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> That seems absurd by free enterprise standards and I am genuinely curious to know why refusing to do this would be called "evil." When taxes come up, it tend

> That seems absurd by free enterprise standards and I am genuinely curious to know why refusing to do this would be called "evil." When taxes come up, it tends not to be a well-thought, cohesive, pros-and-cons thing. It tends to be an emotional/identity thing. Some people think and almost always argue it'd be a good thing if companies gave more money over to governments. Me, I think it's very good for the world on every level for Google to pay less taxes. They're hiring the best people, acquiring companies and giving liquidity to founders, run amazing free services (search, Gmail, Google Earth, Google Maps, Google Finance, Google News, Google Voice, Google Reader, Feedburner, many many others). Also, they're internally investing in energy and robotics like the auto-driven cars thing, and their high level personnel seem to invest really well too (like in genetics research). Anyone who thinks that England would do a better job with the money than Google hasn't been to England, or hasn't thought this through very much.

rbranson 16y ago
Obviously we should always look at large companies with skepticism, but Google is clearly building a long-term brand and trying to generate goodwill by investing in massive R&D efforts. This is rare among large companies. Most seem focused on the quarterly report. If they were IBM or Oracle, who undoubtedly have similar practices, perhaps I might feel a little more betrayed. I still believe Google, for the most part, is not evil. Thankfully though, we are a nation of laws. As much as I despise the practices of some businesses, I am perfectly happy that it's not any one person's single opinion that keeps these companies in business.
dbingham 16y ago
Well, it's up to England's citizens to change the efficiency of England's government. Google is doing great things. By but dodging its taxes, it is forcing ordinary citizens to pay more. Or make do with less. It doesn't matter whether it would do better with the money. I think I could do better with my tax money than the US government. But then, that's not my choice to make. My job is to work to make sure that the US government does better with my tax money. Not to deny the government the money. If I don't pay, someone else will have to. And that's not okay. It's like saying I need your sandwich more than you do. I'm hungrier, I could make better use of it, therefor I should get your sandwich. Even if I could legally take your sandwich. It's still not okay. It's your sandwich! If I take it, you go hungry.
- lionhearted 16y ago
  > By but dodging its taxes, it is forcing ordinary citizens to pay more. Or make do with less. See, I'd disagree with you and say the opposite. I think England taking money from Google would mean less infrastructure and research out there in the world, meaning common citizens would be forced to pay more for services instead of Google's free services, or make do with less. > I think I could do better with my tax money than the US government. But then, that's not my choice to make. I believe it should be. Really, I mean that, I think taxes on productive labor are evil. Really, actually, unmitigated evil. I'm not against taxes, I'd actually be in favor for high property taxes divided split between federal, state, and local, which would encourage economy of space, reduce waste, and discourage real estate speculation while encouraging development. High taxes are okay. But taxing earned income, no way. Demanding a percent of honest labor to me seems no different than claiming ownership over a percent of a man. I think it's tyranny, and that in the future people will look horrified at income taxes the way we look at feudalism, serfdom, slavery, and other forced claims over a man's labor. But I understand I'm currently in the minority on that point of view.
  - dbingham 16y ago
    What if my income is $250 million? It still evil for the government to claim a percentage of that to provide services?
    - lionhearted 16y ago
      > What if my income is $250 million? It still evil for the government to claim a percentage of that to provide services? To make $250 million honestly, you'd have to produce value far in excess of $250 million. And yes, taxing people for producing value with their own labor is wrong to me. This is not an argument that all taxation is bad. You need taxes to run society. But taxing earned income seems wrong to me - the government doesn't own you, nor does it own your labor. I believe that. It's your life, you own it, and you own the product of your hands and mind. You should pay for the property you use, which effectively means you're paying for wherever you receive services. Wealthier people tend to use more property, meaning they pay more naturally. This seems sensible to me. Claiming ownership over a man's labor does not seem sensible to me.
loumf 16y ago
It's neither good nor evil. Google's board and executives are legally obligated to maximize shareholder value. Shareholders can sue otherwise. If governments want more tax, they should close loopholes and Google will comply with the law.
- dennisgorelik 16y ago
  Government should focus on trimming expenses instead of raising taxes. Google's shareholders deserve part of Google's profit much more than US government. Shifting money from government to shareholders increases likelihood of further innovations.
