spend 10 or 20 times as much on the same things. You'd spend a little more. Higher quality goods do cost more, but unless you are doing hilarious things with your wealth like buying solid gold Lambo's chances are you aren't spending anything close to a similar ratio. Even a good house (mansions are a whole nother thing) doesn't cost that much more than renting an apartment.

The richer you are the less a sales tax hurts, when that's the opposite of the way you want to distribute a tax burden.

The examples of factories, lear jets, that kind of thing. Rich people don't own their own toy's if they are smart. That Lear Jet? Its a Company Jet, which means it'd actually a tax deduction as a business expense. That's right the private jet let him pay less, not more taxes.

If we're going to get really sneaky, we can double down on Company's. Lets incorporate a Transportation Company that exists solely to own this Lear Jet, its only income is renting the Jet to our theoretical rich man. To offset this income it has the operating costs of the jet, gas, maintenance, fuel, the pilots salary and a lawayer/accountant to run the whole mess.

Except this Company doesn't own the jet either. Much like a bank loans you money so you can buy a house, a third company exists solely to loan the money to the second company to buy a jet with. And since we control both companies, we'll make some silly terms, like a 100 year repayment plan, with interest payments tailored to the setup so that the Transportation company will stay in the tax bracket we desire. In fact, lets make sure the Transportation company slowly loses money over time, so they qualify for all those tax incentives the government sets up to help small businesses, and since the transportation company doesn't own anything, if there is ever an accident or something there are no assets to sue for. All it owns is a big fat debt on the Jet which Company number three can repossess if necessary.

Now we put each of these companies in whatever country has the most favorable laws for each circumstance.

This is the problem with tax laws. Not that Google (or any, hell, lets be honest, EVERY, multi-national corporation) owes money, its that the tax laws are so messed up that the above scenario is possible, legal, and if I had to guess, probably simplistic.

I love beating on mega-corps as much as anybody, but I'd put money that Google has been following the letter of the law in France. They have teams of very highly paid lawyers to make sure of it after all. France is just pissed somebody figured out how to game their system.

Re:Same tricks played in UK

[KingOfBLASH]

Bollocks. VAT will hit rich harder than the poor. The benefit of a VAT tax is you tax consumption not income. So when a rich guy goes out and buys a 747 and outfits it as a super luxury "sky yacht" he's paying tax on it. Compare this to the current tax situation where a rich guy may not pay proportional taxes on his luxury good. (Buffett famously made the observation that he pays less tax on his luxury Malibu vacation home then most middle income people pay on their family homes)

Of course you don't want the poor, so you help them with the sales tax by making necessity items like milk and diapers tax free. You can additionally provide help like food stamps, or other subsidies. Or, another option is a "tiering" structure for the VAT. Buy a basic car like a 4 cylinder Honda? No tax. Buy a mid level car with a 6 cylinder engine, leather seats, and a sun roof? Tax. Buy a super luxury car like a ferrari? A lot of tax.

In that way you are capturing tax only on the wealthy (or people who are spending on "luxury").

Re:Same tricks played in UK

[Anonymous Coward]

VAT is payed by the consumer, ie. the base of the society pyramid. It would just make the rich people richer and the poor poorer. Stupid idea. Also an increase in VAT slows down economies by far, as the increase in good prices would just lead to slower consumption. Increasing VAT at the expense of income tax would not give lower income people more money to spend. The opposite. Really bad idea.

Re:Same tricks played in UK

[Anonymous Coward]

Could?

Re:Same tricks played in UK

[Anonymous Coward]

Why shouldn't they use "tricks" to avoid evil behavior by various governments. Google owes France $1 billion!? Really? For what? For creating jobs in France and for benefiting French people through its free products for which the French government has not contributed 1 cent?

So why should any corporation pay taxes then? They create jobs after all and it's not like they benefit from any infrastructure in the country, such as police, firefighting, road networks... All paid for by the French government.

And free products? When did Google start to offer Google ads for free to French companies? That's their source of revenue. It's clear that you're obtuse but I can't imagine that you think Google magically gets revenue from Internet users that pay them nothing.

Re:Same tricks played in UK

[mrspoonsi]

Except the rich would put the 747 through their business and pay 0% VAT

Re:Same tricks played in UK

[drinkypoo]

I don't have a solution though, even though it is something I think about often.

What about only taxing corporate income and all (personal and corporate) capital gains until wages reach a fairly significant amount?

Re: Same tricks played in UK

[Anonymous Coward]

No, it doesn't work that way. If a company buys a 747 then they pay the VAT. If they upgrade it and resell it, the full VAT is passed along to the buyer. In the end, whomever ends up with the goods (the consumer), ends up paying 100% of the VAT tax.

