7 ms·

This is wrong thinking. Those loopholes are there because Google pays(lobbies) for them to be there. As far as I know, they've paid more in lobbying last year

by fear91 13y ago

This is wrong thinking. Those loopholes are there because Google pays(lobbies) for them to be there. As far as I know, they've paid more in lobbying last year than Microsoft, Apple and Facebook combined. Those loopholes will never be closed, Google and the like will make sure of that.

goostavos 13y ago
I still see the root problem being the government. Kill the ability for corporations to spend millions of dollars buying votes and the incentive for keeping the loop holes open would surely close. I don't think it is "wrong thinking" on the parent comment's part not to blame the corporation for doing what it can to profit. Hell, if I could find a legal tax loophole I certainly would take it, too.
- yapcguy 13y ago
  Loopholes might exist, but it doesn't mean you have to use them. Larry Page and Sergey Brin wanted Google to be different, but all they've done is create yet another giant corporation. On many matters Larry Page and Sergey Brin have had opportunity to take the moral high ground, but they have failed.
  - tomarr 13y ago
    I don't agree, because when you start dealing with regulations you see that 'loophole' as a term is often bandied around for minor things. Some may even be the intention of the regulation.
  - theorique 13y ago
    Loopholes might exist, but it doesn't mean you have to use them. Why would I want you as a CEO of a company I invest in if you're not doing everything legal to raise my stock price / return money to me as dividends?
    - varelse 13y ago
      Ding ding ding! You're doomed the minute you go public... In this instance, Google was given no choice. http://utterlyboring.com/archives/2004/04/19/google_may_be_forced_to_go_public.php http://utterlyboring.com/archives/2004/04/19/google_may_be_f...
  - talmand 13y ago
    Define "loophole". Because your definition seems to be taking advantage of something in a law, miswording or mistake, in a negative way, or even illegal, to avoid paying taxes that are rightfully due. I define it as following the law as written to lower your tax burdens. You imply that there's something inherently wrong with using "loopholes". I say there's something inherently wrong not using them, since it is the law. You may attempt to make this about moral high ground and doing what's right, but that's your definition of the situation and you are welcome to your opinion. But the law says otherwise. Especially since the company is basically legally required to use such methods to reduce their tax burdens, because otherwise they're likely to be sued by share holders or to whomever they are beholden to.
    - yapcguy 13y ago
      Multi-national corporations are playing a game of arbitrage with national tax laws. If it were true that a corporation is legally obligated to reduce its tax burden... then why isn't every shareholder in America suing the company for not moving the headquarters to Dubai where corporation tax is ZERO percent?
      - bhahn 13y ago
        > If it were true that a corporation is legally obligated to reduce its tax burden I'm pretty sure the parent meant within reason. Moving a $300b tech company's headquarters from the heart of SV to a location halfway around the world is not reasonable.
  - diarmuidie 13y ago
    What Google is doing is not illegal (immoral maybe). They have an obligation to their shareholder to maximise their profits through all legal means. If they were to turn around tomorrow and announce that they will no longer use the "Dutch Sandwich" and profit falls as a result do you think the shareholders would be happy?
    - yapcguy 13y ago
      Here we go again, the same old corporate mantra trotted out once more, about maximizing shareholder value, to excuse a company's unethical behaviour. So why doesn't Google and every other company move to Dubai where corporation tax is zero percent? Why aren't shareholders demanding the company move to the lowest tax jurisdictions in the world?
      - gaadd33 13y ago
        Because optimizing taxation isn't the only aspect to running Google efficiently? I thought that would be obvious.
  - vdaniuk 13y ago
    Please, come on. If only Google stops using tax optimization havens, Apple and Microsoft will get an edge simply because profits of main competitor decreased. The different guy gets the stick. This is exactly like DRM for digital media, think about that. I am quite OK with Google or any other tech corp using these and other tax optimization techiniques. Disclaimer: I am a former Googler in a third world country
- rayiner 13y ago
  What "loop hole" exactly are we talking about? Run down to your local university and audit a class in Federal Income Tax. It's actually a pretty well thought-out system. There are "loop holes" (e.g. for oil and gas companies), but when it comes to taxing multi-nationals there are real theoretical challenges.
grinning 13y ago
I usually would refrain from ancknowleging clearly ignorant and trollish comments, but yours is too stupid to resist. First the laws in question that enable profit shifting for digital firms were enacted pre-internet (which means pre-Google by the way). As for your evidence-free assertion about lobbying, let's assume it's true, Google lobbies more than those corps combined, does that mean that these three you mention, who employ similar tax reduction techniques are proactivly lobbying to pay more taxes?! And are we to believe that these tech companies you mention are the only ones who "lobby" on tax issues or otherwise?! Again, your comment is idiotic.
- lubos 13y ago
  Perhaps accusing Google specifically is a bit stretched too far but it's true all cash-rich corporations including Google and Apple with billions tied up overseas are lobbying congress to be able to bring the cash back to USA without paying standard tax rate on it.
  - grinning 13y ago
    That is true, and there might be a decent argument for it (bringing the cash to invest in the US). But the comment I replied to was implying that Google lobbying alone was responsible for all that is wrong in the world, and even the valiant efforts of Apple, Microsoft, and Facebook couldn't stop it.
koalaman 13y ago
I'm pretty sure Google's lobbying is focused on issues such as Internet Regulation, Software patents, and antitrust. You'll need to provide some evidence that Google is lobbying for tax shelters.
- bsullivan01 13y ago
  I'm pretty sure Google's lobbying is focused on issues such as Internet Regulation, Software patents, and antitrust. You'll need to provide some evidence that Google is lobbying for tax shelters. So you're "pretty sure" but we need to provide evidence. I have some evidence: Google (along with others) saves BILLIONS a year by these tax schemes so you can bet your last dollar they lobby for them. Don't expect CNN commercials but extremely well funded industry groups, or lobbyists contacting already bought senators and congressmen. It's a return on investment that George Soros can't even dream about. If Google paid 5% tax, imagine what a 35% or even 10% rate would have done to their earnings. In light of this, you need to provide proof they don't lobby to keep these tax loopholes :-)
  - beambot 13y ago
    You've provided evidence of "motive", but failed to provide evidence of "crime". And you're accusing them of "crime".
    - bsullivan01 13y ago
      Please think before you write. Lobbying is legal, as it is the bread and butter of lawmakers. So I never accused them of anything illegal when it comes to tax loopholes.
      - res0nat0r 13y ago
        This is true, but I still don't see any evidence of actual money from Google being paid to lobbyists on behalf of protecting tax shelters.
        13y ago
ye 13y ago
So lobbying (aka legalized bribery) is the problem. I don't see how it's Google's fault.
- hackinthebochs 13y ago
  It's Google's fault for bribing on behalf of Google's benefit.
  - ye 13y ago
    It's legal. How is it a "fault"? The playing field should be level. If Google stops the lobbying, their competitors won't. The system is rotten, it's not Google's fault they have to use the faulty system or die.
    - hackinthebochs 13y ago
      Just because something is legal does not make it right. Those who would outsource their moral thinking to laws are a sorry lot.
      - graedus 13y ago
        Well, that's the thing with corporations. They might be run by people who otherwise have a moral compass, but a corporation's responsibility is abstracted and shared such that in many cases no one person feels a great amount of guilt for actions taken by the corporation. Moral qualms are often suppressed in the pursuit of increasing profits.
        alextingle 13y ago
        That's self-serving bullshit. A corporation is a collection of people. They share no less moral responsibility for their collective actions than would an individual.
        graedus 13y ago
gaadd33 13y ago
Pretty sure the loopholes predate Google by a long time. All it is is transfer pricing, something that multinationals have been doing since there have been multinationals.