- tow21 16y ago
  "Google's board and executives are legally obligated to maximize shareholder value. Shareholders can sue otherwise." Common fallacy. No they're not, and no they can't. See, eg http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1013744 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1013744
  - RickHull 16y ago
    Are you saying that a corporation does not have a fiduciary duty to its shareholders? That paper just expresses a limitation of conclusions that can be drawn from a single case, Dodge v Ford.
    - rdouble 16y ago
      This is a counter to the commonly espoused internet-forum notion that there's some law corporations would be breaking if they don't engage in the most sociopathic behavior possible in order to "maximize shareholder value". There is in fact no such law. Bringing up Dodge vs. Ford is relevant, because that is indeed where the concept of "maximizing shareholder value" was brought up, and it's the only case ever cited. The notion that shareholders can bring about a suit in the United States because Google is not dodging enough taxes enough is absurd.
Anechoic 16y ago
run amazing free services (search, Gmail, Google Earth, Google Maps, Google Finance, Google News, Google Voice, Google Reader, Feedburner, many many others). Also, they're internally investing in energy and robotics like the auto-driven cars thing None of those products/services would be possible but for the government spending taxpayer money to develop the infrastructure behind those services (the internet, roads, GPS, etc).
- hugh3 16y ago
  Personally, I think that if infrastructure (rather than wealth redistribution) were really the main business of government then I wouldn't have any objection to paying taxes. I'm sure that GOOG pays enough taxes in one way or another to pay for its fair share of the world's roads. This is more than I can say for the bum sitting on the street corner.
- ataggart 16y ago
  >None of those products/services would be possible but for the government spending taxpayer money... This is sloppy reasoning. Just because A contributed in some measure to B does not imply B could only have come about because of the contributions of A, nor does it imply that more of A will yield more Bs. Further, absent a parallel world in which such different choices were made, one could just as easily argue on economic grounds that the resources confiscated would have been otherwise put to more effective, productive use in satisfying the wants of the common man.
  - Anechoic 16y ago
    Just because A contributed in some measure to B does not imply B could only have come about because of the contributions of A, nor does it imply that more of A will yield more Bs. I'm not saying that at all. Google can offer the services that it does because it can ride on the back of the infrastructure developed beforehand and the taxes we pay now will enable future entrepreneurs to provide services utilizing potentially different infrastructure.
  - notahacker 16y ago
    Although Sebastian's original post stopped just short of doing so, it would be equally sloppy to suggest that Google's ability to come up with amazing free (but profitable) services was a consequence of their tax avoidance.
jdietrich 16y ago
It's a curious thought, but I actually think I'd prefer to be a subject of Google than Her Majesty's Government. Larry, Sergei, if you're reading - please make a bid for UK PLC. It's weighed down with debts and the current management are a shower of shite, but the headquarters are pretty swanky and I hear there are some great engineers on the payroll in Cambridge.
- eru 16y ago
  But we are not on the payroll of the Queen in Cambridge.
- rdtsc 16y ago
  That is a very common idea among right-wing Americans -- they'd rather have companies take care of us than the government. The government is wasteful and full of beaurocrats. Let Walmart, P&G, and Monstanto clothe, wash and feed rather than the beaurocrats in Washington. I guess the idea is that many educated and informed consumers will pick among the best companies and competition will drive the costs down.
  - philwelch 16y ago
    That is a very common idea among right-wing Americans -- they'd rather have companies take care of us than the government. No, right-wing Americans want to take care of themselves. They would just rather freely pay for certain services (health care, for instance) from competing private firms than be provided it by the government. Framing the question as "who will clothe and feed and wash us" is implicitly a leftist framing. Taken literally, it rises to absurdity--physically, most people clothe and feed and wash themselves, and even more generally, it's hard to name a successful country where the government provides most people with clothing, food, or soap (though I'll grant the running water).
    - rdtsc 16y ago
      > most people clothe and feed and wash themselves How so? Most don't own the means to produce all those things. Most people buy those goods and choose between a range of available products. The fundamental flaw with that (at least as far as I see) is what happens if the products are unsafe. Imagine that FDA wasn't there (or its European equivalent) and companies could sell you anything whatsoever as food. How often have you gone shopping with a pestiside testing kid, a bacterial testing kit and a geiger counter? How do you know that all 15 type of shampoo you can buy don't all have mercury in them? Basically both extremes don't work. A completely planned economy will not work but I have not seen a liberatrian utopia either so far. The one advantage of the government is that at least in theory you can cast a vote to effect some change. You could not do that if you are run by Google. Maybe I don't like Gmail and Gmail is the only mail in town, I can't force Google to change it. But can at least attempt to call my congressman if I don't like a particular upcoming bill.
