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If this is indeed for a tax dodge, what's funny is that the US Government helped fund Google. Or, more accurately, they funded the research into the seemingly e

If this is indeed for a tax dodge, what's funny is that the US Government helped fund Google. Or, more accurately, they funded the research into the seemingly esoteric problem that became Google; > In 1995, one of the first and most promising MDDS grants went to a computer-science research team at Stanford University with a decade-long history of working with NSF and DARPA grants. The primary objective of this grant was “query optimization of very complex queries that are described using the ‘query flocks’ approach.” A second grant—the DARPA-NSF grant most closely associated with Google’s origin—was part of a coordinated effort to build a massive digital library using the internet as its backbone. Both grants funded research by two graduate students who were making rapid advances in web-page ranking, as well as tracking (and making sense of) user queries: future Google cofounders Sergey Brin and Larry Page. > The research by Brin and Page under these grants became the heart of Google: people using search functions to find precisely what they wanted inside a very large data set. The intelligence community, however, saw a slightly different benefit in their research: Could the network be organized so efficiently that individual users could be uniquely identified and tracked? Not to mention In-Q-Tel's investment into one of their key products, Google Maps via Keyhole. And DARPA's Grand Challenge that led to the Stanley car that was acquired and scaled up to make Google's automated car division. Google has done an admirable job of taking Government sponsored R&D and maturing it into products. They deserve their success. But, in my opinion, the systemic lack of reinvestment into the pipeline that created them and their most successful products is equivalent to sawing off the branch that they're sitting on. The US Govt couldn't have invented the iPhone or Google's search engine, but they did fund the first Integrated Circuits, the first IC-based computer, the internet, GPS, discrete problems in computer science involving searching large amounts of data, display technologies, battery technologies, MEMS sensors etc etc.

