Spanish Authorities Raid Google Offices Over Tax (reuters.com)

An anonymous reader shares a Reuters report:Spanish officials raided Google's Madrid offices on Thursday in a probe related to its payment of taxes, a person familiar with the matter said, barely a month after the internet company had its headquarters in France searched on suspicion of tax evasion. A spokeswoman for Google said in a brief statement the company complied with fiscal legislation in Spain just as it did in all countries where it operated. The company was working with authorities to answer all questions, the spokeswoman added. Google is under pressure across Europe from politicians and the public upset at how multinationals exploit their presence around the world to minimize their tax bills.

Comments

Just fix it

[Anonymous Coward]

Just change national tax codes to tax a sale base on the location of the person or entity buying it. Simple and done. With this approach, the location of the seller is irrelevant.

Re:Just fix it

[fustakrakich]

The seller doesn't want to do the paperwork of collecting the tax. I hardly sympathize. It's the cost of doing business. They can hire another accountant.

Re:Just fix it

[Big Hairy Ian]

And then no one but the big corporations would be able to afford to sell things over the internet.

Re:Just fix it

[bluefoxlucid]

Sales taxes are only capable of collecting taxes from the purchaser on purchases. Money that doesn't get spent doesn't get taxed, and sales tax increases affect the poorest the most.

The impacts of a sales tax are tantamount to increasing prices of goods through any other mechanism: the consumer is capable of purchasing fewer goods (thus poorer), and not as many goods are produced, thus jobs are reduced.

Sales taxes can't be progressive, so can't respond to an increase in income spread. For example: in the United States, our flat-tax rate would be a 30% income tax. With the top bracket paying 1/3 higher, the highest bracket would be 40%. If that's the upper 10%, then the lower 90% of income earners would pay a combined total of 20%; the concept recurses (the upper middle class may pay 25% while the lower middle class pay 15%; the top portion of them may pay 20% while the lower earners pay 10%; etc.). As the income gap spreads, that top tax bracket represents a bigger proportion of money, and so the lower tax brackets can shrink without raising taxes on anyone else, thus improving the buying power of the broad consumer market (either by increasing the take-home pay, reducing wage growth so prices grow more slowly relative to income, or a combination of both) and creating more jobs.

Re:Just fix it

[Anonymous Coward]

It's not that simple. It's not sales tax (or VAT as we call it over here) that these companies are avoiding, it's corporation tax. Sales tax is a percentage of the sale price, so it is 100% clear and hard to dodge. Corporation tax however is levied on profits, so companies use various tricks to reduce the apparent profits in the country where the sale takes place, and shift the profits to a country with lower corp tax. For example, Starbucks retail arms buy their beans from a Starbucks subsidiary in Luxembourg or wherever, that charges a high price for the beans, so the retail arms in European countries don't make much profit on the coffee, while the bean-selling subsidiary in the low tax country makes a fortune. Amazon et al do similar stuff with subsidiaries selling the goods and services out of low tax countries to retail subsidiaries elsewhere. There's of course many other tricks on the financial side, swapping loans around and whatnot.

It's legal, and there's no simple way of stopping it. Really there needs to be harmonization of corporate taxes, so that there's no advantage to such profit shifting. Otherwise you're into trying to do some very complex calculations and legal dancing to figure out how much profits the company could have made without profit shifting, and how you're going to tax a company for profits legally made by a separate corporate entity in another country, and so on. Very messy.

Re:Just fix it

[Anonymous Coward]

It's almost that way already. Very few small shops can survive without sites like Amazon or eBay. Also, if you're too successful on Amazon and your product can be replicated, Amazon will do it themselves and then boot you out.

Re:Just fix it

[godrik]

sales tax increases affect the poorest the most.

The purpose of sales tax can be different in different places. In France, sales tax is about a quarter of the country's budget. This seems odd in France who wants to tax the rich more than the poor.

But what you need to remember is that France is a highly touristic country. A significant fraction of the sales tax comes from tourists. It is hard to get good numbers on that, but a few percent of the sales tax collection is from tourists.

With companies that are offshoring their profits, sales tax maybe the only opportunity the government has on taxing that section of the market.

Re:Just fix it

[bluefoxlucid]

But what you need to remember is that France is a highly touristic country. A significant fraction of the sales tax comes from tourists. It is hard to get good numbers on that, but a few percent of the sales tax collection is from tourists.

With companies that are offshoring their profits, sales tax maybe the only opportunity the government has on taxing that section of the market.

So with over 90% of their money going to employee wages in-country, they can't just tax the income of those employees?

That's the thing: a small amount of the income trickles up to the top (it doesn't trickle down). It's not negligible, and it's not large; it's a relatively tiny proportion. Tourism means local businesses hiring local labor sell things, pay their labor, and run off with 4%-12% of the money (averaging 10%). Maybe they hide that 10% offshore; you get to tax the other 90% immediately, and the local employees take the rest of their wages and spend it.

So you raised wages, and you found that your employment went down because people don't "have more money to spend, so buy more things"; things cost more, and that "more money to spend" buys less stuff, and so does everyone else's (middle-class etc.) spending money, and that means fewer jobs. So what in the fuck is going on above with that last statement, if increased wage income doesn't go back into the economy?

The money isn't coming out of your economy and being fed to *others* in your economy.

In a tourism country, those wages are taken from the American or German or British economy, and they're poured into the French economy.

A $10 billion tourism industry that loses $1 billion to off-shoring and fails to take a 33.3% cut on that isn't losing $333 million to tax havening; it's losing $1 billion, in theory, assuming that money was ever going to be spent. That same tourism industry has $9,000 million flowing into the hands of wage workers interacting with tourists, which is of course getting taxed (15% in France, or $1,350 million), and also spent. That's money that wasn't in France before, but is now; and it's jobs that didn't exist in France before, but do now, at no cost to France's economy.

You really need a sales tax to capture the tourism industry? Your economy must be based on some weird, alternate universe where mathematics just works differently.

Re:Just fix it

[Coren22]

https://smile.amazon.com/s/ref...

Because of course Amazon stopped selling anyone's USB hubs the day they listed their own.

You really should stop making shit up, Amazon doesn't deny their third party program to people who sell things like what they sell at all.

Re:Just fix it

[godrik]

So with over 90% of their money going to employee wages in-country, they can't just tax the income of those employees?

You are ignoring the place where that income is realized matter for taxation and how easy it is to redirect fund to a foreign country. If you cut sales tax tomorrow, you will not raise local wages, the company will incur a large profit that it will offshore to a country where there is no business tax. The tourist pay the same amount, wage did not go up, the French government (in this example) loses tax revenue. The business owner cashes a lot of money.

Maybe they hide that 10% offshore; you get to tax the other 90% immediately

Sales tax is about 20% in france. So you are saying the government lose about 10%-15% of its income on tourist sales tax. That's about a billion dollar that they could get and they don't.

You really need a sales tax to capture the tourism industry?

"Needing" imply that there is no alternative solution. As usual, there are probably plenty of solutions. But that is one that works reasonably. Revenue stream in a global context is not an easy problem.

Re:Just fix it

[LynnwoodRooster]

In nearly every case I can think of, the seller is most likely already set up to collect local sales taxes (and does so). VERY few B2C businesses have no sales tax collections. And B2B businesses are already reporting things like sales and purchases and payments on their various tax forms (revenues, expenses, etc). I agree - it's not an extra burden at all - and would allow the best way to tax - on consumption, not income.

Re:Just fix it

[LynnwoodRooster]

Or perhaps we let countries compete on tax rates/structures and let each country how best to fund itself? Why does it have to be equal across all countries, other than trying to eliminate the concept of countries altogether?

Re:Just fix it

[Anonymous Coward]

Did you even read what you replied to? The issue here is trying to deal with companies making profits in one country, but not paying any tax in that country. That's not how it's supposed to be, it's unfair competition against companies that do pay taxes in that country, and it's taking money from the pockets of the taxpayers in that country. It's tax avoidance plain and simple, and it's legal only because there's no easy way to stop it. By all means, countries should be able to set any tax rates they want on businesses that are actually meaningfully operating in that country, but something needs to be done about profit shifting.

Re: Just fix it

[Anonymous Coward]

I think he's thinking the rare case, like Apple TV and Google Chromecast.

Re:Just fix it

[david_thornley]

It's also a lot easier to hide income than to hide outgo. Particularly in a country where people evade their income taxes in a big way, a consumption tax may be the way to go.

