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Google, Apple and Microsoft Squirm As Global Tax Schemes Scrutinized
An anonymous reader writes: Google, Apple and Microsoft chiefs were hauled in front of an Australian Senate Committee on Wednesday and forced to answer questions about their tax dodging structures. "Under questioning from Greens Senator Christine Milne, [Google's Maile Carnegie] revealed none of the revenue derived from Google's lucrative advertising business is taxed in Australia, rather it is booked in Singapore where the corporate tax rate is set at 17 per cent, as opposed to Australia's 30 per cent. ... However in the strongest defense yet of the company's complex tax structure, Ms Carnegie attempted to highlight the hypocrisy of criticising global technology companies for using the same approach that Australian mining firms, like Rio Tinto, use when deriving profits from China. 'These are international tax arrangements and what Google is doing in Australia is very very similar to what Australian companies are doing outside of Australia. I am not sitting here today trying to defend whether those practices are right or wrong, they are simply the way the global tax system is currently working and we are trying to operate within that.' Ms. Carnegie said it was up to the government to create a different system, which the company would then abide by."
Governments all over the world have been hoodwinked or bribed to set up loopholes which are beneficial to corporations, and not so good for domestic economies.
Because people have been buying into the lie that somehow cutting taxes on corporations is a net benefit, when in fact it's just a way for corporations to pay less tax and skim off the time, while taking ever bigger profits.
There has been a lot of evidence that all of these tax cuts don't benefit anybody but corporations, and that trick down economics is pretty much not working as advertised.
It's time to start saying "too fucking bad" to the corporations and stop giving them special loopholes to play shell games with money.
Start handcuffing CEOs to bears, make the world a better place.
Lost at C:>. Found at C.
This is what happens when you have two sets of rules to follow - the "law", which is laid out in black and white as to what is allowed and what is not allowed, and is backed by the courts and amended by acts of government. And then there is the "spirit of the law", which is fluffy, ethereal and changes depending on who you talk to, when you talk to them and what their agenda is.
As Ms. Carnegie points out, if you want stuff taxed in your jurisdiction, change the law so that happens - dont wave the "spirit" of the law around as if it has any meaning other than a method of blackmail.
No, the fact that it's legal makes it OK. If governments don't like that, they can change the law.
Though why anyone thinks the world will be a better place if governments have yet more billions of dollars to waste is beyond me.
Oh, you think that if big corporations pay their 'fair share', the government will cut your taxes, right? Ha-ha-ha-ha.
If countries want tax revenue to stay in their countries, lower the tax rates to be come more competitive. After all, 17% of something is much better than 30% of nothing.
30% tax rate?? I've spotted the real crime.
Mis-reporting income and expenses is fraud last time I looked. This goes for businesses where one division over-charges another to shift profits from one country to another. These practices are coming under increasing scrutiny globally.
Want to straighten the ad problem out fast? Sales tax in the country/state/county of purchase.
"Transparent" is a shit show that trades on every stereotype going. A man in drag is NOT a transsexual.
Unfortunately, I would agree.
If a country wants a piece of the action, maybe they should take a good hard look at their tax code. They may have to lower taxes *gasp* Perhaps getting 17% of something is better than getting 30% of $0.
The reason companies do this is because it's more profitable to hire an army of lawyers and accountants to skirt local laws.
No, they were not hauled or forced. Did they come and answer questions reluctantly? Sure, but can we drop the hyperbole?
Just another day in Paradise
Where do you see anything on them misreporting, or charges of fraud?
Just another day in Paradise
In itself, that's just a race to the bottom on corporation tax. Then you find rich people earn nothing and simply channel all their funds through companies... oh wait.
jh
You try refusing to appear in front of Congressional, Senate or Parliamentary Committee once they have required your attendance. Those invitations are akin to subpoenas, so yes they were forced to appear and answer questions.
Ms. Carnegie said it was up to the government to create a different system, which the company would then abide by."