bsanr2 6y ago
I went to the same high school as Sergey Brin, a little over a decade after he had and well after Google had become the de facto search standard. Didn't know until I was already in college. AFAIK he's never made an effort to reach out to them, grant resources, give a talk, anything. It's a majority-minority public school in a solidly middle class (like, actually middle class) suburb, so it's not like they're flush with funding. Whatever his relationship to it had been at the time, you'd think he'd find it within himself to give back a tiny bit from the exceptional fortune and life that he's built. The reality, though, was that a lot of us didn't even know who he was, even though all of the school computers had their homepages set to Google.com. I think that's emblematic of Google's regard to reinvestment. Even the products which made them so powerful in the first place they regularly abandon.
- znpy 6y ago
  Well he might just not have fond memories of that school.
  - MrZongle2 6y ago
    That's entirely possible. But one could argue that would be even more reason for him to step in and try and make it better.
    - Nasrudith 6y ago
      It could easily be throwing good money after bad - and he has moved on from it. It would be like giving money to an impoverished country with a blatantly corrupt government - it wouldn't do any good if they just waste it on say landscaping instead of say doing anything about bullying. On that note do you feel an obligation to donate even say $5 to your old high school decades later when you have no other connections to it like kids currently attending? I don't think that is a very common behavior or sentiment.
      - bsanr2 6y ago
        You should do your research. ERHS is highly-ranked, especially so for a public school that is not a full magnet (it has a magnet STEM program that makes up a portion of the student body but otherwise draws from the surrounding neighborhoods). It's quite strong academically, and several of its alumni have returned to give back to it. And, generally-speaking, it's customary for highly-successful Americans (and especially those that become public figures) to give back to their high school and college alma mater. It's a little disheartening that the immediate assumption is that "he might not have fond memories" or that "it could be throwing good money after bad." I assume that this is because the school was described as "majority-minority." ERHS students have their pick of desirable internships with the likes of NASA and the USDA, and regularly sends alumnae to Ivies and the Intel ISEF. It's not exactly an intellectually-stifling environment. We can't know what's going through Brin's mind, especially as he's never publicly discussed the subject, but we can certainly look at how his behavior compares to others, and I think HN's disregard for that in favor of a kneejerk negative reaction is shameful (if not unexpected).
roughly 6y ago
Mariana Mazzucato's book "The Entrepreneurial State" is a good read on the matter of public funding for innovation: https://www.indiebound.org/book/9781610396134 https://www.indiebound.org/book/9781610396134
- klaudius 6y ago
  This is very misleading. US government heavily taxes people and organizations and spends on certain projects. But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on. On top of that, US gov has all kinds of laws and regulations that make it difficult to do certain valuable things. For example, if companies in the same industry come together to do something valuable, they might break antitrust laws. Government might also make it prohibitively expensive to do something and then they step in to do it themselves - you see it with pharma research.
  - notahacker 6y ago
    How many people would have used their tax cuts to fund a wide area packet-switching network or space program?
    - xyzzyz 6y ago
      There are tons of people and companies currently investing in these things. The venture capital industry in the US is huge, and in fact you’re writing this on a website run by one of its representatives. The US Government has surely invested in some beneficial research, but so did the private sector.
      - Kbelicius 6y ago
        > There are tons of people and companies currently investing in these things. Yes, there are tons of people and companies currently investing in these things because earlier government investment proved those things possible. It would be irrational for a private company to invest time and money in something with knightian uncertainty. The private sector is good with scale and incremental improvements. Quite bad with fundamental research.
eli_gottlieb 6y ago
The question, then, is why we bothered effectively handing Page and Brin free startup funds without claiming any IP or equity stake in the resulting products, then act surprised when they don't want to pay taxes on the money they made.
- Nasrudith 6y ago
  Because that would defeat the point of the basic research - for it to be used and it isn't exclusive to the two even though they were the most signicant users. Governments have already have already found outsourcing their manufacturing to contractors had superior results to doing so in house. I think nuclear weapons are about the only thing which isn't privatized. The government already has an effective equity share anyway over everybody - it is called taxes. Money being mobile has other economic benefits but comes at the cost of allowing more fringe case shenanigans.
- colejohnson66 6y ago
  Isn’t the US government not allowed to own any IP? I’m pretty sure the Constitution says so. That’s why JPL is a thing; so NASA can pay JPL to do research (giving JPL, a company, the IP).
  - raspberry_pi 6y ago
    Seems like straight up theft to me. Why is that not owned by the public?
    - colejohnson66 6y ago
      Because the Constitution says so. It’s as simple as that. If we want that changed, we’d need a Constitutional amendment.