Re:Just fix it

[LynnwoodRooster]

Who says that's not how it's supposed to be? Perhaps that is the commodity one country can offer. Small places like Gibralter, Isle of Man, Seychelles - not a lot of natural resources, and extremely limited populations. They have nothing much to offer other than financial services - and they do that very well. But I guess if you want to do the modern liberal colonialism and dictate what sovereign nations should do, then give it a shot. Don't be surprised though when it goes nowhere...

Re:Just fix it

[sabbede]

That's a sales tax. Countries like Spain are also going after the corporate profits, despite already having had their bite at the apple when they taxed the sale. I suppose they haven't realized that a global economy means nations have to compete as well - in this case, in the form of corporate tax rates.

Re:Just fix it

[bluefoxlucid]

the company will incur a large profit that it will offshore to a country where there is no business tax.

That "large profit" is 10% at best. That was my point: the taxes on profits are a fraction of the money flowing into the country.

Sales tax is about 20% in france. So you are saying the government lose about 10%-15% of its income on tourist sales tax. That's about a billion dollar that they could get and they don't.

The French nation has $9 billion coming in from wages out of $10 billion being spent into the country. Cutting sales tax would allow tourists to buy 20% more, meaning you'd need to employ 20% more French people to supply and sell those things, meaning that money keeps flowing into the French economy. That causes population growth in France, creating more revenue.

Get Rid of The Loophole

[TommyNelson]

From TFA:

This is possible thanks to a loophole in international tax law and hinges on staff in Dublin concluding all sales contracts.

Its not as if that loophole is new or anything...

Re:Get Rid of The Loophole

[Anonymous Coward]

Exactly! Just because a corporation should be paying a lot more in taxes, doesn't mean they are evading taxes.

Yes, I feel that Google, Microsoft, Apple, and many more should be paying more in taxes than they currently do. But to ignore the law and just say "you aren't paying enough because We Say So" is wrong. What is to stop the government from then going after you and I and saying the exact same damn thing? Personally, I don't want to live in a country where I can follow all the tax laws, and then get hit with tax evasion just because someone doesn't like the cut of my jib.

Re:Get Rid of The Loophole

[Richard_at_work]

The UK passed the Finance Act 2015 which resolves this loophole.

Re:Get Rid of The Loophole

[Anonymous Coward]

Wow, the UK passed an act for Spain?

Re:Get Rid of The Loophole

[dhaen]

Don't be a twat, it's for the UK. The point is that any nation could do something similar.

Don't Be Evil

[Anonymous Coward]

Disrupt Tax.

Shell games and double talk

[sjbe]

a person familiar with the matter said, barely a month after the internet company had its headquarters in France searched on suspicion of tax evasion.

I don't think there is any doubt that they are evading taxes. The problem is that they appear to be doing so (technically) legally. I'm wondering when countries will wise up and finally start changing the laws to make this sort of tax dodging hard or impossible. I realize to some degree this is playing a game of legal whack-a-mole but it needs to be done.

A spokeswoman for Google said in a brief statement the company complied with fiscal legislation in Spain just as it did in all countries where it operated.

While that is most likely true it also is nothing more than avoiding the question. They know they are avoiding taxes and the fact that they manage to do so in some clever legal fiction doesn't make is any more ethical. Google is hugely profitable and the shell game they are playing to avoid taxes is reprehensible as far as I'm concerned. I'm particularly galled when they act like it is somehow the fault of the lawmakers that they are dodging taxes they really should owe.

Spare me the arguments about "it's legal so it's right" - lots of things are legal but aren't ethical and this is one of them. I'm an accountant and crap like this just infuriates me because I'm the one that would be asked to be "morally flexible" about this.

Re:Shell games and double talk

[evolutionary]

Sounds like an attempt to gather evidence before charges are laid. Possibly because they don't have any yet...shakedown is what this basically sounds like.

Re:Shell games and double talk

[Archangel Michael]

wise up and finally start changing the laws to make this sort of tax dodging hard or impossible.

Your #1 flaw in your presumption is you assume that the government has a RIGHT to collect taxes. It does not have that right. It is a necessary evil that we collect taxes, and everyone, everywhere should do everything in their power to avoid taxes, and keep their own money. I would consider it a duty of the citizen to avoid all taxes as legally possible.

Taxes are regressive. All of them.

Re:Shell games and double talk

[Anonymous Coward]

Your #1 flaw in your presumption is you assume that the government has a RIGHT to collect taxes. It does not have that right. It is a necessary evil that we collect taxes, and everyone, everywhere should do everything in their power to avoid taxes, and keep their own money. I would consider it a duty of the citizen to avoid all taxes as legally possible.

Taxes are regressive. All of them.

Before one can refuse to pay taxes in the entirety, one must first cease and desist using the services of a government. Otherwise, the cause lacks moral legitimacy, the same as a tenant in a building who refuses to pay any rent when they are still inhabiting and using the space which they are renting, and even demanding the landlord provide further services.

It's one thing to practice rent withholding when needed to compel the landlord to take some further action, but even then, the tenants are expected to pay.

Otherwise, it is engaging in theft with demands that the government serve for free.

Unless you can show that Google has abjured itself of any availment of the Spanish government?

Re:Shell games and double talk

[Rhipf]

Just remember that "Taxes are regressive. All of them." when infrastructure starts falling down around you.

Oops! Sorry too late.

Re:Shell games and double talk

[RobotRunAmok]

>> but it needs to be done.

No, it doesn't. It really doesn't.

>>lots of things are legal but aren't ethical and this is one of them.

Are you a priest? You're obviously not a lawyer...

>>I'm an accountant and crap like this just infuriates me

Ah. Gotcha. Then you're in the wrong profession for someone with your temperament and outlook. Whether you are right or wrong, you will always be miserable.

Re:Shell games and double talk

[Archangel Michael]

Your assumption is that we didn't have roads and schools and such before taxing everyone to death (hint: we did)

Your assumption that taxes we pay for these things aren't redirected to other things. (The government makes more on Gas than the oil companies)

Your assumption is that government is the only way to have these things (it isn't)

Your assumption is that oh wait, I see your point. You actually agree with me, just that you won't admit it.

Re:Shell games and double talk

[Ash-Fox]

I'm wondering when countries will wise up and finally start changing the laws to make this sort of tax dodging hard or impossible. I realize to some degree this is playing a game of legal whack-a-mole but it needs to be done.

Uhm, it's not up to those countries to change it. It's up to the EU. The EU is more interested in dealing with other problems right now.

Re:Shell games and double talk

[Anonymous Coward]

Your assumption is that we didn't have roads and schools and such before taxing everyone to death (hint: we did)

Your assumption is that we are being taxed to death, yet death is demonstratively not necessarily caused by taxes. Unless you believe entropy is a tax, but in that case, your problem is with the universe at large, not with governments. In the most cases, you will find that people live just fine with the tax burden they have. Perhaps they even live better.

Because no, you can't prove that roads and schools and such existed before taxes, let alone that they would exist without being paid for, as that historical demonstration would require a time machine, which you don't have.

Your assumption that taxes we pay for these things aren't redirected to other things. (The government makes more on Gas than the oil companies)

In the US? Not for motor fuel taxes they aren't. Your assumption is that they are making money on gas and diesel taxes, when the spending on transportation infrastructure is greater, is readily demonstrated as untrue for the US.

You might be able to show a country where the opposite is true, but your assumption would be already shown not to be universally so.

Of course, if you want to see the benefits of a developed transportation network, that can be shown. Has the public been enriched or not?

Your assumption is that government is the only way to have these things (it isn't)

Your counter-assertion is merely a denial, thus you are assuming it isn't, without offering reasoning, let alone proof.

Your assumption is that oh wait, I see your point. You actually agree with me, just that you won't admit it.

Really, you have to have people agree with you by simple assumption? How desperate are you for affirmation that you make it up?

Re:Shell games and double talk

[Archangel Michael]

one must first cease and desist using the services of a government.

Government compels, under threat of government guns, the use of Government services.

Your argument is invalid.

Re:Shell games and double talk

[Archangel Michael]

your assumption is that we are being taxed to death

We are taxed, daily, until death, and then taxed again. So, yes we are "taxed to death", just not in the way you intended. The moment you earn your first dollar, you are taxed on it, and every dollar after that, including the ones you save for your posterity, and those are taxed again, because people like yourself think government has a RIGHT to our money. I have a right to my money, that I earn. Taking, in the form of taxes, under threat of government guns, is nothing short of slavery. We've just changed the name.