Yes, I wish the US would institute a VAT immediately, including a VAT tax on all imports just like every other nation on the planet is taxing US made goods.

Re:Same tricks played in UK

[Anonymous Coward]

Very true, a VAT is regressive. However, income taxes are just as regressive if one can use various companies as described above and keep income offshore so it never gets taxed.

So, it is a choice of the lesser evil... one tax that would be somewhat progressive, but doesn't get paid due to loopholes and stashing cash offshore versus a sales tax that is regressive, but can be applied more evenly so just the proles are not stuck paying it.

Re:Same tricks played in UK

[jemmyw]

No, it will hit the poor harder. It doesn't matter the amount of money, it matters the proportion. If a less well off person spends 100% of their earnings on rent, food, water, etc. then they'll be taxed the full amount, and for the basics they have no choice. A very well off person won't be spending 100% of their income even if they buy that luxury yacht, and they don't even need that yacht so they could choose not to make the purchase and invest instead.

Re:Same tricks played in UK

[Anonymous Coward]

As long as you are in a regime with a dual VAT and income tax system, you can account for the disproportionate impact of VAT on low income filers by either an income tested credit or just increasing the standard deduction.

Oddly enough, this solution has been floated in the USA (during the recent healthcare debate) as part of a proposed funding solution for a new healthcare regime (Ezekiel Emanuel and, I think, Bob Herzog were the architects of that plan which was obviously not implemented).

Re:Same tricks played in UK

[whoever57]

(Buffett famously made the observation that he pays less tax on his luxury Malibu vacation home then most middle income people pay on their family homes

That is because of Proposition 13, which was a sledgehammer device used to crack a nut (people on fixed incomes seeing their property taxes skyrocket as property valuations skyrocketed). It doesn't have much relevance outside California.

Re: Same tricks played in UK

[whoever57]

No, it doesn't work that way. If a company buys a 747 then they pay the VAT. If they upgrade it and resell it, the full VAT is passed along to the buyer. In the end, whomever ends up with the goods (the consumer), ends up paying 100% of the VAT tax.

You have no clue how VAT works.

Re:Same tricks played in UK

[Anonymous Coward]

Maybe he doesn't mean income tax, or VAT but corporation tax.

Just flat rate everything, like 3%. No complex systems needed, no tax accountants needed, if it went through your corporation in the country you do business you pay tax on it. Allow double by this method (since the rate is so low), surely it should cost more to import goods and products than it does to attempt to make them in the same country as the consumer by buying the relativelt cheaper bill of materials.

Re:Same tricks played in UK

[chuckugly]

Provide a poverty level (or whatever) FairTax style prebate.

Re:Same tricks played in UK

[jemmyw]

Another complexity to administrate.

Re:Same tricks played in UK

[chuckugly]

A relative few poverty level families applying for a prebate as opposed to collecting revenue from EVERY earner and business. I fail to see an issue, particularly when all sales could just be taxed the same.

Re: Same tricks played in UK

[Compaqt]

He is right. The business would pay VAT on a 747. Why do you say it wouldn't?

Re: Same tricks played in UK

[KingOfBLASH]

Actually it depends on how you institute the VAT.

It is true if you institute the ability for companies to be exempt from VAT, you defeat the purpose of the VAT.

However, in Europe companies typically get charged VAT as well as consumers...

Hard to follow what going on

[tomhath]

According to the DGF investigation, the company only sends Google Ireland contracts, but they are written in French with French clauses, and therefore considered French contracts.

So why don't they write the contracts in English? They'd be easier to read that way.

Re:Hard to follow what going on

[RJFerret]

According to the DGF investigation, the company only sends Google Ireland contracts, but they are written in French with French clauses, and therefore considered French contracts.

They should stop reading them via translate.google.com.

Re:Hard to follow what going on

[Anonymous Coward]

Easier for us maybe...

But I believe it is the law that contracts with French companies/citizens must be in the local language ... which happens to be French.

How they get away with it (for now)

[Anonymous Brave Guy]

Giving the benefit of the doubt, and assuming this a genuine question and not a troll...

The problem is that it is surprisingly difficult to objectively distinguish between legitimate activities in an international business that operates in under multiple tax regimes and the activities which are "obviously" just tax avoidance.

It's hardly a secret that some businesses set up a legal entity that is little more than an administrative formality in a country with a very low corporation tax rate, and then their legal entities in other countries with higher corporation taxes pay some sort of fees/royalties to their low tax counterpart, thus shifting the tax burden and saving them money (as well as changing which country is the beneficiary of the corporation tax they do pay).

