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Google shifted $23B to tax haven Bermuda in 2017
- rhacker 8y agoSo like get a rogue country to finance a $200M private army to take over the island.
- nolok 8y agoAnd do what ? It's not like there is $23B in cash laying around for them to steal. Even if they went and stole the hardware server they wouldn't have the money. They would have more luck by taking Larry Page hostage (and no, it wouldn't work either).
- tareqak 8y agoYour comment reminded me of a thought I had not too long ago: what would stop a superpower like the United States from going around shaking down all the supposed tax havens? They wouldn't have to declare war outright, they could just impose a no-fly zone and put a navy cordon in international waters. In the cases of land-locked tax-havens in Europe, the superpower would need to negotiate with the tax havens of the bordering countries, so it's less feasible, but still possible. Edit: This would be specifically for individuals hiding their wealth abroad and declaring a lower than actual income, and not for corporations that publish their balance sheets.
- fixermark 8y agoIt would disrupt the delicate framework of trust that the top level of global economics flows upon, and ultimately, the US economy is a trust-based animal. The more interesting scenario would be a smaller government trying to embarrass or blackmail the US by doing something similar with THEIR military, and that's the stuff of James Bond movies. ;)
- fixermark 8y agoNow THAT'S what I call systems thinking. ;)
- deleted 8y ago[deleted]
- samstave 8y agoIf I were a financial terrorist - the countries internet connections I would be going after would be all located in the Caribbean....
- lostlogin 8y agoGenerally you don’t label yourself a terrorist. Maybe ‘Freedom fighter’ or similar?
- samstave 8y agoGeez - I am not labeling "me" as a terrorist -- What I am saying is that if anyone wanted to have a major material impact on the largest companies in the world - with them offshoring most of their revenues in the carribean banks to avoid taxes - those tiny islands must have poorly protected infrastructure... I find it ironic that Google and Apple and FB have extremely well protected physical security surrounding their datacenters, but have trillions of dollars in assets in little Island banking systems which likely have few, and easily accessible, physical undersea cables providing their main services....
- manigandham 8y agoIt's not like the movies. You can't just hack into some servers and steal money. You can destroy all of their computing infrastructure and internet connections and not change anything, other than calling a lot of international attention to yourself.
- samstave 8y agoHonest question: If you "transfer" billions of dollars to "Bermuda" or some such - where does that money actually reside? Wouldn't Bermuda have their financial systems hosted in, perhaps, Switzerland? If you were to cut off internet to the actual island of Bermuda, what actual financial impact would it have on those funds. Would they be effectively quarantined to Bermuda? Or are they just legally labeled as being under Bermudian financial jurisdiction in whatever financial cloud these DB fields physically live?
- sergiotapia 8y ago"Number One: In 1945, corporations paid 50% of federal taxes; now they pay about 5%. Number Two: In 1900, 90% of Americans were self employed; now it's about 2%." - Deus Ex
- solarkraft 8y ago90% self employed? Woah? Were there virtually no companies?
- munificent 8y agoIn 1900, a much larger fraction of the population were either: 1. Women that were homemakers. 2. Men that worked in agriculture.
- pm90 8y agoThere were likely less franchises and chains so every town had their own one-off local Diners instead of Dennys, had a shoe store instead of Amazon etc. The extent to which chains/internet has elliminated these mom and pop stores is staggering... and also why there was so much "self-employment" back then Disclaimer: I'm making an intelligent guess here; these views are not (AFAIK) backed by any study
- EduardoBautista 8y agoOperating a McDonald's, although a franchise, is just as self-employed as a local diner.
- sergiotapia 8y ago"Corporations are so big you don't even know who you're working for. That's terror. Terror built into the system."
- m_b 8y agoWhat a surprise. But still we should continue to think about them as a company working to make the world a better place... Everything is fine.
- jbob2000 8y agoThis assumes that paying tax makes the world a better place. I am sure Bill Gates has played similar accounting tricks and look, he's about to rid the world of Malaria. Yes tax dollars are used for social good, but they also fund the military and provide subsidies for all sorts of nefarious industries.