Re:Shell games and double talk

[Shatrat]

All of Google's employees in Spain are paying taxes. I'm sure there are a dozen other way that Spain is getting some Euros out of google. They're just not getting as much as they would like. Spain is trying to maximize the tax revenue, Google is trying to minimize the tax expense. Normally that wouldn't be a problem but tax law is so complex that there are wild differences between that min and max based on buying things in the right places, registering things in the right way. If tax code were simpler the difference between the min and max would be smaller and people wouldn't get so bitter about this shit.

Re:Shell games and double talk

[swb]

As long as Google is willing to deposit the money into some country's local national bank and keep the deposits stable enough that they can be used for lending and capitalization purposes without a liquidity crisis, I'd guess that Google will always find a country willing to offer whatever tax protection they're looking for.

It's like football stadiums or new factories or anything that involves getting US states to bid against each other. It's a kind of prisoner's dilemma logic where there will be always someone willing to give in to get the benefits.

Re:Shell games and double talk

[Carewolf]

one must first cease and desist using the services of a government.

Government compels, under threat of government guns, the use of Government services.

Your argument is invalid.

Nope, you can always just leave. If you don't want the service of living in the country, leave the country. The government is just the governing body of the land. So get the fuck out if you don't like it.

Re:Shell games and double talk

[LynnwoodRooster]

I don't think there is any doubt that they are evading taxes. The problem is that they appear to be doing so (technically) legally.

Then it is not really tax evasion but tax avoidance. The former is illegal, the latter is legal and is pretty much what everyone (corporation and individual alike) does every time they file a tax return.

Re:Shell games and double talk

[LynnwoodRooster]

I sell products to a company in Spain, shipped from a factory in Malaysia. I am based in the US. How am I using the services of the Government of Spain? My customer is using those services, but I am not. So why do I have to pay taxes in Spain?

Re:Shell games and double talk

[LynnwoodRooster]

It's a bit out of date, but at least on the Federal level, the Government makes more on road fuel taxes than it spends on roads. The excess funds subsidies for trains, buses, and airplanes. Overwhelmingly gas taxes not only pay for interstates and Federal highway projects, but provide enough surplus that it's spent on public transport (which is heavily subsidized). And then when there's a dip in revenues, it's the highway infrastructure maintenance/expansion that is halted (that which directly creates the stream of revenue) in favor of that which is subsidized heavily. Easier to get people to swallow higher taxes if you inconvenience them...

Re: Shell games and double talk

[Anonymous Coward]

Perhaps you didn't notice the link I posted was from 2013, almost a decade more recent than yours.

Here is another.

Are you so enamored of your ideas that you don't check to see if they are still true?

It'd be one thing to offer real argument, but submitting a document you know is old? I doubt your credibility now.

Besides, if you want a real discussion, you would need to consider the environmental costs of those fuels which is not taxed but is taxing.

Re:Shell games and double talk

[david_thornley]

We need to collect taxes. We should do so as fairly as possible (recognizing that "fair" means different things to different people). Having some people who can avoid taxes and people in similar circumstances who can't isn't fair.

If everybody were to avoid their taxes, government would collapse. There would be no road building or maintenance, no police, no restraint on what natural monopolies like the power company can do, no national defense, no public education or libraries, etc. Everybody except criminals would be far worse off.

Re:Shell games and double talk

[Anonymous Coward]

We are taxed, daily, until death, and then taxed again. So, yes we are "taxed to death", just not in the way you intended.

No, "taxed to death" means that we die due to taxes. If you want to say that we are "taxed till death" then you chose the wrong expression. You should probably get a good lesson book on the English language, your mistake is rather obvious, and could certainly cause confusion if you meant something rather different.

The moment you earn your first dollar, you are taxed on it, and every dollar after that, including the ones you save for your posterity, and those are taxed again, because people like yourself think government has a RIGHT to our money.

Nope. It's because people like myself think government is providing services which have to be paid for, you really should try to understand how people think better. You don't have a good grasp of understanding it seems.

You may want to work on that as well.

Besides, I don't know about where you live, but in the US, the complaint is that too many people on the lower-end of income get services while not paying income taxes. Apparently reality conflicts with your ideal, just like it did with fuel taxes.

I have a right to my money, that I earn. Taking, in the form of taxes, under threat of government guns, is nothing short of slavery. We've just changed the name.

Nope. Slavery is quite different. Slavery is ownership, plain and simple. Government has obligations to you, and duties to fulfill. They are many and various, but include among them, your right to engage in changing the terms, and providing for your interests, and otherwise behaving properly. That is why you, and me, and everyone else, is free to modify it, by such means as are necessary and expedient. Slave-owners do not have the same requirements. However, since we reject the ownership of human beings, they may be treated as the anathema they are, since we reject the notion of reducing people to property. Ultimately, it may be the same tool, but the reasoning is different.

Re:Shell games and double talk

[Anonymous Coward]

Government compels, under threat of government guns, the use of Government services.

Your argument is invalid.

How so? You have not given a reason for it to be invalidated. Just an assertion.

Did you think that I would deny you the option to resist the government? Nope. If you feel you must use force to reject those government services, because force will be used against you, then I will still consider you to be acting under legitimate moral principles. So you are threatened by guns? Pull your own. That is your right.

Did you think otherwise, for some reason? Nope.

So take action. If you must take up arms, so be it. If you choose to effect your actions in some other way, do it.

Otherwise, you lack moral legitimacy.

Re: Shell games and double talk

[LynnwoodRooster]

Neither of your links address what mine does (well, your second one hints at it): diversion of funds from vehicles/road use to public transport causes. Cut that back and you wouldn't have the deficit in the transportation funds. The Federal Government consistently takes monies from sale of gasoline for personal vehicles and spends it on infrastructure projects and transportation initiatives not related to personal vehicles.

Re:Shell games and double talk

[sabbede]

Look at it this way, Spain taxes the transactions that occur within it's borders, but then decides it wants a cut of the profit too even though the profit is generated in another nation. There's nothing a nation like Spain can do about it. They have no right to tax profits generated outside their jurisdiction.

What they haven't done is accept that in a global economy, nations have to compete as well. Particularly in regards to tax rates. Without an international agreement on unified corporate tax rates, this will continue to happen. A single international authority regulating and taxing multinationals is the best way to go, but an agreement between nations to set the same tax rate would also take some heat out of the issue.

Re: Shell games and double talk

[Anonymous Coward]

Neither of your links address what mine does (well, your second one hints at it): diversion of funds from vehicles/road use to public transport causes. Cut that back and you wouldn't have the deficit in the transportation funds. The Federal Government consistently takes monies from sale of gasoline for personal vehicles and spends it on infrastructure projects and transportation initiatives not related to personal vehicles.

My links clearly state that the spending on transportation is being supported by funds from general tax revenues. That means the government of the United States, contrary to Archangel Michael's assertion, is not making money simply on those taxes, but rather using other taxes to supplement the spending on transportation. That also means, contrary to your own statement, whatever the conditions were in 2004, more recent sources indicate there is no "overwhelming" funding from the Federal gas tax that is providing a surplus, but rather a deficit is being corrected.

You might as well be arguing that if the Federal Government spent less wastefully on highways, the fund would have a surplus, or at the outrage of the taxes also being collected on fuel used to power string trimmers and lawnmowers.

Really, if you wanted to have a discussion on the preferred taxation method you wanted, you could do so, but offering false contentions is silly. You might as well be complaining about the taxation schemes of 1916. Instead of wasting our time with inaccurate allegations, just state your preferences.

Re: Shell games and double talk

[LynnwoodRooster]

Yes, because transportation spending is overwhelmingly going to public transport (NOT a Federal issue) and AMTRAK/rail. It is not going back to the source of the income. Get rid of those expenses and you'd find more than enough money to maintain roads.

Re:Shell games and double talk

[Anonymous Coward]

I sell products to a company in Spain, shipped from a factory in Malaysia. I am based in the US. How am I using the services of the Government of Spain? My customer is using those services, but I am not. So why do I have to pay taxes in Spain?

No operations in Spain? Then you're not like Google, who was operating in Spain. That's how their offices in Madrid got raided. Madrid, in case you are not aware, is the capital of Spain.

How exactly does your example relate to the circumstances under which this discussion is conducted? Are you not aware that the discussion is about a company using the services of a government, or are you trying to divert the discussion to some other issue? If so, then state so clearly, but I ask you to remember, that I am discussing a government where an entity is receiving its services, yet refusing to pay its taxes in the entirety, which is what Archangel Michael posited. As such, to establish moral legitimacy, the obligation is on said entity to reject the government. If you are unclear on this, please let me know what you don't understand.

Re: Shell games and double talk

[Anonymous Coward]

Yes, because transportation spending is overwhelmingly going to public transport (NOT a Federal issue) and AMTRAK/rail. It is not going back to the source of the income. Get rid of those expenses and you'd find more than enough money to maintain roads.