In other words: "if you lower your taxes to a number that we like, we might consider paying them".
Must be nice being a multinational corporation, getting to chose how much taxes you pay and where you pay them...
Meanwhile in the real world, people go broke (no more jobs... sorry), small and medium-sized businesses go broke (can't compete with Amazon? Too bad), local governments and states go broke (not enough revenue? Your taxes are too high, just lower them so you can compete with the 0% rate in Dubai and the United Arab Emirates).
The system works.
In the United States, your assertion that "working stiffs" are burdened with most of the taxes is not supported by the facts. If you look at total taxes paid (local, state, and Federal) as a percentage of income, the bottom 40% are taxed at about 20% and the top 20% are taxed at about 30% (Washington Post). So the rich are paying taxes at a higher rate then the "working stiffs."
If you look at it from the "income to the Federal government" perspective, as of tax year 2011, the top 5% paid 57% of the collected income tax and the bottom 50% paid 12% of the collected income tax.
Based on those two facts, I assert that the "working stiffs" are not taxed at a higher rate then the rich. Also, at the Federal level, the rich pay far more in taxes. Where the "working stiffs" lose out (and the Washington Post article shows this) is at the local and state level.
Why should a mom-and-pop internet business be exempt from taxes that the mom-and-pop brick-and-mortar store has to pay?
Because the mom-and-pop brick-and-mortar store only has one set of three tax structures which they are beholden to (federal, state, city). The mom-and-pop Internet business would have literal thousands of tax codes to be subject to (that is, the tax laws of every nation, province/state, county, city, federation, etc. on the planet - at least outside of North Korea). That is not, as you declare, a "level playing field" by any means.
Large brick-and-mortar international concerns and large internet international concerns are already level with each other tax-wise aside from sales taxes (which vary by locale).
Quo usque tandem abutere, Nimbus, patientia nostra?
There's a reason I feel zero guilt in using ad-block. It's perfectly legal for Google to dodge taxes this way, and it's perfectly legal for me to dodge Google's ads using browser extensions.
You shouldn't feel guilt about thwarting Google displaying the ads.
You should maybe feel a teensy bit of guilt over the fact that you are using an ad-supported site which derives its revenue from displaying Google ads to its visitors, in lieu of a subscription fee.
Google could probably care less; in fact, in cafeteria discussions at Google, this came up once, and the general consensus was that, if the ads were not going to result in sales, Google preferred that people run the ad blockers.
Of course, this reduces the revenue for the ad-supported site which you liked well enough to visit, but not well enough to pay for. So I suspect, at some point, that the ad-block-detection code (which is there) will give you a temporary redirect to another page that says:
"If you don't like seeing advertisements, fine, we'll save that in your preferences and quit trying to show them to you; but in lieu of having ads, would you please support the continued operation of our site with a small donation, so that we can continue to provide you with the content you came here to see?"
So, actually, if anything, it's a "Poor Site I Like Who Is Now Getting Any Income..." situation.
Just saying.
When you cheat you tax collectors a few thousand then you end up in court. When a large corporation is minimising tax then it is much more of a negotiation. You are insignificant. Google employs lots of people and generates lots of revenue and can hire the best legal advice and accountants.
That's also the reason bankers and corporate use news media like the Daily Mail or Fox News to get you worked up over J.Q Public down the street cheating on his taxes or scrounging a few $ / £ / € in benefits because it distracts your attention from their corporate and banker friends who are cheating the public purse out of billions upon billions. It is a constant source of puzzlement to me how people can get so worked out about Polish/Romanian/Bulgarian workers coming to the UK and cheating on benefits (when in actual fact studies have shown that they work more and cheat less on benefits than native Britons) that I have actually heard people talk about wholesale deportations (and some ideas that are way scarier than that), but they do not seem to be bothered at all by bankers and corporations (read: the owners of organizations like the Daily Mail and Fox News et. al.) swindling the state out of amounts of money that make benefits swindling look like a mosquito on an elephant's ass.