MalUK 16y ago
Why is England mentioned in this comment? Google Ireland is based in the Republic of Ireland, which is not related to England.
- SeamusBrady 16y ago
  Whoops! Well spotted. Somebody committed a political faux pas there. All these wet rainy island nations in the North Atlantic tend to blur together obviously... It is interesting for me as an Irish person to see this brought up as our government (a sorry lot) are under huge pressure to keep jobs and money in the country. Putting this under the spotlight is the last thing they need. Our economy is in a pretty poor state.
- gaius 16y ago
  Because Google uses Ireland to avoid paying tax on revenues earned in England.
  - MalUK 16y ago
    That's not really an issue. Businesses in the EU are mostly taxed at their base, so it's up to them which country they choose. The problem is the use of the Netherlands to funnel the cash, which means the tax revenue is escaping the EU. Effectively, they have set up shop in an EU country, they are enjoying the benefits like infrastructure, state educated population, health care, and are allegedly paying practically nothing for it.
notahacker 16y ago
The NHS employs a lot more people than Google and carries out research and development into saving people's lives. Sure, what Google does is great, but I'm really not convinced that thinking up ever more creative outlets to display targeted advertising is necessarily a better outcome for society than spending the money on the UK public sector, which has many worthwhile projects of its own. I'm going to go out on a limb here and say that sometimes multimillion sums are better spent on schools and hospitals than buying startups to wind up (big companies, like governments, have a tendency to overpay and make some blunders). The original article pointed out that Google owed its very existence to that paragon of state-sponsored inefficiency: the research university. Calling it "evil" to carry out their fiduciary duty by legally shifting tax burden to the less well-off might be a stretch, but it's equally a stretch to suggest that we're better off because Google pays less tax. It's not as if they'd be dirt poor if they paid a tax rate comparable to that of profitable startups...
- tkahn6 16y ago
  but it's equally a stretch to suggest that we're better off because Google pays less tax In absolutely no way is it a stretch to say that and I'm terribly surprised you have any upvotes. Are you aware of how many services Google provides for free that make my life (and probably yours) better? Google Search Google Maps Android Google Navigation (on Android) Google Patent Search Google Book Search (Working with libraries to digitize old books) Gmail Google Translate Google Code Google Summer of Code Thousands of tech talks made available online Google Docs Google Calendar and a lot more... One of the core tenets of capitalism is that the success an innovation of private companies benefits the public. This isn't true in all cases, but most certainly it is in the case of Google. sometimes multimillion sums are better spent on schools and hospitals Do I even need to cite a source that says throwing more money at the public school system won't stop them them being so shitty? That's a pretty common thing to hear now -- especially on HN, and I very much think it's true (from personal experience). And with hospitals, what exactly do you want more money for? More beds? More nurses? More money for the uninsured? Are you sure that will fix our nation's healthcare problem? I'm not an expert by any means whatsoever on this topic, but as far as I know, the quality of America's healthcare system, bad or good, is largely a function of governmental policy.
lsc 16y ago
my problem with it is not so much that google is paying fewer taxes, but that this complex tax structure encourages "innovation" in tax avoidance rather than innovation in things that actually create value. How much money goes into building and checking the legality of those tax avoidance schemes? a lot, I bet. I'm fairly certain, for example, that my company would not be able to afford something like that. A simpler tax law not only makes things more fair (maybe it's just sour grapes, but I don't think it's fair that there is one tax rate for corps like mine, who have one part-time accountant, and another, much lower tax rate for giant corporations that can afford massive teams of tax lawyers.) but it makes the economy more efficient. The goal of closing those loopholes should be to make it in Google's best interest to spend their effort on, say, improving search rather than avoiding taxes.
A1kmm 16y ago
Company taxes are, in most parts of the world, levied on company profits, not company revenues. So if Google paid higher taxes, company expenditure would be the same, but dividends and / or share price would be lower. So the only point that still stands is 'giving liquidity to founders'; I'm sure the founders already have enough capital to bootstrap practically any innovative tech business they want.