Amtrak has received under 2 billion dollars from the Federal government each year for the past few years, and that is less than the transfers from the General Fund to the Highway Trust Fund which is also on that page. So even if those funds for Amtrak are going through the Highway Trust fund, they can't be overwhelming. And if they're not funded through that fund, then bringing them up is even more irrelevant.

Spending on "public transport" is too nebulous a term to find information that is definitive on it, let alone discuss whether or not it is a "federal issue", though that is a separate discussion that would distract from the matter at hand anyway, so let's not bother. Nonetheless, given that your assertion about Amtrak is not sustained, and your prior track record of supplying an out-of-date by over a decade source, I cannot take your word as credible.

The CBO, however indicates that public spending (from all sources, federal, state and local), on highways is 165 billion, with mass transit receiving less than half of that. This is not focusing on the revenue streams (though you should note that Federal spending is not the majority anyway, and you haven't shown how much states collect from their own taxes, which complicates the analysis even more since their rates vary considerably, as does the share of local spending from cities and counties), but it does show that your contention that "transportation spending is overwhelmingly going to public transport" is not supported, since the largest share is, in fact, to highways, then the second is to water-related infrastructure. Sorry, but a distant third is not overwhelming.

And you should especially consider that this is not discussing the current state of expenses for maintaining the roads, merely addressing the current spending. It is possible that that current spending in the US on transportation infrastructure is far less than it properly needs to be anyway. So it could be that the best result for transportation investments would easily be far in excess of the current revenues from fuel taxes anyway, regardless of any diversions you might make from current spending. (And let's not forget, transportation investments are supposed to enrich us all, that is their purpose, isn't it?)

I'm sorry, but your assertions just don't seem to be supportable.

I think you are getting too caught up in your need to craft a story, that you are not paying careful enough attention to what you are saying being accurate. Or even meaningful. As I already said to you, really, if you wanted to have a discussion on the preferred taxation method you wanted, you could do so, but offering false contentions is a silly waste of time.

Why not just skip that? Say how you want to do things on their own merits, make an argument without going into unsupported facts.

Re: Shell games and double talk

[LynnwoodRooster]

Read the link I provided. It will show you that fuel taxes from cars are a net income relative to spending on highways. It's funding of passenger trains (more than just AMTRAK - there are Federal subsidies for commuter/light rail), buses and to a much lesser extent, airplanes. That's the point. But it doesn't fit your pre-determined conclusions (we need more taxes!) so...

Re: Shell games and double talk

[Anonymous Coward]

Read the link I provided. It will show you that fuel taxes from cars are a net income relative to spending on highways. It's funding of passenger trains (more than just AMTRAK - there are Federal subsidies for commuter/light rail), buses and to a much lesser extent, airplanes. That's the point. But it doesn't fit your pre-determined conclusions (we need more taxes!) so...

No, read the link I provided. You claimed "transportation spending is overwhelmingly going to public transport" which the link I provided indicates is doubtful, since the spending on mass transit is 65 billion, while the total highway spending is 165 billion. Add the rest? Ok, Aviation is 36 billion. Rail is 3 billion. Water is 10 billion. So we have 165 billion versus 114 billion. They simply are not spending overwhelmingly on public transportation. Sorry, but your claim is just not supported. We don't even have to worry about the federal/state breakdown, or the revenues, though that would offer further information if we wanted to look those up. Just as examining the actual costs of maintaining the desired level of transportation infrastructure would offer us more information. Or even the effects of more fuel efficient vehicles, including electric ones. But that's a matter for another day, I'm addressing your unsustainable claim.

You are the one with an agenda to push, whatever it may be, if you want to do that in an actually effective manner, I simply suggest you refrain from making up unsupported conjectures, when they are so readily disproved. You can make a much better case if you do not willfully destroy your own credibility in your own haste to push your preferred narrative.

I would respect you having a clearly stated position on transportation spending and the tax system by which you wish to fund it. I have disdain for your proclivity to make statements that tend to be unsupported by the actual facts. You are doing yourself a disfavor, harming your own position.

No extra accountant needed

[sjbe]

The seller doesn't want to do the paperwork of collecting the tax. I hardly sympathize. It's the cost of doing business. They can hire another accountant.

Actually the don't even have to hire a new accountant. Just task the one they already have looking for sneaky ways to dodge the taxes to take care of the problem. Wouldn't cost them any extra from a personnel standpoint.

Re:No extra accountant needed

[Dishevel]

No. You still need the sneaky guy. If you run a publicly traded company you kind of have a fiduciary duty to legally pay as little in taxes as possible. You are obligated to perform as well as possible for the investors.

Re:No extra accountant needed

[tripleevenfall]

All of this could be solved by moving to a consumption tax model rather than a revenue-based model.

Re:No extra accountant needed

[Dishevel]

Great. So for a consulting business I pay no taxes?
Consumption tax works great on individuals. Not so good for companies.

Re:No extra accountant needed

[AmiMoJo]

Maybe it's that bad in the US, but in Europe not so much. Your shareholders can't demand you break the law, or even flirt with it.

And the tax authorities in most countries are quite helpful, they will tell you if you should be paying more. In the case of France and Spain, Google was warned repeatedly that it owed the tax authority money, but just didn't pay up. Very unwise, and I'm sure the shareholders are irritated. The way to deal with these issues is to ask how much you need to pay, negotiate a little if you feel differently and then cough up the money.

Re:No extra accountant needed

[tripleevenfall]

They're consuming consulting services. Tax a percentage of what's billed.

Re:No extra accountant needed

[Dishevel]

The client is consuming consulting services. I am providing them.

Re:No extra accountant needed

[Anonymous Coward]

Hahaha, France, Spain...the way to deal with this is bribe the right legislature, or EU commissioner.

Re:No extra accountant needed

[Austerity Empowers]

Your shareholders can't demand you break the law, or even flirt with it.

No, they're not allowed to do that in the US either. For the most part, no one is breaking the law. The mechanisms they are using are fully legal, generally by exploiting legalisms that were intentionally left in the tax code for "generous campaign contributions". The butt-hurt feeling everyone has, that was their government selling them out, leaving these ways of not paying taxes everything thought they should be paying.

Now perhaps Google is breaking the law in these cases, that's for a court to figure out. I bet it's not so simple and clear cut. I have heard rumors however that Spain and France employ some extra-legal methods of dealing with these cases that involve some back scratching. And perhaps Google is going to pay a percentage of what it owes with a very disingenuous "My bad", and politicians are going to walk away talking about how they brought down the monster and somewhere some programs won't be paid for because the money doesn't exist.

Re:No extra accountant needed

[fustakrakich]

I don't believe companies really pay taxes anyway. They just raise the price to compensate. The argument seems to be who plays the part of tax collector for the government. And that should be the company's problem.

Re: No extra accountant needed

[Anonymous Coward]

And as per usual,that's the excuse that American firms use to hide behind.
How about the American govt changes that law,then they would have less excuse for their immoral,UN-ethical behaviour..

Re:No extra accountant needed

[dhaen]

Yea, consumption tax is like VAT in Europe. It's a consumer tax that is deductible for business, so transparent.

Re:No extra accountant needed

[LynnwoodRooster]

Does your business buy paper, Internet services, pay rent, provide drinks/snacks, ever have employees travel? You'll pay tax on anything you purchase. I guess if your business can exist without spending a single cent on anything then yes - you pay no taxes.

Re:No extra accountant needed

[MobileTatsu-NJG]

I don't believe companies really pay taxes anyway. They just raise the price to compensate.

Raising the price means fewer sales.

Re:No extra accountant needed

[fustakrakich]

Only briefly, if they do it suddenly and noticeably, which is not the way it happens.

Re:No extra accountant needed

[MobileTatsu-NJG]

It's called "what the market will bear", and they do that anyway because the hunger for profit is never satisfied.

Re:No extra accountant needed

[fustakrakich]

Yeah, okay. That's not my argument, which is that company taxes are in the price of whatever it is they sell. If taxes go up, so does the price. The tax is just tacked on.

Re:No extra accountant needed

[MobileTatsu-NJG]

Yes, I get that, and my point still stands: They cannot simply raise the prices to make up for the tax because: Supply & Demand. Put simply: Their margins are affected by the tax.

