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

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

[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.