- tashoecraft 8y agoIf you don't like what your tax dollars fund, elect different politicians.
- decebalus1 8y agoThe fact that tax money is perceived as mismanaged is never an excuse to avoid paying taxes. That's a different problem with it's own solution. At least a citizen has the theoretical power to vote out people who mismanage tax money. You don't get a say about how a billionaire spends his/hers money. Actually, most of them are hoarding it. And the corporations holding the money become more powerful, being able to greatly influence the aforementioned mechanism of voting. It's a bad thing. A very bad thing and I'm very sad people are not more outraged about this.
- nv-vn 8y agoI hear this all the time but I don't understand what hoarding means in this context. Surely you're not implying that the majority of any billionaire's wealth is just cash under their mattress? I'm fairly sure that most of any given billionaire's wealth is invested, often in equities or bonds. In that sense, they are letting others borrow their money and funding economic development. Same goes for money sitting in a bank that gets loaned out.
- sokoloff 8y ago
- visarga 8y agoDon't be evil (to your shareholders, of course, not the public at large, Google is still a corporation after all).
- stevehawk 8y agoThey officially dropped "Don't be evil" a long time ago. http://time.com/4060575/alphabet-google-dont-be-evil/ http://time.com/4060575/alphabet-google-dont-be-evil/
- nbar1 8y agoIt was never dropped, it is still in Google's Code of Conduct. It's not, however, included in Alphabets. https://abc.xyz/investor/other/google-code-of-conduct/ https://abc.xyz/investor/other/google-code-of-conduct/
- MrZongle2 8y agoWhich pretty much means that they are empty words. If your master has no such Code of Conduct, then you have no such Code of Conduct when push comes to shove.
- Lio 8y ago"Don't be evil" was always meaningless corporate spiel. It's like "we value your privacy" or "all natural ingredients", it means nothing because you can define the terms anyway you like. Defining meaning is really hard. That's why English Common Law relies on precedence to fix details. "Codes of Conduct", mission statements and advertising are all just meaningless fluff because they are open to interpretation.
- yueq 8y agoMy tax haven is RothIRA.
- nbar1 8y agoThis is just how business works at that level. Don't like it? Me either, but Google is still playing by the rules.
- sudden 8y agoThey are certainly playing by government rules. People who arent happy with this should complain about and to governments. and not to corporations.
- noitsnot 8y agoThe amount of lobbying $ by Google alone leads me to really question whether anyone in Washington even rarely considers people complaining.
- ionised 8y agoSo then we change the rules.
- manigandham 8y agoThis is legal. Any issues should be taken up with the political and tax system that allows it. If you blame the company for doing this then I expect that you also make 0 deductions on your personal taxes and pay as much as possible.
- sremani 8y agoYou cannot replace ethical with legal. We all understand its legal. But to post on a forum criticizing this is not a permissible action?, but some how supposed to bring the political class to change things...
- solarkraft 8y agoThe legal system should work to make ethical things legal and unethical things illegal. This is legal. I can't fault them ethically for taking advantage.
- sremani 8y agoRailroading people was legal too. So were many other heinous things. That should not stop people from expressing their distaste for certain "legal" practices. What are we doing here, other than sharing opinions and arguments?
- solarkraft 8y ago> Railroading people was legal too And it shouldn't have been.
- bzbarsky 8y ago> The legal system should work to make ethical things legal and unethical things illegal. As a blanket statement, not it should not. As a counterexample, consider that the whole purpose of the US First Amendment as regards speech is that it should not be illegal to speak, even if others don't like your speech (including because they think it's unethical). As another counterexample, the war on drugs and alcohol prohibition are examples, in the US, of people trying to make unethical things illegal. The latter is widely accepted as a failure. I'm pretty sure that eventually the former will be too. In general, trying to equate "I disapprove of X" and "X should be illegal" is a really dangerous tendency that comes and goes. It seem to be on the rise recently, unfortunately, at least in the US...