Re:No extra accountant needed

[fustakrakich]

But they do. The price of the article is not reduced when taxes go up. You just see a higher sales tax or VAT tacked onto that price, meaning you do pay more. Nothing is coming out of the company's hide. I have yet to ever see that happen. The market will bear a lot of abuse just to have the latest piece of gimmickry. Also, supply and demand hardly play a part. Prices are arbitrarily set. This goes on throughout every big market, oil, shipping, agriculture, and Walmart, not just banking. Prices are based on wagers made in the broker's office

Re:No extra accountant needed

[MobileTatsu-NJG]

Nothing is coming out of the company's hide.

Lower demand for their product.

Also, supply and demand hardly play a part.

Sigh.

Re:No extra accountant needed

[fustakrakich]

Lower demand for their product.

If you can show where that has ever been a chronic problem, please point me there. And even if it's true they will just lay people off. The company will not take the hit, and even if the company does, the executives will just find greener pastures and dissolve the company, and out of the ashes... you know the routine.

Sigh.

I did provide a link. I guess it depends on what you want to believe...

Re:No extra accountant needed

[david_thornley]

How much faith do you have in the altruistic tendencies of companies to get less money out of you than they could? Not quite a mustard seed's worth? Companies already set their prices for maximum profit. Assuming they do it right, if they lower the price they sell more but the reduced profit on each item more than offsets that. If they raise the price, they make more profit on each sale, but enough fewer sales to offset that.

Basically, if they could make more money by raising the prices to compensate for something, they'd have raised the prices already.

Increased corporate taxes may cause prices to go up, but the biggest impact will be on profits, not price. (Corporate income tax is paid out of profits. Since whatever is done to maximize profits will also maximize profits / 2, maximizing profits (at least in the short run) will result in the exact same behavior regardless of the tax rate.)

Re:No extra accountant needed

[MobileTatsu-NJG]

If you can show where that has ever been a chronic problem, please point me there.

I really don't have time right now to run around the internet sending you links that prove something you should already know. I do find it hard to believe you've never balked at a price increase.

Re:No extra accountant needed

[fustakrakich]

Not due to the tax. In fact, no, a general price increase did no such thing. I still have to pay bills and buy food and clothing, regardless the price. And middle/upper income people could hardly care less. Taxes might affect their business dealings, but not their personal habits.

High taxes can kill an economy, but the company and its officers will always be the very last to feel the pain, if they to feel any at all, ultimately using bankruptcy proceedings to stiff the creditors and renegotiate labor contracts. I don't know why you would feel this is not the case.

Re:No extra accountant needed

[fustakrakich]

How much faith do you have in the altruistic tendencies of companies to get less money out of you than they could?

Depends, the local bakery, auto mechanic, plumber, sure, they might, but Google, Apple, General Motors, General Mills, etc etc etc,,,? you're right, not even close to the mustard seed. They don't feel a thing until everything else slows down. The company is a tax collector, not a tax payer.

Re:No extra accountant needed

[MobileTatsu-NJG]

I don't know why you would feel this is not the case.

Because in their quest for greater profit they do all that anyway.

Re:No extra accountant needed

[fustakrakich]

So we're back where we started. The company collects taxes, it does not pay them. I have yet to see them absorb it on the price tag.

Re:No extra accountant needed

[MobileTatsu-NJG]

Throughout the course of this conversation you suggested several ways in which it does.

Re:No extra accountant needed

[fustakrakich]

I will attempt a small correction. The tax is not on the tag. It's added up at the register and you won't see it until you get your receipt. How much do you think the tax affected the decision to purchase in the first place? And what are the chances of you cancelling it and demanding a refund after seeing it? What is the deal here? I just don't get what you are arguing.

Re:No extra accountant needed

[MobileTatsu-NJG]

It's added up at the register and you won't see it until you get your receipt ... And what are the chances of you cancelling it and demanding a refund after seeing it?.

It's not my intention to be obnoxiously pedantic, so apologies in advance, but let's be serious: You see the total before you hand the money over. That's why PoS systems have light-up displays. Even if you somehow didn't catch the tax until you paid, the fact that it went up will turn up in your budgeting in one way or another because you end up with less money.

How much do you think the tax affected the decision to purchase in the first place?

It happens all the time. In fact taxes are used to affect sales, like soda in New York City. Heck, where I live they change the tax on gas to change demand. One of the local mattress places recently had a sale where they 'pay the sales tax' for you.

I just don't get what you are arguing.

I'm just saying that there's no such thing as 'passing it on to the customer' because the customer can always say no. Every business will have to make a decision about their pricing, and not all will arrive at the same conclusion.

Re:No extra accountant needed

[fustakrakich]

the customer can always say no.

That is something I never argued. What percentage do you think actually do say no? Not enough to affect the company, or even government policy as far as I can see.

The only way I know how to effectively tax a company is to go after the capital they are hording and keeping out of circulation. Then we would get somewhere.

Re:No extra accountant needed

[MobileTatsu-NJG]

Not enough to affect the company, or even government policy as far as I can see.

Believe me, any company that advertises their products will see even a miniscule change. They really do fine-grain tracking on their sales.

This is turning circular and I really wasn't trying to do that. You know where I'm at, I think I know where you're at. Not sure I see a resolution, here. Please, feel free to say your bit, and I'll read it, and you'll get the final word because I am gonna bail. Have a good evening, man.

Re:No extra accountant needed

[david_thornley]

Right. Therefore, will you accept that they already have the prices set so they get the maximum profit? And, if they could increase profit by raising prices, they'd have already done so?

Re:No extra accountant needed

[fustakrakich]

Say whaaa? That was so incomprehensible, I don't know how to respond..

I'll try one more time. Taxes are tacked onto the point of sale. The company is simply the administrator to collect those taxes. It never pays taxes from its own pocket, except maybe on capital, but they lobbied that down to damn near nothing also.

What in the world is the difficulty here? Is it the simplicity? Tell me...

Seriously? Nobody?

[Yvan256]

Alright, I guess it has to be me...

Spanish authorities raid Google offices over tax

  "Nobody expects the Spanish Inquisition!"

Re:Seriously? Nobody?

[PPH]

http://i.imgur.com/A47KJbH.jpg

Re:Seriously? Nobody?

[prowler1]

I came for this, leaving satisfied.

Modern Money Theory...

[tonywestonuk]

Just let them off! Tax revenue is not used to pay for public services anyway. Its there to give value to money and to prevent inflation. If google want to store the money in an offshore account, let 'em, as its going to be doing exactly the same as if it was taxed.

This is a raid!

[Anonymous Coward]

It was a server farm. The only employee was a security guard, who was using the Dance With Gazelle app.

No real economic impact

[bluefoxlucid]

People greatly overestimate the economic impact of business tax shenanigans. An enormous amount of business activity goes to wages, and very little to profits. Even Apple, an outlier in Cupertino, has $28 billion of operational costs and $38 billion of revenue; in Cupertino, their 13,000+ employees gain $2 billion in income, which Cupertino would like to tax at 8%, taking $800,000, which is somehow less than the money rolling into the local economy already.

Business income taxes have the potential to make up less than 1/10 of the tax revenue; I can raise the amount of money floating around in consumer pockets by twice as much just by fiddling with the tax system, without taxing the rich enormously (~41%, and that would come down in a few years--or never materialize, if we incrementally adjust the system over 3-5 years), and with a reduction of 4.5% marginal (~11% proportional) in business taxes.

Of course nobody wants to do that. Stabilize HUD families? Greatly improve the financial standing of single-mother households? Make the middle-class 25% more wealthy? Get the homeless off the street, and get food to the 50 million Americans experiencing hunger? No, no, no! We want to attack the rich instead; screw the poor!

Re:No real economic impact

[Anonymous Coward]

I'm not 100% clear where the $800,000 number is coming from since the math doesn't work with any of the numbers you have, but if you meant tax $2B in income at 8%, that is $160,000,000, not $800,000.

Re:No real economic impact

[godrik]

It is a matter of fairness. Either business income tax is useful, and there is no reason to let shady companies dodge them. Or they are not useful and no company should pay them.

Overall, I feel that taxing businesses helps avoiding many cases of a company switching from salaries of top employees to business accounts.

Finally, you seem to assume that the Spanish tax code is somewhat the same as the US tax code. I don't know the Spanish tax code, but in France, companies pay a non negligible amount of taxes.

Re:No real economic impact

[bluefoxlucid]

I'm an optimizer, not a feelings-obsessed git. Fairness is secondary. Essentially, I don't take the idea that X is more important because of moral imperative when either A) X actively causes an increase in the amount of sickness, suffering, and death; or B) X has less of an impact than Y. It gets scaled, to a degree; lawsuits are important for re-establishing fairness, even though what really happens is money transfers from down the line (i.e. you sued the auto manufacturer for making a defective part that lead to your hospitalization? Great! All their other customers get a touch poorer, you get your $350,000 back, and your life is un-destroyed).