rbranson 16y ago

Obviously we should always look at large companies with skepticism, but Google is clearly building a long-term brand and trying to generate goodwill by investing in massive R&D efforts. This is rare among large companies. Most seem focused on the quarterly report. If they were IBM or Oracle, who undoubtedly have similar practices, perhaps I might feel a little more betrayed. I still believe Google, for the most part, is not evil. Thankfully though, we are a nation of laws. As much as I despise the practices of some businesses, I am perfectly happy that it's not any one person's single opinion that keeps these companies in business.

dbingham 16y ago

Well, it's up to England's citizens to change the efficiency of England's government. Google is doing great things. By but dodging its taxes, it is forcing ordinary citizens to pay more. Or make do with less. It doesn't matter whether it would do better with the money. I think I could do better with my tax money than the US government. But then, that's not my choice to make. My job is to work to make sure that the US government does better with my tax money. Not to deny the government the money. If I don't pay, someone else will have to. And that's not okay. It's like saying I need your sandwich more than you do. I'm hungrier, I could make better use of it, therefor I should get your sandwich. Even if I could legally take your sandwich. It's still not okay. It's your sandwich! If I take it, you go hungry.

lionhearted 16y ago
> By but dodging its taxes, it is forcing ordinary citizens to pay more. Or make do with less. See, I'd disagree with you and say the opposite. I think England taking money from Google would mean less infrastructure and research out there in the world, meaning common citizens would be forced to pay more for services instead of Google's free services, or make do with less. > I think I could do better with my tax money than the US government. But then, that's not my choice to make. I believe it should be. Really, I mean that, I think taxes on productive labor are evil. Really, actually, unmitigated evil. I'm not against taxes, I'd actually be in favor for high property taxes divided split between federal, state, and local, which would encourage economy of space, reduce waste, and discourage real estate speculation while encouraging development. High taxes are okay. But taxing earned income, no way. Demanding a percent of honest labor to me seems no different than claiming ownership over a percent of a man. I think it's tyranny, and that in the future people will look horrified at income taxes the way we look at feudalism, serfdom, slavery, and other forced claims over a man's labor. But I understand I'm currently in the minority on that point of view.
- dbingham 16y ago
  What if my income is $250 million? It still evil for the government to claim a percentage of that to provide services?
  - lionhearted 16y ago
    > What if my income is $250 million? It still evil for the government to claim a percentage of that to provide services? To make $250 million honestly, you'd have to produce value far in excess of $250 million. And yes, taxing people for producing value with their own labor is wrong to me. This is not an argument that all taxation is bad. You need taxes to run society. But taxing earned income seems wrong to me - the government doesn't own you, nor does it own your labor. I believe that. It's your life, you own it, and you own the product of your hands and mind. You should pay for the property you use, which effectively means you're paying for wherever you receive services. Wealthier people tend to use more property, meaning they pay more naturally. This seems sensible to me. Claiming ownership over a man's labor does not seem sensible to me.

loumf 16y ago

It's neither good nor evil. Google's board and executives are legally obligated to maximize shareholder value. Shareholders can sue otherwise. If governments want more tax, they should close loopholes and Google will comply with the law.

dennisgorelik 16y ago
Government should focus on trimming expenses instead of raising taxes. Google's shareholders deserve part of Google's profit much more than US government. Shifting money from government to shareholders increases likelihood of further innovations.
tow21 16y ago
"Google's board and executives are legally obligated to maximize shareholder value. Shareholders can sue otherwise." Common fallacy. No they're not, and no they can't. See, eg http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1013744 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1013744
- RickHull 16y ago
  Are you saying that a corporation does not have a fiduciary duty to its shareholders? That paper just expresses a limitation of conclusions that can be drawn from a single case, Dodge v Ford.
  - rdouble 16y ago
    This is a counter to the commonly espoused internet-forum notion that there's some law corporations would be breaking if they don't engage in the most sociopathic behavior possible in order to "maximize shareholder value". There is in fact no such law. Bringing up Dodge vs. Ford is relevant, because that is indeed where the concept of "maximizing shareholder value" was brought up, and it's the only case ever cited. The notion that shareholders can bring about a suit in the United States because Google is not dodging enough taxes enough is absurd.