    - samatman 6y ago
      It is partially owned by the public. All labor is partially owned by the public. Private IP makes corporations and people a lot of money. That money is taxed. That's how the government gets its share. The public-private partnership allows for researchers to claim most of the value of their labor, while the government can encourage areas of research which are in the national interest through grant funding. How much tax money do you think has derived from the early research on integrated circuits? A lot, right? Proposing that the government can simply confiscate intellectual property if they fund it, would just result in a world where government funding is unattractive. This would give more power to corporations and billionaires to direct the course of research into their own private interests. That doesn't strike me as a win.
pembrook 6y ago
This is not a tax dodge. There is no way to dodge taxes as a US citizen by moving abroad, the US is the only country in the world with a real global taxation system. EDIT further information I posted below: The US has the unique position of being able to actually enforce this due to the fact the USD is the reserve currency of the world and every country needs to stay on the good side of the US Treasury to transact in the global economy. FATCA requires all foreign financial institutions to report on any US citizen assets. In fact, the laws are so strict, they make living abroad as an honest middle-class expat a total nightmare. I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens. They cannot save in foreign banks and they cannot invest either due to the US penalizing foreign Mutual fund/ETF purchases by private citizens.
- hawk_ 6y ago
  Uhm acquiring another citizenship to give up American can totally be a tax dodge. The key is giving up the American one.
  - Kranar 6y ago
    Sort of. Giving up U.S. citizenship comes with an expatriation tax [0] on all assets including foreign assets. The purpose of this tax is to deter people from renouncing citizenship and then selling off assets while avoiding paying capital gains on them. So expatriation can protect you from paying taxes on capital gains from future assets, but it doesn't do much to protect you from capital gains on assets you currently own. [0] https://www.irs.gov/individuals/international-taxpayers/expatriation-tax https://www.irs.gov/individuals/international-taxpayers/expa...
- 1over137 6y ago
  His step 2 could then be to renounce his US citizenship.
  - garmaine 6y ago
    In which case you pay an "exit tax" equivalent to the tax hit from liquidating all your assets, e.g. capgains on all held stock. Renouncing citizenship never works as a tax dodge, unless you have some reason to expect large future gains in your assets that aren't reflected in their current market prices.
johannes1234321 6y ago
Mr. Schmidt's career is tied even more to Stanford: Prior to Google he was working at SUN Microsystems. SUN stands for Stanford University Network. And hey Google made money due to Internet being there. Who created the internet? Darpa and universities.
ehsankia 6y ago
Isn't it a bit of a stretch to connect funding that eventually indirectly lead to Google, with someone who was the CEO for 10 years (not even since inception)? Google itself is still an American company paying taxes, Schmidt hasn't been the CEO of Google for a decade, I don't see why that's related. By that logic you could also say that the US Gov also helped pay for his high school or even kindergarten maybe. I'm not really taking a side here, but it seems like your argument is a bit too broad.
ransom1538 6y ago
" If this is indeed for a tax dodge, what's funny is that the US Government helped fund Google. Or, more accurately, they funded the research into the seemingly esoteric problem that became Google;" Boom. We have someone that knows what they are saying. Yes. It is a tax covered shell. Wonder why your $23.29 check from google for 1.2 million impressions is coming from Ireland?
- beagle3 6y ago
  These structures are available to corporations, not to people.
1vuio0pswjnm7 6y ago
I could not find the quoted portion of this comment in the article.
biscotti 6y ago
This is not a tax dodge. My guess is he's recognised that Trump is not going to concede to this coup attempt and is worried about the consequences. It is interesting to me that Cyprus does not extradite. Here is the conversation he and Jared Cohen had with Julian Assange: https://wikileaks.org/Transcript-Meeting-Assange-Schmidt https://wikileaks.org/Transcript-Meeting-Assange-Schmidt
- colejohnson66 6y ago
  Coup? The voters decided for Biden. There’s no “coup” happening.
  - biscotti 6y ago
    The election hasn't been decided FYI and you are woefully uninformed. Lookup Dominion, Scorecard and Hammer or just search the internet for "2020 election fraud". Biden is illegal, illegitimate and will not be the President of the United States. If you want to understand why one indicator available to you is to look at network viewership. From Friday (Fox is usually top): MSNBC - 2.9m CNN - 4m Fox - 2.2m Fox has also lost 50k likes from its facebook feed - it seems NewsmaxTV will be the big winner after this. Part of me likes to think Murdoch just wanted to move Fox to the center to sell it but given who he is him and Lochlann probably just thought they could play kingmaker again and get away with it. Comcast is also hurting - just look at the ratio under this: https://twitter.com/SkyNews/status/1325918816644304896?s=20 https://twitter.com/SkyNews/status/1325918816644304896?s=20. There are 131 affadivits in Detroit and RealClearPolitics just pulled their PA call. If you put money on Biden I would cash out NOW! Personally what I want to know is whether Podesta will end up spilling the beans on Madeleine McCann after this?
    - BrawnLongHaul 6y ago
      Here to see how fast this gets flagged and/or downvoted >:)
      - biscotti 6y ago