Either business income tax is useful, and there is no reason to let shady companies dodge them. Or they are not useful and no company should pay them.

You could also say either paracetamol is an important pain control drug and everyone should take lots of it, or it's a liver toxin and its manufacture and possession should be illegal. You'd be wrong both ways.

you seem to assume that the Spanish tax code is somewhat the same as the US tax code. I don't know the Spanish tax code, but in France, companies pay a non negligible amount of taxes.

It's non-negligible here; it's just a small proportion, and not overall important compared to other tax sources. In my Citizen's Dividend (the thing I was referring to), I keep the funding source stable by using a 17% flat tax source, which captures business and personal taxable income (the general fund is still a progressive tax system, from 0% to 24%).

My point was over 90% of all business revenue directly filters down to employee wages (as in: businesses buy from other businesses, who pay employees and buy from other businesses, etc.). Some 10% goes to profits in total across the board, which is either paid out as dividend (mostly to rich people, who bank a lot of it), spent in the next year, or flatly banked. That means, yes, money flows upwards and gets stuck there; and that flow is a small stream, not a roaring monsoon.

This is actually an incomplete analysis, because it ignores the broken concept of money as wealth (more money doesn't mean more wealth; money only represents the output of all labor applied in the economy). That's actually a really complex consideration as well.

To be brief: we have 5.6% UE4, which includes both the job-seeking unemployed (UE3) and everyone else who would take a job if it were available (mostly, discouraged workers who have given up looking because they perceive a lack of jobs). In theory, moving the banked income down from the top increases consumer spending; in reality, the absolute limit of that increase is the 5.6% unemployment base; and in practice, dropping below ~4% unemployment causes localized labor shortages and damages your economy.

You can solve excess employment by making people poorer: cut their working hours. In practice, that means people *are* poorer: they get less of the income (if their yearly salary stays the same, the extra 20% wages going into all products means they all get 20% more expensive), hence can't buy as much stuff, reducing the job demand an increasing unemployment to a stable level. Honestly, if it worked any other way, cutting working hours wouldn't reduce employment. (The second option is to leave it to sort itself out, which results in a population spike until you create a *lot* more poor people. This leads to more-rapid consumption of physically scarce resources, meaning they run out earlier relative to when we create replacement technology to allieviate their scarcity.)

All told, there's proportionally little to grab from the top. Not just less, but *little*. Other optimizations can reduce top-tier taxes and still increase consumer buying power--to dangerous levels, resulting in employment shortages. We can moderate those optimizations to such a degree that we flatly eliminate homelessness and hunger; and there are other

Re:No real economic impact

[Solandri]

If you're going to argue fairness, then businesses deserve to vote in elections. No taxation without representation, right?

The stupid thing is, it doesn't matter whether you tax businesses or individuals. Businesses don't generate productivity - their employees do. A business is just a group of people agreeing to work together as a group. So all business taxes end up being paid for by people anyway. Via lower wages for employees, higher prices for customers, and lower dividends for stockholders. This misguided notion of "fairness" for business taxes places taxes on a whack-a-mole target where it's easily dodged or shifted onto unintended targets (customers and low-level employees). If you don't like rich stockholders making money from owning a share of a business, just tax rich people directly. Why would you ever think it's a good idea to instead tax the company they own, where they can shift the cost of those taxes onto anyone but themselves?

Re:No real economic impact

[godrik]

If you're going to argue fairness, then businesses deserve to vote in elections. No taxation without representation, right?

I don't see what this have to do with taxing fairly businesses? If there is a business tax code, it should apply the same to all businesses. Here in particular what happens is that some companies manage to pay tax lawyer to dodge taxation by using the complexities of the system. Certainly, this is not what the tax code (and international free trade treaties) intended.

Whether companies should vote is a completely separate issue.

The stupid thing is, it doesn't matter whether you tax businesses or individuals. [...snip...] Why would you ever think it's a good idea to instead tax the company they own, where they can shift the cost of those taxes onto anyone but themselves?

I have no particular opinion on whether it is a good idea or not. But clearly moving from a model to another as consequences. I do not know whether these consequences are good things or bad things, but there are differences.
If you only tax people income and not business profits, then the following scheme becomes possible. If my company makes a lot of sales in 2016, it has a high income and so potentially a high profit which would be taxed, so it has some incentive in paying me in 2016 rather than split in two payments, one in 2016 and one in 2017.
If there is no business tax, then it does not matter to my company whether to pay me half in 2016 and half in 2017 or to pay me full in 2016. But because my personal income tax rate is increase with income, I would rather be paid in two payments to reduce the total amount of taxes paid.
Now, I am not arguing that one is preferable to the other one, but clearly there are differences in how the money flows around, so it DOES matter whether you tax businesses or individuals.

(one could argue that a flax tax rate would solve that issue, but that is a different discussion.)

Re:No real economic impact

[godrik]

I'm an optimizer, not a feelings-obsessed git. Fairness is secondary.

So do you think it is right that some companies manage to dodge taxation while some other can not afford the legal fees to enter a tax privileged status ?

It does not matter how you organize taxation or society in general. If there is a rule, you want it to be followed and not avoided by some technicality that enable ones to dodge the taxation.

Take your particular favorite tax regime which is if I understood correctly, tax everyone income at 17%. Now, if you have to non neighboring competing businesses, I don't know, a shoemaker and a baker. The shoemaker give the baker a pair of shoe to the baker every month, and the baker give the shoemaker bread everyday. They both declare the transaction as wasted bread and misconstructed shoe. They did not pay their 17% tax on it, despite clearly the shoes is an income of the baker, and the bread is an income of the shoemaker. Variants of this is illegal in most places, because it is unfair and it bypassed the rule.

Re:No real economic impact

[bluefoxlucid]

So do you think it is right that some companies manage to dodge taxation while some other can not afford the legal fees to enter a tax privileged status ?

I think this: the focus on this above question is leading to over a million deaths every year (in 2000, it was estimated at 875,000); a focus on *other* *problems* eliminates nearly 100% of those deaths.

To me, this circle-jerk is akin to standing around stroking your meat while you watch a teenager get raped, then claiming absolution because you didn't *do* anything. The problem is exactly that: you *should* have done something.

It does not matter how you organize taxation or society in general. If there is a rule, you want it to be followed and not avoided by some technicality that enable ones to dodge the taxation.

The current tax-dodging behavior is a stable system: businesses, rich people, poor people, and the middle-class are all trying to minimize their tax burdens. As the system stands now, appreciable increases in tax avoidance among the rich and big businesses are NOT CAPABLE OF BREAKING A SYSTEM WHICH 100% TOTALLY ELIMINATES POVERTY.

Not. Capable.

That means I can implement this system, end homelessness, end hunger, get 29% more money into the hands of single mothers, get 27% more money into the hands of families, get 48% more money into the hands of single-adult minimum-wage households, REDUCE BUSINESS TAXES TO 35% (currently 40%), eliminate 6.2% of payroll taxes, and IT STILL WORKS (just barely) if businesses find a way to avoid paying 100% of the income taxes they're paying now. If they offshore 100% of their taxes, it's a little rougher, but it still actually works.

The other upshot is wealth increases with technical progress, meaning 17% of the income represents (a lot) more buying power 10 years from now than it does today; and population can't outgrow that increase, and doesn't (we've recovered from the most recent dip). The purchasing-power parity or GDP-per-capita here shows that, per population, there is more money. In other words: taking any fixed percentage of all the income and dividing it among all the people gives each of those people enough money to buy more stuff year after year.

In practice, it took about 35% (or more?) taxes to implement the system I describe in 1950--which would have collapsed the economy if you'd attempted it. In 2013, the systems this obsoletes cost 17.2% of the income, and the new system costs 17%, so it's actually cheaper, thus viable (you don't disrupt the economy by switching over, if you transition carefully).

All of that means the "it would be rough" part quickly becomes "it would not matter at all." By 2028, it's possible to not tax the businesses for the Dividend at all and have the system behave as it would if implemented today; by 2039, the United States revenue position would be identical to today's if the businesses paid 0 tax.

By contrast, the upper 10% of PERSONAL INCOMES makes up 48% of ALL INCOME in the United States. I want to use a progressive tax system to hold high-income earners's taxes stable while steadily lowering the taxes on the lower- and middle-classes as the income gap widens; however, at some point, we are going to want to start pulling those top-tier taxes down a little. You want to attract rich people with big personal incomes to stay here in the U.S. and pay U.S. income taxes, not offshore their personal wealth by becoming citizens of another country.