The trouble is that the same rules about international payments and taxes have to cover businesses that really do operate, for example, a crucial R&D lab in one country (perhaps with a good reason, such as having close ties to a good university nearby) but still sell the end product to customers internationally. More than that, you also have to allow for the fact that it might be two completely separate legal entities doing that, which may or may not be owned by some of the same interests. After all, if a business in one country spends a lot of time and money hiring smart people to design products, but then sells the IP rights to completely independent manufacturing businesses in other countries that make and sell the physical products, I don't think many people would argue that it's silly to have the money for the rights shifting across international borders back to the people who did the research, and for each individual company involved to pay the appropriate tax in their own country on the money they make in that country.

So where do you draw the line, and on what basis? After all, the businesses in question almost certainly do still pay substantial amounts of money to the countries where they really are selling things, such as sales, property and employment taxes. The "obvious" thing to do is to adjust the tax rates so corporation tax is universally low and more government revenue comes from these other forms of taxation that can't be so readily shifted, but that has a lot of knock-on effects for your entire national tax system, and it's also susceptible to various other kinds of manipulation unless there is a lot of international co-ordination to mitigate those dangers. And remember, the people who are making all this money typically have a lot more to spend on professional tax advice -- and get excellent returns on that investment -- than the governments in question have to spend on challenging them in extended tax-related lawsuits that will drag on for years at great cost to all concerned.

I think there is sufficient public opinion turning against the more egregious examples of corporate tax avoidance now that we really will see such international co-ordination starting to get results within the next few years. France is definitely not the only place concerned about this, at either government or guy-in-the-street level. But for now, the above is (a grossly simplified explanation of) how they get away with it, and why it's neither breaking any laws nor easy to make laws it would break without unintended and potentially very nasty side effects.

Re:How they get away with it (for now)

[Anonymous Coward]

Giving the benefit of the doubt, and assuming this a genuine question and not a troll...

The problem is that it is surprisingly difficult to objectively distinguish between legitimate activities in an international business that operates in under multiple tax regimes and the activities which are "obviously" just tax avoidance.

Really?? What is so hard? An American company setting up in Ireland/Singapore etc to sell goods to third country X. It isn't hard to distinguish at all, it is hard to make good laws that prevent it but it is god damn easy to identify companies intentionally abusing these havens. There are also a range of different laws/duties that countries could impose to prevent this or at least make it non cost effective for companies.

Re:How they get away with it (for now)

[ShakaUVM]

>why it's neither breaking any laws nor easy to make laws it would break without unintended and potentially very nasty side effects.

It's very easy to fix, actually. You just have to do away with the notion of taxing profits. There's still side effects, of course.

As Hollywood has taught us, there are a million and one ways to shift money around to avoid having profits, even when a reasonable individual would say a company is profitable.

So you just tax 10% of revenue, and call it a day.

The side effect is, of course, that companies that really are breaking even right now would go under (if they can't get a loan), and with our ludicrously high corporate tax rate it incentivizes corporations to spend money. It's like you get to buy everything at a 40% discount, after all.

But a revenue tax would stop all manners of shady profit shifting and hiding.

Re:How they get away with it (for now)

[IamTheRealMike]

Really?? What is so hard? An American company setting up in Ireland/Singapore etc to sell goods to third country X. It isn't hard to distinguish at all

What makes you think Google is an American company?

Yes, it was founded there. But more than half its employees and more than half its revenues are outside the USA. Looking purely at the numbers as they are today, Google is not an American company.

So what country does "own" Google then? Ireland? No. Most of Google's operations are not in Ireland. France? Certainly not.

Now we see the crux of the problem. Google is in fact a truly trans-national company. It is not obviously located in any one place. It has offices, employees and customers everywhere, and its products are all online where there are no borders.

How do you decide which countries get the biggest slice of the cake? There is no rational way to do it which is why people who design tax systems like the EU designed it to create a deliberate race to the bottom.

Re:How they get away with it (for now)

[WoOS]

But a revenue tax would stop all manners of shady profit shifting and hiding.

There is already a tax on revenue. It is called VAT and has its own tax evasion problems.

Doing a revenue tax in any other way than as a value added tax will immediatly give you massive vertical integration in the industry as companies not producing their own intermediate goods indirectly have to pay "revenue" tax on them with no way of deducing it from their own revenue tax. Thus you end up with more "too big to fail" companies.