bsanr2 6y ago

I went to the same high school as Sergey Brin, a little over a decade after he had and well after Google had become the de facto search standard. Didn't know until I was already in college. AFAIK he's never made an effort to reach out to them, grant resources, give a talk, anything. It's a majority-minority public school in a solidly middle class (like, actually middle class) suburb, so it's not like they're flush with funding. Whatever his relationship to it had been at the time, you'd think he'd find it within himself to give back a tiny bit from the exceptional fortune and life that he's built. The reality, though, was that a lot of us didn't even know who he was, even though all of the school computers had their homepages set to Google.com. I think that's emblematic of Google's regard to reinvestment. Even the products which made them so powerful in the first place they regularly abandon.

znpy 6y ago
Well he might just not have fond memories of that school.
- MrZongle2 6y ago
  That's entirely possible. But one could argue that would be even more reason for him to step in and try and make it better.
  - Nasrudith 6y ago
    It could easily be throwing good money after bad - and he has moved on from it. It would be like giving money to an impoverished country with a blatantly corrupt government - it wouldn't do any good if they just waste it on say landscaping instead of say doing anything about bullying. On that note do you feel an obligation to donate even say $5 to your old high school decades later when you have no other connections to it like kids currently attending? I don't think that is a very common behavior or sentiment.
    - bsanr2 6y ago
      You should do your research. ERHS is highly-ranked, especially so for a public school that is not a full magnet (it has a magnet STEM program that makes up a portion of the student body but otherwise draws from the surrounding neighborhoods). It's quite strong academically, and several of its alumni have returned to give back to it. And, generally-speaking, it's customary for highly-successful Americans (and especially those that become public figures) to give back to their high school and college alma mater. It's a little disheartening that the immediate assumption is that "he might not have fond memories" or that "it could be throwing good money after bad." I assume that this is because the school was described as "majority-minority." ERHS students have their pick of desirable internships with the likes of NASA and the USDA, and regularly sends alumnae to Ivies and the Intel ISEF. It's not exactly an intellectually-stifling environment. We can't know what's going through Brin's mind, especially as he's never publicly discussed the subject, but we can certainly look at how his behavior compares to others, and I think HN's disregard for that in favor of a kneejerk negative reaction is shameful (if not unexpected).

roughly 6y ago

Mariana Mazzucato's book "The Entrepreneurial State" is a good read on the matter of public funding for innovation: https://www.indiebound.org/book/9781610396134 https://www.indiebound.org/book/9781610396134

klaudius 6y ago
This is very misleading. US government heavily taxes people and organizations and spends on certain projects. But if people had more resources left to themselves, they could spend some of it on the same projects US gov spends it on. On top of that, US gov has all kinds of laws and regulations that make it difficult to do certain valuable things. For example, if companies in the same industry come together to do something valuable, they might break antitrust laws. Government might also make it prohibitively expensive to do something and then they step in to do it themselves - you see it with pharma research.
- notahacker 6y ago
  How many people would have used their tax cuts to fund a wide area packet-switching network or space program?
  - xyzzyz 6y ago
    There are tons of people and companies currently investing in these things. The venture capital industry in the US is huge, and in fact you’re writing this on a website run by one of its representatives. The US Government has surely invested in some beneficial research, but so did the private sector.
    - Kbelicius 6y ago
      > There are tons of people and companies currently investing in these things. Yes, there are tons of people and companies currently investing in these things because earlier government investment proved those things possible. It would be irrational for a private company to invest time and money in something with knightian uncertainty. The private sector is good with scale and incremental improvements. Quite bad with fundamental research.

eli_gottlieb 6y ago

The question, then, is why we bothered effectively handing Page and Brin free startup funds without claiming any IP or equity stake in the resulting products, then act surprised when they don't want to pay taxes on the money they made.

Nasrudith 6y ago
Because that would defeat the point of the basic research - for it to be used and it isn't exclusive to the two even though they were the most signicant users. Governments have already have already found outsourcing their manufacturing to contractors had superior results to doing so in house. I think nuclear weapons are about the only thing which isn't privatized. The government already has an effective equity share anyway over everybody - it is called taxes. Money being mobile has other economic benefits but comes at the cost of allowing more fringe case shenanigans.
colejohnson66 6y ago
Isn’t the US government not allowed to own any IP? I’m pretty sure the Constitution says so. That’s why JPL is a thing; so NASA can pay JPL to do research (giving JPL, a company, the IP).
- raspberry_pi 6y ago
  Seems like straight up theft to me. Why is that not owned by the public?
  - colejohnson66 6y ago
    Because the Constitution says so. It’s as simple as that. If we want that changed, we’d need a Constitutional amendment.
  - samatman 6y ago
    It is partially owned by the public. All labor is partially owned by the public. Private IP makes corporations and people a lot of money. That money is taxed. That's how the government gets its share. The public-private partnership allows for researchers to claim most of the value of their labor, while the government can encourage areas of research which are in the national interest through grant funding. How much tax money do you think has derived from the early research on integrated circuits? A lot, right? Proposing that the government can simply confiscate intellectual property if they fund it, would just result in a world where government funding is unattractive. This would give more power to corporations and billionaires to direct the course of research into their own private interests. That doesn't strike me as a win.