Anechoic 16y ago

run amazing free services (search, Gmail, Google Earth, Google Maps, Google Finance, Google News, Google Voice, Google Reader, Feedburner, many many others). Also, they're internally investing in energy and robotics like the auto-driven cars thing None of those products/services would be possible but for the government spending taxpayer money to develop the infrastructure behind those services (the internet, roads, GPS, etc).

hugh3 16y ago
Personally, I think that if infrastructure (rather than wealth redistribution) were really the main business of government then I wouldn't have any objection to paying taxes. I'm sure that GOOG pays enough taxes in one way or another to pay for its fair share of the world's roads. This is more than I can say for the bum sitting on the street corner.
ataggart 16y ago
>None of those products/services would be possible but for the government spending taxpayer money... This is sloppy reasoning. Just because A contributed in some measure to B does not imply B could only have come about because of the contributions of A, nor does it imply that more of A will yield more Bs. Further, absent a parallel world in which such different choices were made, one could just as easily argue on economic grounds that the resources confiscated would have been otherwise put to more effective, productive use in satisfying the wants of the common man.
- Anechoic 16y ago
  Just because A contributed in some measure to B does not imply B could only have come about because of the contributions of A, nor does it imply that more of A will yield more Bs. I'm not saying that at all. Google can offer the services that it does because it can ride on the back of the infrastructure developed beforehand and the taxes we pay now will enable future entrepreneurs to provide services utilizing potentially different infrastructure.
- notahacker 16y ago
  Although Sebastian's original post stopped just short of doing so, it would be equally sloppy to suggest that Google's ability to come up with amazing free (but profitable) services was a consequence of their tax avoidance.

jdietrich 16y ago

It's a curious thought, but I actually think I'd prefer to be a subject of Google than Her Majesty's Government. Larry, Sergei, if you're reading - please make a bid for UK PLC. It's weighed down with debts and the current management are a shower of shite, but the headquarters are pretty swanky and I hear there are some great engineers on the payroll in Cambridge.

eru 16y ago
But we are not on the payroll of the Queen in Cambridge.
rdtsc 16y ago
That is a very common idea among right-wing Americans -- they'd rather have companies take care of us than the government. The government is wasteful and full of beaurocrats. Let Walmart, P&G, and Monstanto clothe, wash and feed rather than the beaurocrats in Washington. I guess the idea is that many educated and informed consumers will pick among the best companies and competition will drive the costs down.
- philwelch 16y ago
  That is a very common idea among right-wing Americans -- they'd rather have companies take care of us than the government. No, right-wing Americans want to take care of themselves. They would just rather freely pay for certain services (health care, for instance) from competing private firms than be provided it by the government. Framing the question as "who will clothe and feed and wash us" is implicitly a leftist framing. Taken literally, it rises to absurdity--physically, most people clothe and feed and wash themselves, and even more generally, it's hard to name a successful country where the government provides most people with clothing, food, or soap (though I'll grant the running water).
  - rdtsc 16y ago
    > most people clothe and feed and wash themselves How so? Most don't own the means to produce all those things. Most people buy those goods and choose between a range of available products. The fundamental flaw with that (at least as far as I see) is what happens if the products are unsafe. Imagine that FDA wasn't there (or its European equivalent) and companies could sell you anything whatsoever as food. How often have you gone shopping with a pestiside testing kid, a bacterial testing kit and a geiger counter? How do you know that all 15 type of shampoo you can buy don't all have mercury in them? Basically both extremes don't work. A completely planned economy will not work but I have not seen a liberatrian utopia either so far. The one advantage of the government is that at least in theory you can cast a vote to effect some change. You could not do that if you are run by Google. Maybe I don't like Gmail and Gmail is the only mail in town, I can't force Google to change it. But can at least attempt to call my congressman if I don't like a particular upcoming bill.