Re:How they get away with it (for now)

[gbjbaanb]

No, Google is an Irish company. If you look at which of the many companies that comprises Google worldwide, it is Google Ireland that does the majority of business with all the other countries in fact, this individual country's operation actually does all the selling of product in all the other countries too - that's why the tax bill is so low.
See, if in France, a French salesman sells an advertising campaign to a French company, it is the Irish company that does it - otherwise the sale would (obviously) count as a French sale by French people to Frenchmen, and thus then be liable for all those taxes. But if the Irish company did the selling (nudge, nudge, honest) then the tax bill is massively reduced, especially as the licensing for this sale is managed by a different Irish company (only this one is registered in Bermuda.... hence the term "double Irish" - it requires 2 Irish companies, one registered elsewhere. These are Google Ireland Ltd and Google Ireland Holdings. One does all the sales, the other does all the licencing of IP to the other. Between them, I could happily say they do all of Google's business). A simple explanation

That's the problem - not some 'grey area' where you have to draw lines over which company does business in which country, or some amorphous global company doing business everywhere. Google is an Irish company that just happens to have a "subsidiary" in California where the CEO lives.

So Google Ireland acts as a conduit - in 2009 it turned over nearly â8bn, yet profits were only â45m.

Maybe the US system of allowing related companies be treated individually for tax purposes should be scrapped. Then Google Ireland, Google Bermuda, and Google would be considered together for taxation by the US taxman...and the US would start to receive tax that is currently held outside US borders.

Re:How they get away with it (for now)

[Anonymous Brave Guy]

What you're describing is exactly the "obvious" solution I mentioned: shift the tax burden from corporation tax (tax on profits) to alternatives such sales tax (tax on revenues).

I think eventually this will be the logical conclusion to the problem of international tax shifting, but it's not something you can just change overnight. Sales taxes are messy already, with their own set of complicated rules to figure out the place where a sale is deemed to have taken place.

Re:How they get away with it (for now)

[Anonymous Coward]

Tax _avoidance_ is a " legitimate activities in an international business". It's tax _evasion_ that's illegal.

France has been painfully desperate for revenue lately. We're going to have to wait for more information before we can find out if this is legitimate or if the Socialist-led government is just grasping for cash.

Re:How they get away with it (for now)

[petermgreen]

So you just tax 10% of revenue, and call it a day.

If you tax revenue then you would disadvantage small buisnesses who do one stage of the production process and give a big advantage to large companies with the resources to vertically integrate so the revenue tax is only paid once.

You would also put your companies at a massive disadvantage against foreign companies operating in areas without a revenue tax.

Re:How they get away with it (for now)

[volmtech]

WTO agreements not withstanding, tariffs.

SWAT team google!

[erroneus]

That seems to be the response these days by governments trying to collect money.

Like they care

[Anonymous Coward]

What, is France gonna send in its army? LMFAO!

Re:Like they care

[Anonymous Coward]

What, is France gonna send in its army? LMFAO!

That joke is getting stale.

http://www.globalfirepower.com...

Re:Like they care

[Anonymous Coward]

No it isn't. The joke of French being cowards will continue until they redeem themselves. No, bombing New Zealand and encouraging genocide of anglophones in Rwanada doesn't count.

France should liberate the French speakers trapped in Quebec under the oppression of the uncultured anglophones. Take over the province and then we can retire the French surrender jokes.

Re:Like they care

[Anonymous Coward]

No it isn't. The joke of French being cowards will continue until they redeem themselves. No, bombing New Zealand and encouraging genocide of anglophones in Rwanada doesn't count.

Americans are a bunch of redneck biblethumpers warmongering ignorants. While there is hope for the French to redeem themselves, there is no hope at all to have enlightened Americans.
And for the record, you shitty hillbillies would still be subjects of the crown had the French not helped you some 200 years ago go against the legitimate authority. But what can we expect from a country born out of terrorism ?

 

France should liberate the French speakers trapped in Quebec under the oppression of the uncultured anglophones. Take over the province and then we can retire the French surrender jokes.

French Canadians can liberate themselves, they don't need French help.

Re:Like they care

[AlterEager]

encouraging genocide of anglophones in Rwanada

Aaaand, the prize for the weirdest summary of the Rwandan genocide goes to the AC over there.

Anglophones? Seriously?

Re:Like they care

[Anonymous Coward]

I'm not American you presumptuous idiot.

Obligatory

[Anonymous Coward]

"Le Google." What do they call a Whopper?

I don't know. I didn't go in a Burger King.

Re:Obligatory

[gmhowell]

"Le Google." What do they call Bing?