- chuckgreenman 8y ago> The tax strategy, known as the “Double Irish, Dutch Sandwich”, is legal Hey, at least it's got a fun name. I can't imagine anyone is too surprised by this. Personally I'm happy to pay my tax burden. I grew up in America, went to public schools and benefited from public services. Corporate tax evasion like this seems like fixation on a local maxima. There's no way to account for the return on your mandatory tax investment, but their is a return and it's important for everyone.
- aportnoy 8y agoThe singular of maxima is maximum.
- justincormack 8y agoIt was invented by Apple originally.
- wongarsu 8y agoTaxes are very similar to the Prisoner's Dilemma: for any individual it pays of to dodge taxes and hope everyone else pays, but when nobody pays everyone is much worse off than when everyone pays. In theory this is solved by government action to make legal schemes illegal and prosecute anyone using illegal tax avoidance schemes. In practice lobbying against this is often cheaper than paying, so you end up with giant loopholes and defunded tax collection agencies. At least this hole is getting closed, but that's a minor victory in the grand scheme of things
- fixermark 8y agoAnd most "tax avoidance strategies" (this one included) take advantage of the lack of one world government, and therefore lack of one global legal framework for "fairness" in taxation. So countries compete for business by offering different tax incentives, and companies move to find a balance between retaining as much money as they can and as much of the other things they need (like competent employees, which come from specific countries) as they can. The problem isn't that these strategies are unfair; the problem is that authorities can't agree on a uniform concept of "fair" because it's in their best interest to get the most business in their territory. Prisoner's Dilemma again, in the opposite direction.
- stevehawk 8y agoIntentionally trying to spur discussion/debate on this because I would like to learn some counter points. I personally don't believe in corporate taxes. I can't imagine that any reasonably sized corporation would voluntarily forego effort to lower their tax burden considering the relatively low cost of a few accountants / accounting software. Because of that, I prefer a system where only individuals pay taxes. Now, skipping the fact that my suggestion requires most countries to rethink their individual/person tax code regarding income, property, etc and speaking in a largely hypothetical sense - would abandoning corporate taxes for personal taxes not be easier to ensure that money gets back to the government? As a person it's much harder for me to lower my "profits" in order to dodge taxes. But as a company I can make myself 'break even' or just below it pretty easily. I'd like to hear counter points to this because normally when I ask my friends the responses I get are more along the lines of "corporations are evil" more than "could it even work economically".
- lkschubert8 8y agoWhy would a person voluntarily forego effort to lower their tax burden? People evade personal taxes all the time.
- smnrchrds 8y agoLack of resources. If a tax reduction scheme costs 100 million dollars to set up, how many individuals would be able to use it? How many corporations?
- lkschubert8 8y agoCouldn't this then lead to a net income gap around that point? Or people pooling resources to form tax evasion groups?
- qroshan 8y ago+1 to eliminate corporate taxes entirely. It's incredibly stupid to tax entities that creates jobs, products and services. Taxes only create unnecessary friction and strange side effects. +1 to only have taxes at the individual level. Also, make tax a quadratic function instead of step function. Step function always leads to stupid / shady behaviors around the step points. 1. People should be motivated to work and rewarded for that. 2. Corporations should be motivated to provide goods and services. 3. Luck should be normalized
- solarkraft 8y agoI would expect the HN crowd especially to see the economy as a technical system. A fluid pipe line, perhaps. There are no ethics. Expect companies to do everything there allowed to. Disallow things you don't want them to do. It's this easy.
- Nasrudith 8y agoIf people had absolutely no agency and the companies incapable of influencing the regulations maybe. It is far more complex including game theory and recognizing prisoner's dilemma in action.
- happytoexplain 8y agoThe system you've described is massive, complex, subtle, and slow moving at the scale of the United States. Why do you think it's easy? Additionally, you seem to be implying that its being easy would somehow invalidate any criticism of any action taken within the bounds of legality. Can you elaborate?