MalUK 16y ago

Why is England mentioned in this comment? Google Ireland is based in the Republic of Ireland, which is not related to England.

SeamusBrady 16y ago
Whoops! Well spotted. Somebody committed a political faux pas there. All these wet rainy island nations in the North Atlantic tend to blur together obviously... It is interesting for me as an Irish person to see this brought up as our government (a sorry lot) are under huge pressure to keep jobs and money in the country. Putting this under the spotlight is the last thing they need. Our economy is in a pretty poor state.
gaius 16y ago
Because Google uses Ireland to avoid paying tax on revenues earned in England.
- MalUK 16y ago
  That's not really an issue. Businesses in the EU are mostly taxed at their base, so it's up to them which country they choose. The problem is the use of the Netherlands to funnel the cash, which means the tax revenue is escaping the EU. Effectively, they have set up shop in an EU country, they are enjoying the benefits like infrastructure, state educated population, health care, and are allegedly paying practically nothing for it.

notahacker 16y ago

The NHS employs a lot more people than Google and carries out research and development into saving people's lives. Sure, what Google does is great, but I'm really not convinced that thinking up ever more creative outlets to display targeted advertising is necessarily a better outcome for society than spending the money on the UK public sector, which has many worthwhile projects of its own. I'm going to go out on a limb here and say that sometimes multimillion sums are better spent on schools and hospitals than buying startups to wind up (big companies, like governments, have a tendency to overpay and make some blunders). The original article pointed out that Google owed its very existence to that paragon of state-sponsored inefficiency: the research university. Calling it "evil" to carry out their fiduciary duty by legally shifting tax burden to the less well-off might be a stretch, but it's equally a stretch to suggest that we're better off because Google pays less tax. It's not as if they'd be dirt poor if they paid a tax rate comparable to that of profitable startups...

tkahn6 16y ago
but it's equally a stretch to suggest that we're better off because Google pays less tax In absolutely no way is it a stretch to say that and I'm terribly surprised you have any upvotes. Are you aware of how many services Google provides for free that make my life (and probably yours) better? Google Search Google Maps Android Google Navigation (on Android) Google Patent Search Google Book Search (Working with libraries to digitize old books) Gmail Google Translate Google Code Google Summer of Code Thousands of tech talks made available online Google Docs Google Calendar and a lot more... One of the core tenets of capitalism is that the success an innovation of private companies benefits the public. This isn't true in all cases, but most certainly it is in the case of Google. sometimes multimillion sums are better spent on schools and hospitals Do I even need to cite a source that says throwing more money at the public school system won't stop them them being so shitty? That's a pretty common thing to hear now -- especially on HN, and I very much think it's true (from personal experience). And with hospitals, what exactly do you want more money for? More beds? More nurses? More money for the uninsured? Are you sure that will fix our nation's healthcare problem? I'm not an expert by any means whatsoever on this topic, but as far as I know, the quality of America's healthcare system, bad or good, is largely a function of governmental policy.

lsc 16y ago

my problem with it is not so much that google is paying fewer taxes, but that this complex tax structure encourages "innovation" in tax avoidance rather than innovation in things that actually create value. How much money goes into building and checking the legality of those tax avoidance schemes? a lot, I bet. I'm fairly certain, for example, that my company would not be able to afford something like that. A simpler tax law not only makes things more fair (maybe it's just sour grapes, but I don't think it's fair that there is one tax rate for corps like mine, who have one part-time accountant, and another, much lower tax rate for giant corporations that can afford massive teams of tax lawyers.) but it makes the economy more efficient. The goal of closing those loopholes should be to make it in Google's best interest to spend their effort on, say, improving search rather than avoiding taxes.

A1kmm 16y ago

Company taxes are, in most parts of the world, levied on company profits, not company revenues. So if Google paid higher taxes, company expenditure would be the same, but dividends and / or share price would be lower. So the only point that still stands is 'giving liquidity to founders'; I'm sure the founders already have enough capital to bootstrap practically any innovative tech business they want.