I don't know. I didn't use Microsoft.

FTFY.

Re:Obligatory

[madbrain]

Burger King went out of business in France a long time ago.

Looks like they are trying again, with a total of 2 (two) restaurants nationwide.

Re:Obligatory

[Anonymous Coward]

Another 1 line 4 letter no substance fart of a reply from gmhowell.

Nothing special here.

[Noishkel]

I don't know why this is so surprising. If one place becomes too expensive to operate out of then a corporate will move to someplace that won't try to fleece if for every dime it can get. Or in this case use the law to keep from getting screwed by the frogs.

Re:Nothing special here.

[Rockoon]

There is a large group of people here that think that its not just moral, but a complete obligation, for governments to maximize their revenue. These same people are of course against corporations doing that very same thing.

Logical fallacies all the way down the statist trail.

Re:Nothing special here.

[dbIII]

That's a very "special" excuse for why it's perfectly fine to avoid tax, not put money in the collection plate etc. That "large group of people" is not allowed to get in charge for very long by a wide variety of mechanisms in any state. The equivalent of the United Fruit Company calls in their friends as soon as such a situation is threatened.

Re:Nothing special here.

[Rockoon]

That's a very "special" excuse for why it's perfectly fine to avoid tax, not put money in the collection plate etc.

See, its commies (and I mean that) like you that are the real problem. You admit right here that you think there needs to be an excuse to pay as little tax as legally possible. Not only doesnt there need to be an excuse... its a no-brainer as to why there doesnt need to be one. Yet there you are with this theory that there must exist an excuse.

Dont let reality knock your logical fallacies down on the way out.

Re:Nothing special here.

[dbIII]

Wrong, sociopaths are the real problem. Look it up and see if it fits you for not wanting to help others out.

Re:Nothing special here.

[Rockoon]

Yep, typical commie that thinks the only way to help others out is by giving government money and power.

You are a pure totalitarian statist - also known as a commie.

Re:Nothing special here.

[dbIII]

You must be lots of fun at parties. Do you do balloon animals as well?

If you legislate tax law

[fred911]

And a company follows the letter of that law, and due to the
way the law was written, a company creates wealth for their shareholders against the INTENT of your law, they did not break the law! Write the law as you intent to enforce. Don't cry foul when you fail to write proper law, or fail to amend your law.

  And I'm sorry for this (not really).

  Fuck the French anyway..

Re:If you legislate tax law

[Anonymous Coward]

And the French say Fuck You, you're just stupid anyway :)

Re:If you legislate tax law

[Anonymous Coward]

The French are nearly bankrupt. Wonder why.

Re:If you legislate tax law

[Anonymous Coward]

Nope. Most countries, including the US, the UK and probably France have what's called an "anti-avoidance" clause which says basically:

If you thought you had found a clever loophole, you are now wrong. If you think you've got a LEGAL way to avoid taxes, you must register the description with us (not doing so is a crime), we'll read how your scheme works and if we don't like it we'll go to court.

In the UK the result is hilarious. Tax avoidance lawyers work out new schemes every year. They sell these schemes for a fee to greedy people. They register the scheme with the tax officials. The tax officials go "Hahahaha, no, that's clearly evasion" and everybody who uses the scheme gets told to pay their real taxes. If they don't, they go to court and lose. The lawyers clean up - selling these useless schemes is legal, because in theory one day one of them might be OK.

"Working wheels" was a famous UK scheme because celebrities were involved. The law said if you're a "car dealer" who sells and buys cars you get a tax rebate on the losses you incur on your car business. So, each celebrity who paid to get into the scheme was assigned a bunch of cars more or less at random and some poor office worker filled out paperwork "buying" and "selling" cars over and over to create a paper loss. A lawyer checked the paperwork was OK, signed it off, and an accountant did the paperwork to claim a large rebate. Guess what? The revenue took everybody who used the scheme to court. The court wanted to know if these celebrities knew anything about cars. Of course they didn't, they'd never seen these damn cars, some of them had even asked their lawyers to promise they wouldn't need to know anything about cars. OK, so why did they get involved in this bizarre business? Well because it was a tax avoidance scheme of course! Ooops, wrong answer. Bzzzt. Everybody pays full taxes, now go away.

Re:If you legislate tax law

[russotto]

Nope. Most countries, including the US, the UK and probably France have what's called an "anti-avoidance" clause which says basically:

The US does not have an anti-avoidance clause in the sense you mean. The US has a rule which says that you cannot arrange your affairs on paper as to avoid taxes, while the reality is different.