- fixermark 8y agoBeyond the United States---these "tax evasion schemes" exist at the boundaries of international law. That's why they continue to survive despite lack of popularity among citizens---no nation wants to blink and close the loopholes, risking the multinational companies will pull up stakes and take their jobs and tax base to the "competition" (in this case, other nations).
- happytoexplain 8y agoAgreed. I wish we could somehow all work together to fix these things. And as a bonus, if corporations actually paid taxes in a more straightforward way, there would be less confusion and deception in political arguments about corporate tax rates.
- simplify 8y agoThis is called the Freidman Doctrine [1], and didn't exist until 1970. Before this stupid idea got popular, companies were actually concerned with how their actions impacted society. They weren't the souless profit-seeking machines you see today. [1] https://en.wikipedia.org/wiki/Friedman_doctrine https://en.wikipedia.org/wiki/Friedman_doctrine
- deleted 8y ago[deleted]
- tonfa 8y agoMy understanding is that since 2018, tax deferral is no longer possible and all the offshore profit of US corporation has since been taxed. Was that wrong? Also my understanding is that even before, the income moved to tax haven was still subject to US corporate tax, though companies were able to defer taxation until it was repatriated. https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_States#Tax_deferral https://en.wikipedia.org/wiki/Corporate_tax_in_the_United_St...
- fixermark 8y agoYou are not wrong. Given that the timeframe of this story is "in 2017" (even though the timestamp is recent), this is arguably old news.
- thelasthuman 8y agoCapital is free to move where it gets the most benefit, why aren't people this free as well?
- clairity 8y agothis is an underappreciated point. to make markets more free and efficient, labor should have the same freedoms as capital. otherwise capital has an unfair advantage (on top of all the existing information asymmetries).
- gammateam 8y ago> as part of an arrangement that allows it to reduce its foreign tax bill What this article and most of the discussion misses is that many of these tax havens are just better for business in ways that have nothing to do with taxes As the article alluded to: PART of an arrangement You have a catalogue of Cantonal systems, Confederacies, Federations where you can incorporate at the country level or an obscure state’s level (the US has no way to incorporate at the federal level), Segregated Portfolio Companies decades before similar entities were offered in more respected jurisdictions, useful Trust laws with no supranational government undermining them, useful information protection laws with no supranational government undermining them, and thats before we even touch on banking and brokerage services and free trade agreements The ability to offer these without levying a lazy passive tax for the privilege or “protection” is just icing on the cake
- nogbit 8y agoThe floor is lava, if you touch it you die. No it's not. It is, because I say it is and that's the game we are playing. OK, I'll play. .... Here's this 3000 page book, it says you own me 30% of what you just made. Really, let me read it. No, it says I owe you nothing. Really, OK, I suppose it does.
- SovietDissident 8y agoThe criticism here is that google's leaders and employees have explicitly advocated on behalf of and contributed to leftist causes, which promote the view that taxation should be greatly increased to decrease inequality, pay for government programs, or myriad other reasons. When Trump was elected, they had company-wide meetings concerning the sad state of the country, where melancholy leftists could vent their unhappiness (no such reaction greeted Obama's election). James Damore was harassed and eventually fired when he accepted the (fake) invitation to challenge "Social Justice" orthodoxy concerning gender. They didn't address his evidence, but rather went after his livelihood. My point being: they are one of the richest companies in the world, committed to a leftist worldview. The fact that they do everything they can to funnel money away from the poor, downtrodden, socioeconomically-disadvantaged, marginalized, etc., which they so loudly proclaim "need our help!"---the word hypocrisy doesn't even cut it.
- TulliusCicero 8y agoThere's absolutely nothing hypocritical about it. The progressive viewpoint is that taxes should be higher, not that people should just be willingly donating way more money to the government.
- bassman9000 8y agoThis is not a will issue. It's not that against their will they're taxed. It's that they've successfully managed not to pay, contravening the supposed stance of the company. Thus the hipocrisy. https://youtu.be/vayYdTU0FiA https://youtu.be/vayYdTU0FiA
- SovietDissident 8y agoRight, taxes should be higher on everyone else.