Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes

[Aabidano]

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.

Google’s income shifting -- involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” -- helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.

http://www.bloomberg.com/news/2010-10-2 ... holes.html

[masteen]

I heard you can get a Dutch Sandwich in Amsterdam for like 200 euros now!

[Metanis]

Our tax laws suck. This is a perfect example of the fallacy of attempting to tax corporate "income". All you do is make the tax lawyers and accountants rich. Of course THEY are ALSO shielding their income using every loophole known to man.

And this is a vivid example that you would raise tax revenues if you drastically LOWERED tax rates. They wouldn't fight so hard to shield income if the tax rate were only 5% - 8%.

Just to put the fear of God in Google some big lefty politician like Waxman should put out a proposal to tax them on their use of gigabits on the "public" Internet. I wouldn't actually be for this kind of user fee but it would be fun to hear the cries of anguish from the denizens of the "cloud". Sort of like when Obama jokes about using the IRS to investigate Fox News and the Chamber of Commerce.

Disclaimer - I've never liked Eric Schmidt since he was the CEO of Novell and rode that pony into the ground. Novell had a vastly superior product in the 90s and Schmidt wouldn't cozy up to IBM when they were interested in buying it. They squandered their market lead and their prospects and then Schmidt bailed to run Google.

One last comment... this puts to shame Google's supposed culture of not doing evil. They are just another big bunch of lefty hypocrites.

[Aslanna]

And this is a vivid example that you would raise tax revenues if you drastically LOWERED tax rates. They wouldn't fight so hard to shield income if the tax rate were only 5% - 8%.

Yeah. You're clearly not delusional. Do you have anything to back that up?

[Aabidano]

Wasn't going to bother responding to him, he's just cutting and pasting from alt.blackhelicopters anyway.

I think we can all agree though that US tax law is hosed to put it mildly. Profits on goods and services sold overseas for instance essentially can't be brought back to the US without a massive tax hit. It's cheaper to leave the money outside the US, of course you've got to do something with it so you move manufacturing & such overseas as well. Money comes back to the US to pay dividends, bills, salaries, etc.., the real benefit the money could do happens elsewhere.

That's leaving aside markets like China that don't allow you to repatriate most of your income. If you want to sell anything from outside China in China, X% of the profit isn't allowed to leave the country. Leading to more business moving to China, the R&D centers being built there exist in large part because the money isn't actually good for anything else. It's like a coal miner being paid in company money, good only at the company store.

[Metanis]

Google "lower marginal tax rates" and do your own research. (I made a funny! "Google google"!)

Leave aside for the moment the entire idea of "government revenue" and think of the big picture. Almost every job in the private sector is provisioned by a corporate entity. I would go so far as to say that nearly every PRODUCTIVE job in the entire economy are produced by corporations. (Since many [most] government jobs are actually anti-productive.)

Wait a minute now for the snorts and screams to subside. Then think for a moment. perhaps it would be better to finance government using revenues from personal income taxes and let the corporations keep their money to invest in more jobs?

Nah, I know, the entire idea of freedom from government interference is INTOLERABLE! Welcome to the 21st century.

[Aabidano]

Wait a minute now for the snorts and screams to subside. Then think for a moment. perhaps it would be better to finance government using revenues from personal income taxes and let the corporations keep their money to invest in more jobs?

I agree with you in principal, I just don't think the reality would bear it out. This branch and Trickle Down in general assume a level of altruism that just doesn't exist in an economy made up of public corporations & executive compensation as it currently exists.

Your entire argument shows why I didn't vote for anyone who even smelled of tea party. Conservatism != Corporatism.

[masteen]

Income tax is fucking socialist, but watered down with arcane bureaucracy so the lawyers (and those that can afford their services) can abuse it while the rest of the people are stuck footing the bill. Don't even get me started on how much money is wasted on the IRS.

We really need to come up with something better, and I'm not talking about a flat income tax or any of the other bullshit facelifts. Any kind of income tax is a flawed system for a capitalist economy. We need a national sales tax, with exemptions structured similarly to how state sales taxes do it, and extra taxes on luxury items. The more you consume, the more taxes you pay.

[Siji]

And this is a vivid example that you would raise tax revenues if you drastically LOWERED tax rates. They wouldn't fight so hard to shield income if the tax rate were only 5% - 8%.

Yeah. You're clearly not delusional. Do you have anything to back that up?

Didn't you know that corporations are only interested in saving huge amounts of money and not less-huge amounts? I mean come on! Who wants to bother saving millions instead of billions? What a waste of time..