Re:If you legislate tax law

[AlterEager]

The French are nearly bankrupt. Wonder why.

Seriously? You think the 5th largest economy in the world, with a debt/gdp ratio of 94% (cf EU average 93% USA, 101%, Japan 223%,) is "nearly bankrupt"?

Alternative Minimum Tax

[flyingfsck]

The USA also has something called Alternative Minimum Tax. That is a rule that gets invoked when it looks like someone is trying to game the system. Essentially, it gives the tax service the power to impose a tax. France is doing the same thing.

Re:Alternative Minimum Tax

[Anonymous Coward]

> That is a rule that gets invoked when it looks like someone is trying to game the system

It's a rule that gets invoked more each year due to inflation. I'll bet that the majority of senior IT workers are hit by AMT.

Re: Alternative Minimum Tax

[Anonymous Coward]

You don't have any understanding of what is going on here shitbird. Read something before posting. Google is following the law - if France doesn't like it they can change their laws plain and simple. You can't set the speed limit then pull someone over for following it.

Re: Alternative Minimum Tax

[Anonymous Coward]

Tax authorities are made of people. Different people interpret law differently. These kids of issues sometimes arise simply because an organization didn't negotiate with the authorities of their interpretation before the tax decision became legally bounding. The bigger the organization, the more likely such oversight will occur. Google can challenge the decision in various courts, after the fact. Proactive approach is a way to avoid such issues in the future in many countries.

Re:Alternative Minimum Tax

[alexander_686]

errrr. The only reason why there is an alternative minimum tax is that the tax code is complex and is designed to be gammed - instead of a AMT we would be better off if we just simplified the tax code.

Re:Alternative Minimum Tax

[killhour]

That will never happen. Since congress has the sole authority to set taxes, they realized way back that they can get a ton of leverage by negotiating for new tax rules. You want to push a new law through? Tax rule to grease the palms. McDonalds overcharged you for a Big Mac? Tax rule. Your best friend works in the Petroleum industry? Tax rule. It's 2PM on a Tuesday? Tax rule. Hell, the taxes are so complicated, entire industries have grown around figuring them out - and they're actively lobbying to prevent the simplification of tax rules, since that would be bad for business.

Re: Alternative Minimum Tax

[pepty]

You don't have any understanding of what is going on here shitbird. Read something before posting. Google is following the law

Some countries (I don't know if France is one) have tax laws stating that if transactions are structured in a particular manner for no reason other than to avoid taxation, the tax avoidance scheme is void. Problem is, laws like those are extremely difficult to enforce effectively and consistently.

Cake

[Anonymous Coward]

Let them eat cake...

who cares?

[samantha]

Screw the French and their stupid tax system. I would rather see the money use usefully by Google.

"Move to Antarctica"

[tlambert]

Google employees benefit from the roads, drinking water and municipal/government services that allowed them to set up shop in France as opposed to, say, the Antarctic. Go there if you think you need the freeeeeduuuumb.

Actually, a lot of us would, only there are international agreements to prevent people colonizing there, and pretty much creating new nations anywhere. When it looks like it's about to happen somewhere, it gets stopped. E.g. the Minerva Reefs were underwater atolls that was landfilled by a libertarian group seeking to become a new nation state in 1972, at which point the U.S. Government paid Tonga to send the Tongan navy to go plant a Tongan flag on them. They were basically their own country for a grand total of 26 days. It was claimed on the basis of territorial fishing outside the internationally recognized 2 mile coastal limit. Right now they are completely unoccupied, but the Tongan Navy shows up any time someone tries to occupy the area (good enough to keep other people from living there, not good enough to live there themselves), as it did again in 1982. Ironically, Fiji, one of the countries that rubber-stamped the Tongan claim initially at the behest of the U.S. is now trying to dispute the territorial waters claims, since they now want fishing rights to the area as well.

As far as paying for things: the Google employees enjoying French services are socked with a 66% payroll tax (do you really think the employer pays this tax? This is income that you would get that the employer gives the government instead), and on the remaining 34% which is their take home pay, they pay up to a 45% personal income tax (the top rate is at 70,830 Euros, which is just under US$100,000, which is an easy amount to get as a Google employee after just a couple of years out of college, assuming you don't suck).

So they are getting about US$111,000 per Google employee ... and they want more.