pembrook 6y ago

This is not a tax dodge. There is no way to dodge taxes as a US citizen by moving abroad, the US is the only country in the world with a real global taxation system. EDIT further information I posted below: The US has the unique position of being able to actually enforce this due to the fact the USD is the reserve currency of the world and every country needs to stay on the good side of the US Treasury to transact in the global economy. FATCA requires all foreign financial institutions to report on any US citizen assets. In fact, the laws are so strict, they make living abroad as an honest middle-class expat a total nightmare. I have friends who cannot find a single bank in their country that will work with them because of the reporting requirements of working with US citizens. They cannot save in foreign banks and they cannot invest either due to the US penalizing foreign Mutual fund/ETF purchases by private citizens.

hawk_ 6y ago
Uhm acquiring another citizenship to give up American can totally be a tax dodge. The key is giving up the American one.
- Kranar 6y ago
  Sort of. Giving up U.S. citizenship comes with an expatriation tax [0] on all assets including foreign assets. The purpose of this tax is to deter people from renouncing citizenship and then selling off assets while avoiding paying capital gains on them. So expatriation can protect you from paying taxes on capital gains from future assets, but it doesn't do much to protect you from capital gains on assets you currently own. [0] https://www.irs.gov/individuals/international-taxpayers/expatriation-tax https://www.irs.gov/individuals/international-taxpayers/expa...
1over137 6y ago
His step 2 could then be to renounce his US citizenship.
- garmaine 6y ago
  In which case you pay an "exit tax" equivalent to the tax hit from liquidating all your assets, e.g. capgains on all held stock. Renouncing citizenship never works as a tax dodge, unless you have some reason to expect large future gains in your assets that aren't reflected in their current market prices.

johannes1234321 6y ago

Mr. Schmidt's career is tied even more to Stanford: Prior to Google he was working at SUN Microsystems. SUN stands for Stanford University Network. And hey Google made money due to Internet being there. Who created the internet? Darpa and universities.

ehsankia 6y ago

Isn't it a bit of a stretch to connect funding that eventually indirectly lead to Google, with someone who was the CEO for 10 years (not even since inception)? Google itself is still an American company paying taxes, Schmidt hasn't been the CEO of Google for a decade, I don't see why that's related. By that logic you could also say that the US Gov also helped pay for his high school or even kindergarten maybe. I'm not really taking a side here, but it seems like your argument is a bit too broad.

ransom1538 6y ago

" If this is indeed for a tax dodge, what's funny is that the US Government helped fund Google. Or, more accurately, they funded the research into the seemingly esoteric problem that became Google;" Boom. We have someone that knows what they are saying. Yes. It is a tax covered shell. Wonder why your $23.29 check from google for 1.2 million impressions is coming from Ireland?

beagle3 6y ago
These structures are available to corporations, not to people.

1vuio0pswjnm7 6y ago

I could not find the quoted portion of this comment in the article.

biscotti 6y ago

This is not a tax dodge. My guess is he's recognised that Trump is not going to concede to this coup attempt and is worried about the consequences. It is interesting to me that Cyprus does not extradite. Here is the conversation he and Jared Cohen had with Julian Assange: https://wikileaks.org/Transcript-Meeting-Assange-Schmidt https://wikileaks.org/Transcript-Meeting-Assange-Schmidt

colejohnson66 6y ago
Coup? The voters decided for Biden. There’s no “coup” happening.
- biscotti 6y ago
  The election hasn't been decided FYI and you are woefully uninformed. Lookup Dominion, Scorecard and Hammer or just search the internet for "2020 election fraud". Biden is illegal, illegitimate and will not be the President of the United States. If you want to understand why one indicator available to you is to look at network viewership. From Friday (Fox is usually top): MSNBC - 2.9m CNN - 4m Fox - 2.2m Fox has also lost 50k likes from its facebook feed - it seems NewsmaxTV will be the big winner after this. Part of me likes to think Murdoch just wanted to move Fox to the center to sell it but given who he is him and Lochlann probably just thought they could play kingmaker again and get away with it. Comcast is also hurting - just look at the ratio under this: https://twitter.com/SkyNews/status/1325918816644304896?s=20 https://twitter.com/SkyNews/status/1325918816644304896?s=20. There are 131 affadivits in Detroit and RealClearPolitics just pulled their PA call. If you put money on Biden I would cash out NOW! Personally what I want to know is whether Podesta will end up spilling the beans on Madeleine McCann after this?
  - BrawnLongHaul 6y ago
    Here to see how fast this gets flagged and/or downvoted >:)
    - biscotti 6y ago