France charges around 40% to high-income earners; the United States has a 30% overall income tax rate, and shouldn't charge more than 4/3 that to the upper-income earners (i.e. 40%), *and* will have trouble dialing that down unless we get our Federal spending down to lower levels. As a long-

A Raid? Really?

[bennebw]

"Raid"...is that journalistic hyperbole or for real? Are we talking husky dudes and dudettes in tactical gear storming a Google office here? In the US, at least in my experience in the Fortune 500, you don't have to "raid" an office for tax info. You have to gain access to their transaction data and tax data. That doesn't take a raid because the chances of Google fleeing the country for parts unknown is nil. Unless they do things differently in Spain and France, the data they're looking for ain't sitting around in boxes of paper or floppy drives in the office.

Re:A Raid? Really?

[keltor]

Politics works a bit difference in Spain and France and they LOVE to "raid" businesses, especially foreign businesses. Currently the EU has set a bunch of rules in place that make all of what these companies do VERY legal and some government officials hate it (these officials would rather Spain be Spain, and not just a "part of the EU."

Yes governements do have the right to collect tax

[sjbe]

Your #1 flaw in your presumption is you assume that the government has a RIGHT to collect taxes. It does not have that right.

They do have a right to collect taxes. It's not even a question. In the US this is enshrined in the Constitution. You might try reading it sometime. Other countries have similar legal frameworks. Your notion that governments have no right to collect taxes is preposterous nonsense. Furthermore it would be impossible to have a functioning civil society without taxation and you can't have taxation in the first place without a legal framework to support it. It's legal, appropriate and necessary. Get over it.

It is a necessary evil that we collect taxes, and everyone, everywhere should do everything in their power to avoid taxes, and keep their own money. I would consider it a duty of the citizen to avoid all taxes as legally possible.

Taxes are the price of civilized society. Don't like taxes? Go live in the woods somewhere off the grid. If you want to be a part of society then shut up, pay your fair share, and enjoy the results. Don't think the amount you are asked to pay is fair? Work to get the tax law reformed but understand that you will need to pay enough to cover the government services that we collectively demand.

Taxes are regressive. All of them.

I don't think you have a clue what the word regressive actually means when it comes to tax.

Re:Yes governements do have the right to collect t

[Archangel Michael]

They do have a right to collect taxes

It is NOT a right of government to collect taxes. It is the consent of the governed that provides that authority. It is a limited power (see below) Consent isn't a right. Taking without consent is what we call "Rape". ;)

In the US this is enshrined in the Constitution [wikipedia.org].

If you're going to refer to an document, and use that to justify taxes, you should also realize that that document limits taxation for only two purposes.

While authorizing Congress to levy taxes, this clause permits the levying of taxes for two purposes only: to pay the debts of the United States, and to provide for the common defense and general welfare of the United States.

You might try reading it sometime.

I read it all the time. I actually know what's in it. I use specific words (right, authority, consent etc) on purpose.

Taxes are the price of civilized society.

Civilization and society doesn't require taxes. Taxes should be avoidable, and unavoidable taxes are a violation of the 14th amendment of involuntary servitude. In this case, slavery to the state. You should read it sometime. :)

Are progressive. For more progressive, rebate

[raymorris]

You can make sales taxes as progressive as you want them to be. I'm sure you've seen this before, it's as simple as a rebate of $X.

Suppose you want people who spend $10,000 or less to pay zero tax, and you want people who spend a lot to pay about 15%, with the people who spend the most paying a higher percentage than those who spend a medium amount.

You tax transactions at 15%, then refund $1,500. Simple.
The person who spends $10,000 ends up paying zero taxes.
Someone spending less than $10K ends up paying negative taxes (their refund is more than they paid).
Someone spending $200K pays 15% of the $200K = $30,000, minus $1,500 = $28,500 = 14.25%.

Even without a rebate, a simple 10% sales tax IS progressive in the sense that people who earn more pay more.
Because basic necessities like groceries are exempt, it's also already progressive in a percentage sense. For people who earn less, groceries etc are (or should be) a larger percentage of their income. Therefore a larger percentage of their income is exempt from taxes. If lower income people are spending all their money on Starbucks and Air Jordan shoes, well you can't fix stupid.

Re:Are progressive. For more progressive, rebate

[bluefoxlucid]

That's a negative income tax with a sales tax funding source. It poses a simple problem: you have to get the rebate before you can spend it.

People who earn more and put their money into a savings account to grow are able to gain more money without paying taxes on it. They don't pay taxes on what they put into savings (just like you don't pay taxes on what you put into 401k), and they don't pay taxes on the interest. For people with a *lot* of income, they can negotiate high-interest savings with the bank (loan rates are 4.25%? I can easily go to Well's Fargo and Bank of America with $30M and have them fight over who gets to hold it, eventually getting maybe 3.5% interest rate so they can lend money at 4.25%-19% depending on if they're supporting a low-interest car loan or a credit card--just need someone to let me hold $30M for a bit).

Again: the US national tax rate is 30%. You're talking about a 30% sales tax just to replace income tax (not any other tax).

Also who really pays sales tax anymore? Maybe if you're a poor black kid and want some gum or potato chips--we'll penalize you for buying junk food or anything not in the narrow range of exempt purchases (including clothes--why would you need shoes?). Middle-classers import everything to bypass sales tax. Warehouse logistics have made shipping and distribution cheap by breaking up a few hundred dollars among several thousand units of product per truckload; stuff I buy that would cost $60 in-store costs me $53 online, with free shipping if I take the slow (5-7 business day) tier. Sales tax on $60 is $3.60 here, and the cost to actually move that stuff is around 20-80 cents (depending on if it's a fancy pen or a 16-piece dinner set). Electronics are huge for this: $350 phone is not taking up much size or weight in the shipping system, and is packed in with thousands of other objects on the long-haul truck and hundreds on the last-mile truck.

So far, people who earn more pay less, and people who earn a lot more pay a lot less.

Re:Are progressive. For more progressive, rebate

[Ash-Fox]

The issue is corporation tax, not sales tax.

Re:Are progressive. For more progressive, rebate

[Joe_Dragon]

Gas has a lot of tax in it.

Re:Are progressive. For more progressive, rebate

[Joe_Dragon]

I know of a tax scam? that some people do is they buy from a out of state distributor but they pick up at the in state factory and they don't pay any sales tax.

Re:Are progressive. For more progressive, rebate

[bluefoxlucid]

Pretty much. We're trying to fix it, and that's raising some complexity issues (tracking sales tax is hard).

The real problem is businesses are supposed to report sales taxes; out-of-jurisdiction businesses have no reason to care, and you have no way to audit people's purchases. That's on top of the basic issue of higher-income-earners sending proportionally less of their money to purchases, thus less-taxable (a sales tax is a much steeper tax exemption for the rich than current deductions).

Re:Are progressive. For more progressive, rebate

[bluefoxlucid]

It does. So does alcohol. These are also regressive taxes, although gas less-so. In the case of alcohol, it's a tax per liter, and you can really only drink so much; in the case of fuel, your private jet does indeed burn more than my Mazda 3.

Re:Are progressive. For more progressive, rebate

[Anonymous Coward]

>it's a tax per liter, and you can really only drink so much

Challenge accepted!

Re:Are progressive. For more progressive, rebate

[Coren22]

Slashdot user Anonymous Coward was found today dead of an apparent alcohol overdose. Police are investigating to determine if bluefoxlucid should be taken in for questioning as a possible accomplice.

Pot, meet Kettle

[ArhcAngel]

Spain. The country that signs power purchasing agreements and then changes the laws so they can renege on their agreements.

Re:Yes governements do have the right to collect t

[Ash-Fox]

Are you a freeman?

what do the radiers expect to find?

[Eponymous Coward]

A company like Google surely has all of their records online. I can understand a raid 20 years ago when there would be a wall of file cabinets to cart away, but what do they expect to get today? A thumbdrive?

Re:Yes governements do have the right to collect t

[dunkelfalke]

It is NOT a right of government to collect taxes.

Of course it is. In fact, it is not just a right, but even a duty to collect taxes to fund it.

If you're going to refer to an document, and use that to justify taxes, you should also realize that that document limits taxation for only two purposes.

"General welfare" is a very nebulous term. You may have a different opinion of what exactly is "general welfare" than the people who are a part of the government, but it doesn't make yo right and them wrong.

I read it all the time.

Then you fail at reading comprehension. It is sad that a German has to explain all these things to you.

Civilization and society doesn't require taxes.