Re:"Move to Antarctica"

[Anonymous Coward]

Which shows how much you know nothing about French taxes.
66% payroll tax is bullshit, although there is indeed quite a lot of "social contribution" on wages that would more likely amount to about 33% (we have actual social security here, it does not come for free). Then the 45% personal income tax rate (which is the highest tax bracket) would only apply to the part of your income that exceeds 150k€. The 70k€ bracket's rate is 41% and the brackets most people encounter are the lower ones which are 0%, 5.5%,14% and 30%.
You are taxed on income after deducing 10% of the actual figure as "job-related expenses" and further reducing it according to the number of children you've got to feed. And keep in mind that 70k€ is a very high salary in France, even for a Google employee. Top management sure earns more, but even a good engineer won't likely reach that level, ever. Mostly because of the social system enabled by the high "payroll tax", we don't need to save so much money in case we get sick or we want to send children to college...

Already something to cover that

[dbIII]

Google can try to register as a charity like all the others providing services and see how far it gets.

75% tax on rich does not exist

[aepervius]

I have no idea where you are getting that idea. http://en.wikipedia.org/wiki/T... there is a 60% tax on inheritance but only if you are a remote relative. There are high income tax on very high income (41% top), and there is a very low tax on wealth (around a 1% if you are millionaire , and atround 2% if youa re over 10* millionaire). As for the article it does not speak at all about a 75% tax. As for the article, it was really written by an american "France is famous for its generous social benefits, somewhat relaxed work ethic" there are country (like germany, Sweden) which have as generous and as relaxed "work ethic". In fact I suspect the usage of the word "ethic" here as being american prejudice only.

Re:75% tax on rich does not exist

[AlterEager]

"France is famous for its generous social benefits, somewhat relaxed work ethic"

That relaxed work ethic that gives France one of the highest GDP/hour worked in the world.

Re:75% tax on rich does not exist

[steelfood]

In puritanical America, not being in the office for 10 hours a day, not taking less than one week of vacation (including sick days), not taking less than fifteen minutes to buy and eat lunch, is having a relaxed work ethic.

Re:75% tax on rich does not exist

[Anonymous Coward]

That relaxed work ethic that gives France one of the highest GDP/hour worked in the world.

For that one hour, yes. But then they take the rest of the year off.

Fuck France?

[Anonymous Coward]

Fuck France!
Just leave these cowardly idiots alone without access to Google services.
They would soon regret their attacks and stupid leftist laws.

Re:Fuck France?

[AlterEager]

Fuck France!
Just leave these cowardly idiots alone without access to Google services.
They would soon regret their attacks and stupid leftist laws.

You seme to have a shaky idea of how all this "making money" thing works.

Hint: you don't refuse to do business in a country that is the 5th largest economy in the world just because you think they are "cowards".

(And, by the way, it's pretty odd to describe people you think are attacking you as "cowards").

Tom = multiple /. sockpuppet using scum

[Anonymous Coward]

Let's let TOM speak shall we:

"I'm having great conversations on this site with one of my alias accounts" - by Tom (822) on Monday April 07, 2014 @02:29PM (#46686259) Homepage

FROM -> http://slashdot.org/comments.p...

APK

P.S.=> Tom *tried* to libel me & failed after I destroyed him in a technical debate on hosts files... result?

Tom ended up "eating his words" here http://slashdot.org/comments.p... spiced with "the bitter taste of SELF-defeat" + HIS FOOT IN HIS MOUTH

... apk

Re:Tom = multiple /. sockpuppet using scum

[Anonymous Coward]

APK your code is so awsome it makes me cry I worshipp One Hosts File for the Forgiveness of Sins. Tom cowers in yur shadow, the ignorant feeb! APK is famous haters gonna hate put your technical so hard up in my hot grits. Hosts file is the only true computer safe keep all you are educated stupid. Evil Adblock DNS lusers try to stop the Message<b> but we all knwo the truth APK is the truth is and only he knows everything has better code and published so many times I love every.

all /. wants it to lie about APK and HOSTS.
ITS NOT SLOWRE OR WORSE!! HOSTS IS BHE BEST U DONT GET VIRUS!!
Lie #1
Adblock cant block wildcard domains or tlds only hosts can
#2
hosts is not slowerr! hosts is the first thing check it check Oliver Day says and testimonials never wrong than DNS checking server
#3
it protects against IPs changing maliciously
#3
it oes not result in extra http requests to 0.0.0.0
#5
APK hosts program is BETTER than a DNS caching server because malwarebytes
#^
hosts can block swf and img and still serve the rest
#7
one hosts file works on all computers in the network
#8
only the computer owner can add hosts entries and it can be done remotely and you always know if malware had addd entrys
#9
it works best if you have a million line hosts and you ahv to disable dns caching but its better
#10
hosts is NOT SLOWER OR WORSE!!