by fear91 13y ago

goostavos 13y ago

I still see the root problem being the government. Kill the ability for corporations to spend millions of dollars buying votes and the incentive for keeping the loop holes open would surely close. I don't think it is "wrong thinking" on the parent comment's part not to blame the corporation for doing what it can to profit. Hell, if I could find a legal tax loophole I certainly would take it, too.

yapcguy 13y ago
Loopholes might exist, but it doesn't mean you have to use them. Larry Page and Sergey Brin wanted Google to be different, but all they've done is create yet another giant corporation. On many matters Larry Page and Sergey Brin have had opportunity to take the moral high ground, but they have failed.
- tomarr 13y ago
  I don't agree, because when you start dealing with regulations you see that 'loophole' as a term is often bandied around for minor things. Some may even be the intention of the regulation.
- theorique 13y ago
  Loopholes might exist, but it doesn't mean you have to use them. Why would I want you as a CEO of a company I invest in if you're not doing everything legal to raise my stock price / return money to me as dividends?
  - varelse 13y ago
    Ding ding ding! You're doomed the minute you go public... In this instance, Google was given no choice. http://utterlyboring.com/archives/2004/04/19/google_may_be_forced_to_go_public.php http://utterlyboring.com/archives/2004/04/19/google_may_be_f...
- talmand 13y ago
  Define "loophole". Because your definition seems to be taking advantage of something in a law, miswording or mistake, in a negative way, or even illegal, to avoid paying taxes that are rightfully due. I define it as following the law as written to lower your tax burdens. You imply that there's something inherently wrong with using "loopholes". I say there's something inherently wrong not using them, since it is the law. You may attempt to make this about moral high ground and doing what's right, but that's your definition of the situation and you are welcome to your opinion. But the law says otherwise. Especially since the company is basically legally required to use such methods to reduce their tax burdens, because otherwise they're likely to be sued by share holders or to whomever they are beholden to.
  - yapcguy 13y ago
    Multi-national corporations are playing a game of arbitrage with national tax laws. If it were true that a corporation is legally obligated to reduce its tax burden... then why isn't every shareholder in America suing the company for not moving the headquarters to Dubai where corporation tax is ZERO percent?
    - bhahn 13y ago
      > If it were true that a corporation is legally obligated to reduce its tax burden I'm pretty sure the parent meant within reason. Moving a $300b tech company's headquarters from the heart of SV to a location halfway around the world is not reasonable.
- diarmuidie 13y ago
  What Google is doing is not illegal (immoral maybe). They have an obligation to their shareholder to maximise their profits through all legal means. If they were to turn around tomorrow and announce that they will no longer use the "Dutch Sandwich" and profit falls as a result do you think the shareholders would be happy?
  - yapcguy 13y ago
    Here we go again, the same old corporate mantra trotted out once more, about maximizing shareholder value, to excuse a company's unethical behaviour. So why doesn't Google and every other company move to Dubai where corporation tax is zero percent? Why aren't shareholders demanding the company move to the lowest tax jurisdictions in the world?
    - gaadd33 13y ago
      Because optimizing taxation isn't the only aspect to running Google efficiently? I thought that would be obvious.
- vdaniuk 13y ago
  Please, come on. If only Google stops using tax optimization havens, Apple and Microsoft will get an edge simply because profits of main competitor decreased. The different guy gets the stick. This is exactly like DRM for digital media, think about that. I am quite OK with Google or any other tech corp using these and other tax optimization techiniques. Disclaimer: I am a former Googler in a third world country
rayiner 13y ago
What "loop hole" exactly are we talking about? Run down to your local university and audit a class in Federal Income Tax. It's actually a pretty well thought-out system. There are "loop holes" (e.g. for oil and gas companies), but when it comes to taxing multi-nationals there are real theoretical challenges.