Again, this is just your opinion and not confirmed by facts. All civilised countries collect taxes.

In this case, slavery to the state.

And again that shows that you don't have a grasp of your own language. Slavery is when you are a property that can be owned, sold and damaged and cannot legally leave the servitude. Nothing of it is even remotely comparable to paying taxes.

Justification of authority

[sjbe]

It is NOT a right of government to collect taxes. It is the consent of the governed that provides that authority. It is a limited power (see below) Consent isn't a right. Taking without consent is what we call "Rape".

Ok Captain Pedantic. You want to play rules lawyer with the specific legal meanings of those words. Fine. The supreme law of the land give the government the authority collect taxes. This means our government has the right/authority/legal-basis to collect taxes. Pick the word that suits you but it all means the same thing in practice. Consent of the government has nothing to do with whether or not the government has the legal right to collect tax. Consent of the governed is the theory of where authority comes from, not what the authority actually allows. Instead of governing authority being derived from a diety as was often the case previously, our founding fathers used a justification for government based on philosophy and practicality instead of mythology. It's about our COLLECTIVE consent to the existence of a particular government, not what that government's powers might actually consist of. It has essentially no relevance to your obvious distaste for taxation in spite of the fact that that same taxation is what permits the very rights and lifestyle you cherish so much.

If you're going to refer to an document, and use that to justify taxes, you should also realize that that document limits taxation for only two purposes.

"...to pay the Debts and provide for the common Defense and general Welfare of the United States". Yes I already pointed that out via a link. General Welfare is a pretty broad notion and probably covers whatever it is that you think you shouldn't be obligated to pay for. It's in the Constitution which means that the government has been granted the power to tax you.

I read it all the time. I actually know what's in it. I use specific words (right, authority, consent etc) on purpose.

Evidently you either don't read it or don't understand it since you seem to persist in this belief that our government has no legal authority to tax you.

Re:Justification of authority

[Anonymous Coward]

"Instead of governing authority being derived from a diety as was often the case previously, our founding fathers used a justification for government based on philosophy and practicality instead of mythology. It's about our COLLECTIVE consent..."

Hmm... this is among the oddest injections of a gratuitous false dichotomy into a debate I've seen in a while. The Founding Fathers were largely Protestant Christian and Deist. The primary political opposition was Catholicism, not religion.

And "philosophy and practicality" leads to no objective conclusions. Never has, never will.

Oh, and there is no such thing as "collective consent". People don't share a brain.

Anyway, though at base people functionally have to pay taxes, and I'm not debating that, it comes down to "we want money, therefore it will happen, viable rationale or not". To try to turn it into a moral stance with a bizarre anti-theist twist yields nothing remotely viable. Including your post.

Re:Justification of authority

[Archangel Michael]

The supreme law of the land give the government the authority collect taxes.

Authority isn't a right. Yes, I agree that it has the authority, but that doesn't make it a right. People have rights, governments have authority, by consent of the governed.

Please see the 14th amendment, involuntary servitude, and tell me when I am free to keep what I earn, completely, without being threatened by government guns. Changing the name of the slave owner doesn't change the effect.

Re:Justification of authority

[Anonymous Coward]

Authority isn't a right. Yes, I agree that it has the authority, but that doesn't make it a right. People have rights, governments have authority, by consent of the governed.

Pedantic. You are arguing that you do not like the term used, not with the validity of the point.

You have a nice office there with nice stuff

[Joe_Dragon]

You have a nice office there with nice stuff now you should pay your tax bill or we can just take your stuff and call it even.

Re:Yes governements do have the right to collect t

[drinkypoo]

Slavery is when you are a property that can be owned, sold and damaged and cannot legally leave the servitude. Nothing of it is even remotely comparable to paying taxes.

I agree with all of your comment except this part. You can make a direct comparison between taxation and slavery. The average person cannot afford to depart their nation of birth, especially if that nation is the USA; the US makes it difficult and expensive to renounce your citizenship. The USA is operated as an oligarchy; though it masquerades as a democracy, it really is not one. The state reserves the right to do you harm if you don't pay your taxes. Is it strictly slavery? No, it is not. But do the two situations have a whole lot in common? Oh yes, they certainly do. The state then goes on to do evil in our name with the money we give them. Oh yes, they do some good things with it too, but most of it is based on the broken window fallacy.

Re:Yes governements do have the right to collect t

[Archangel Michael]

According to the US government, I am a slave. See the 14th Amendment. I am compelled under threat of government guns to forfeit my wages to support other people. ;) So I am under no illusions that I am a free man.

Still against Brexit?

[xxxJonBoyxxx]

So...Google. Are you still against Brexit then?

The EU is reacting in fear

[Anonymous Coward]

It had to be expected. In shock and panicking after Brexit, the EU reacts in the only way it knows: blaming the US and taking it out on the Jews. As the continent collapses into a bonfire of mad cow dung, Germany once again threatens peace with schutzstaffeln, panzerdivisionen und sauerkraut while France shits escargots. It's a sad show, like a corrida with Down- syndrome children in lieu of the bulls. Sad really.

Re: The EU is reacting in fear

[Anonymous Coward]

"... a corrida with Down- syndrome children in lieu of the bulls." Hey, I'd pay to see that! Do mongs run after red flags?

greetings

[micahraleigh]

Hi!

We're you're friendly representatives from the government!

We want you to know your business in this country is important. We recognize you have the ability to do business in any country you wish. We are committed to supporting business and technology here.

At the moment we believe you may have some money located at this facility. In order to best serve you we would like to inspect the money at our offsite location. All resources will be returned in a timely fashion after everything has been accounted for which may include inspection, auditing, and confiscation to better serve your needs.

Thank you for your cooperation!

where tax money goes

[Anonymous Coward]

Tax money goes to cronies.

Government exists to enrich politicians and their cronies.

Loopholes and ethics

[sjbe]

No, it doesn't. It really doesn't.

So the countries don't mean to collect the tax? Then why did they pass the laws to try to collect it? If they want to collect the tax then they need to pass the laws to close the loopholes. If they don't want to collect the tax then they need to repeal the taxes so the companies don't have to deal with the burden of trying to dodge the taxes. Either way it DOES need to be fixed. I don't really give a crap how they fix it so long as we don't have large companies with entire departments whose sole purpose is the avoidance of legally levied taxes. THAT is nothing but a drain on society.

Are you a priest? You're obviously not a lawyer...

What does being a priest have to do with having a sense of ethics? Those are orthogonal concepts. Sounds like you might be lacking a sense of ethics if you think dodging taxes through convoluted legal maneuvering is behavior to encourage.

Then you're in the wrong profession for someone with your temperament and outlook.

Gee thanks for enlightening me that accountants are for some reason not supposed to have a sense of morality. [/sarcasm] How about you leave it to me to decide what might suit my temperament since you know almost nothing about me and you clearly know nothing about accountants in general.

Re:Loopholes and ethics

[Anonymous Coward]

You should be mad at the government for writing poorly worded tax code. If politicians wanted people to pay taxes, then they ought to pass laws that specifically are ment to collect taxes. Putting in a whole bunch of exemptions is exactly how you let people and organizations not pay taxes.

It isn't Googles fault the Spanish government wrote a tax code made of swiss cheese. Simplify the tax code would give everyone less room to wiggle and the desired tax would indeed by paid.

Nothing will change though. Like many governments, the Spanish likely have lots of legal language to make things more "fair" for people and they also have a lot of legal language that helps this politicians friend but not that politicians friend.

Intensely amusing...

[Anonymous Coward]

I find this incredibly amusing, since these very same countries wrote the laws that made this practice legal in the first place.

Now, facing debt loads that will only increase with an aging population, high unemployment, and increased immigration, these same countries are searching for a way to increase their tax income.

May I suggest reforming your tax laws, instead of trying to go after companies who are just doing what they can legally to minimize their tax bills.

Short-sighted thinking at its best.

This isn't really news is it?

[Anonymous Coward]

Bankrupt government run into ground by socialist idiots wants to pick pockets of successful company. More news at 11.

Re:Yes governements do have the right to collect t

[david_thornley]

You are required to forfeit nothing. If you don't earn any money, and don't spend any, and don't own property, you don't owe taxes. I'm not recommending this as a lifestyle, but it's one legal way to avoid all taxes. If you do decide to take advantage of what society offers, society gets a cut.

A slave does what he or she is told. You can do whatever you can get away with, although some of your money will be taxed. A slave eats what is provided, and lives where quartered. You can buy all sorts of food and live wherever you can afford.

Calling taxation slavery is trivializing slavery, and makes it clear that you have no sense of proportion.