Tom is just an evil /. luser do-nothing edicated stupid. GO GO APK!!!

Double Standards and Slashdot

[Anonymous Coward]

$ ./double_standard "Apple"
Apple reduces taxes by taking advantage of completely legal provisions in tax laws? The entire company should be thrown in jail or forced into slave labor in Siberian mining camps!

$ ./double_standard "Microsoft"
Microsoft reduces taxes by taking advantage of completely legal provisions in tax laws? The entire company should be thrown in jail or forced into slave labor in Siberian mining camps!

$ ./double_standard "Google"
Google is deliberately flouting the law and avoiding taxes? I'm sure it's just money-grabbing corrupt policies by politicians trying to squeeze money out of Google. Google should pack up shop and refuse to do business there, and let those losers have only Bing, and NO GOOGLE GLASS! That'll show them! Fuck those guys!

Tom = multiple /. sockpuppet using scum

[Anonymous Coward]

Let's let TOM speak shall we:

"I'm having great conversations on this site with one of my alias accounts" - by Tom (822) on Monday April 07, 2014 @02:29PM (#46686259) Homepage

FROM -> http://slashdot.org/comments.p...

APK

P.S.=> Tom *tried* to libel me & failed after I destroyed him in a technical debate on hosts files... result?

Tom ended up "eating his words" here http://slashdot.org/comments.p... spiced with "the bitter taste of SELF-defeat" + HIS FOOT IN HIS MOUTH

... apk

The observation that...

[Old Fatty Baldman]

...successful companies dodge their taxes is on par with the observation that successful squirrels dodge cars. A company that stands in place and pays out whatever money their local government demands is lacking in some fundamental qualities that make a business successful. If they're dumb enough to fire their accountant and hand over billions of dollars, because patriotism, they're probably not making good business decisions in a ton of other areas as well.

Why Limit the Conversation to Google?

[Anonymous Coward]

Google is not the only company doing this. So are Apple, Microsoft, and practially every global corporation. Why? Because the primary responsibility of every corporation is to increase value for its shareholders.

By the way, every wonder how Steve Jobs got by on only $1 per year? Corporate executives are paid in stock. As long as the stock is not sold, capital gains are not realized, and none of it is subject to tax. The executive then takes loans out against the stock with banks to have some spending money. After the passing of the executive, the family members inherit the stock, and don't have to pay taxes on the gains while the executive owned it.

By the way, the executives give themselves special classes of stocks that are guaranteed not to fall in price for a fixed period of time. These are not available to us pee-ons. Don't like it? Good luck lobbying against the corporate overlords.

Tom = multiple /. sockpuppet using scum

[Anonymous Coward]

Let's let TOM speak shall we:

"I'm having great conversations on this site with one of my alias accounts" - by Tom (822) on Monday April 07, 2014 @02:29PM (#46686259) Homepage

FROM -> http://slashdot.org/comments.p...

APK

P.S.=> Tom *tried* to libel me & failed after I destroyed him in a technical debate on hosts files... result?

Tom ended up "eating his words" here http://slashdot.org/comments.p... spiced with "the bitter taste of SELF-defeat" + HIS FOOT IN HIS MOUTH

... apk

Not free

[Anonymous Coward]

Show me a way to turn off all adds and tracking in Googles product and then I will think they are actually free. I pay for each google service by looking at their adds.

Coersion

[Anonymous Coward]

The problem is that the taxes are not voluntary. Those that wish to contribute 75% may do so, but those that with to contribute less or none at all are forced to do so anyway.

There is also the question of the ethics of contributing money to a group that you know uses the threat of violence to achieve it's ends.

Nations

[Anonymous Coward]

When it looks like it's about to happen somewhere, it gets stopped. E.g. the Minerva Reefs were underwater atolls that was landfilled by a libertarian group seeking to become a new nation state in 1972, at which point the U.S. Government paid Tonga to send the Tongan navy to go plant a Tongan flag on them.

That's a huge fail on part of those libertarians. Maybe the education they received from the government was poor. If something, history tells us you don't get your own country buy just going and claiming one. You need to have the balls to actually fight for it. Sealand founder shot at the UK navy with a cannon, and got left alone. Gaining territory by fighting isn't even enough to really be recognized as a nation. It's kinda hard to operate if you aren't self sufficient, and can't travel anywhere else because nobody will recognize your passport. If you have access to sea it's somewhat easier, but if you are trapped inside some other nations those neighbours are very important to you. If they are the same neighbours you shot at to get them go away with their tax claims good luck making friends again. Maybe sell them something?