grinning 13y ago

I usually would refrain from ancknowleging clearly ignorant and trollish comments, but yours is too stupid to resist. First the laws in question that enable profit shifting for digital firms were enacted pre-internet (which means pre-Google by the way). As for your evidence-free assertion about lobbying, let's assume it's true, Google lobbies more than those corps combined, does that mean that these three you mention, who employ similar tax reduction techniques are proactivly lobbying to pay more taxes?! And are we to believe that these tech companies you mention are the only ones who "lobby" on tax issues or otherwise?! Again, your comment is idiotic.

lubos 13y ago
Perhaps accusing Google specifically is a bit stretched too far but it's true all cash-rich corporations including Google and Apple with billions tied up overseas are lobbying congress to be able to bring the cash back to USA without paying standard tax rate on it.
- grinning 13y ago
  That is true, and there might be a decent argument for it (bringing the cash to invest in the US). But the comment I replied to was implying that Google lobbying alone was responsible for all that is wrong in the world, and even the valiant efforts of Apple, Microsoft, and Facebook couldn't stop it.

koalaman 13y ago

I'm pretty sure Google's lobbying is focused on issues such as Internet Regulation, Software patents, and antitrust. You'll need to provide some evidence that Google is lobbying for tax shelters.

bsullivan01 13y ago
I'm pretty sure Google's lobbying is focused on issues such as Internet Regulation, Software patents, and antitrust. You'll need to provide some evidence that Google is lobbying for tax shelters. So you're "pretty sure" but we need to provide evidence. I have some evidence: Google (along with others) saves BILLIONS a year by these tax schemes so you can bet your last dollar they lobby for them. Don't expect CNN commercials but extremely well funded industry groups, or lobbyists contacting already bought senators and congressmen. It's a return on investment that George Soros can't even dream about. If Google paid 5% tax, imagine what a 35% or even 10% rate would have done to their earnings. In light of this, you need to provide proof they don't lobby to keep these tax loopholes :-)
- beambot 13y ago
  You've provided evidence of "motive", but failed to provide evidence of "crime". And you're accusing them of "crime".
  - bsullivan01 13y ago
    Please think before you write. Lobbying is legal, as it is the bread and butter of lawmakers. So I never accused them of anything illegal when it comes to tax loopholes.
    - res0nat0r 13y ago
      This is true, but I still don't see any evidence of actual money from Google being paid to lobbyists on behalf of protecting tax shelters.
      - 13y ago

ye 13y ago

So lobbying (aka legalized bribery) is the problem. I don't see how it's Google's fault.

hackinthebochs 13y ago
It's Google's fault for bribing on behalf of Google's benefit.
- ye 13y ago
  It's legal. How is it a "fault"? The playing field should be level. If Google stops the lobbying, their competitors won't. The system is rotten, it's not Google's fault they have to use the faulty system or die.
  - hackinthebochs 13y ago
    Just because something is legal does not make it right. Those who would outsource their moral thinking to laws are a sorry lot.
    - graedus 13y ago
      Well, that's the thing with corporations. They might be run by people who otherwise have a moral compass, but a corporation's responsibility is abstracted and shared such that in many cases no one person feels a great amount of guilt for actions taken by the corporation. Moral qualms are often suppressed in the pursuit of increasing profits.
      - alextingle 13y ago
        That's self-serving bullshit. A corporation is a collection of people. They share no less moral responsibility for their collective actions than would an individual.
        graedus 13y ago

gaadd33 13y ago

Pretty sure the loopholes predate Google by a long time. All it is is transfer pricing, something that multinationals have been doing since there have been multinationals.