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How Google's Refusal To Pay US Taxes Means US Taxpayers Fund Its Innovation, Resulting In A Benefit Of $100/Share
We first discussed the topic of cash repatriation (or lack thereof) about a month ago. Since then, more and more seem to be waking up that of the over $1 trillion in cash on the corporate "balance sheet" not only is most of it unusable domestically (without being taxed at the marginal tax rate upon repatriation), but that companies are effectively boosting earnings by not paying taxes (money which should be going to the US coffers to pay for the same corporate friendly policies enacted by the government, that is currently being funded almost exclusively by individual taxpayers, and the Fed of course). And massively so. An expose in Bloomberg details how courtesy of various, perfectly legal, tax avoidance schemes, Google's effective tax rate is 2.4%, which has resulted in $60 billion in less taxes paid to the US, and which has boosted the company's stock price by a whopping $100/share!
Per Jesse Drucker:
Google’s income shifting -- involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” -- helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.
“It’s remarkable that Google’s effective rate is that low,” said Martin A. Sullivan, a tax economist who formerly worked for the U.S. Treasury Department. “We know this company operates throughout the world mostly in high-tax countries where the average corporate rate is well over 20 percent.”
How does Google go about legally sheltering essentially all of its net income from the IRS?
Google, the owner of the world’s most popular search engine, uses a strategy that has gained favor among such companies as Facebook Inc. and Microsoft Corp. The method takes advantage of Irish tax law to legally shuttle profits into and out of subsidiaries there, largely escaping the country’s 12.5 percent income tax. (See an interactive graphic on Google’s tax strategy here.)
The earnings wind up in island havens that levy no corporate income taxes at all. Companies that use the Double Irish arrangement avoid taxes at home and abroad as the U.S. government struggles to close a projected $1.4 trillion budget gap and European Union countries face a collective projected deficit of 868 billion euros.
As a strategy for limiting taxes, the Double Irish method is “very common at the moment, particularly with companies with intellectual property,” said Richard Murphy, director of U.K.- based Tax Research LLP. Murphy, who has worked on similar transactions, estimates that hundreds of multinationals use some version of the method.
The high corporate tax rate in the U.S. motivates companies to move activities and related income to lower-tax countries, said Irving H. Plotkin, a senior managing director at PricewaterhouseCoopers LLP’s national tax practice in Boston. He delivered a presentation in Washington, D.C. this year titled “Transfer Pricing is Not a Four Letter Word.”
And with the hypocricy of such ethical stalwarths as Warren Buffett now having been exposed for all to see, it is only time that the company's which "does no evil" is exposed for its own "do as I say, not as I do" practices:
Google’s transfer pricing contributed to international tax benefits that boosted its earnings by 26 percent last year, company filings show. Based on a rough analysis, if the company paid taxes at the 35 percent rate on all its earnings, its share price might be reduced by about $100, said Clayton Moran, an analyst at Benchmark Co. in Boca Raton, Florida. He recommends buying Google stock, which closed yesterday at $607.98.
The company, which tells employees “don’t be evil” in its code of conduct, has cut its effective tax rate abroad more than its peers in the technology sector: Apple Inc., the maker of the iPhone; Microsoft, the largest software company; International Business Machines Corp., the biggest computer-services provider; and Oracle Corp., the second-biggest software company. Those companies reported rates that ranged between 4.5 percent and 25.8 percent for 2007 through 2009.
Google is “flying a banner of doing no evil, and then they’re perpetrating evil under our noses,” said Abraham J. Briloff, a professor emeritus of accounting at Baruch College in New York who has examined Google’s tax disclosures.
“Who is it that paid for the underlying concept on which they built these billions of dollars of revenues?” Briloff said. “It was paid for by the United States citizenry.”
Of course, when US citizens, especially those who have never been in Congress, decide to pursue various tax shelter loophole, the result usually ends up being jail.
And here is where the tax repatriation issue comes in:
Technically, multinationals that shift profits overseas are
deferring U.S. income taxes, not avoiding them permanently. The
deferral lasts until companies decide to bring the earnings back
to the U.S. In practice, they rarely repatriate significant
portions, thus avoiding the taxes indefinitely, said Michelle
Hanlon, an accounting professor at the Massachusetts Institute
of Technology.
Which explains why as we noted a few days ago, the vast corporate lobby is already begging for a huge tax amnesty so it can repatriate its massive cash hoard from abroad on promises it will be used for what it should have been used in the first place. Surely, we can believe these honest tax evaders... But at least we can finally put the topic of the "vast cash on the sidelines" lie to rest.
Mure more here.
And here is a interactive graphic representation of Google's tax evasion (after the jump):
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Half the Fortune 500 DO NOT PAY US Income Taxes
Nothing to see or collect here... Argue about personal tax rates some more and move along...
Brought to you buy the best government oligarchy and corporate money can buy...
Thanks for exposing this, TD. This is how they can invest so much in offshore manufacturing and service centres ... with a tax break from the foreign governments for generating employment, to add cream on the offshore cake!
PS. I'm opposed to all taxes ... and pay none myself. Taxation is theft!
But if anyone wants manufacturing and technical services jobs back onshore, then they should either drop corporate taxes to less than those of a typical tax haven -- or get so-called American companies benefitting from government contracts, subsidies and protection to pay the same rate as any onshore small business. Of course, that would require some serious trimming of the size of government. :)
i-dog: "PS. I'm opposed to all taxes ... and pay none myself. Taxation is theft!"
So you want no roads, no airports, no cops, no firemen, no courts, no hospitals, no regulation, no nothing?
Or you want these things via a free lunch?
Private Sector Cannot Provide the Above Structure
Somebody has to pay for the basic framework of a society. No taxes, no nothing is a nihilist society...
The private sector can not provide these things... no laws, no courts means no markets. They can't function.
Import/Export Tariffs.. maybe a national and/or local sales tax. But first you have to cut down the empire to size.
"a national and/or local sales tax."
A tax is a tax. i-dog said no tax.
Import/Export Tariffs may qualify as not a tax. Thoughts?
Cut the empire down to size: ALWAYS...
The oligarchy uses their bought and bribed political class to misuse the tax system as well as suck corporate welfare out of the system...
truth
Where do you live? I want to move there. I promise to act like I don't know you.
i live on a private road built by the builder of my development; the private airlines can maintain airports; fireman can be volunteer and work on donations or be a 'for fee' service; people can arm themselves and protect their own person and property; most hospitals were originally set up by churches or private donations and grants (not government)
my garbage service is private. the street cleaners and plowers are private
why do i need to pay government half of what i earn only for them to take 30% off the top and return 70% of my investment to me in the form of services they say i "need"
bullshit and lies!
society is not roads and not unionized government thug RICO cops and firefighters and street pavers
Jamie Dimon will set your tolls since he has the wealth and power to do so...
The rest of your logic is who has the biggest gun and most ammo...
Ever hear of a social contract? Laws and courts?
Your false dichotomy is a fallacy of argument...
Anarchy <period>.
I don't expect any free lunch ... and I didn't contract for the income tax or the profits tax either -- whereby I could have negotiated the terms and the consideration -- so there is no legal basis for anyone claiming payment from me. And that is quite separate from the argument that both the income tax and the profits tax are unconstitutional!
Though I refuse to pay any income or profits taxes, I have no choice at all in having to pay sales taxes, value added taxes, property taxes, fuel taxes, alcohol taxes, import tariffs, customs duties, application fees, licence fees, registration fees, filing fees, parking fees, water charges, road tolls ... and a hundred other ways the state fleeces us every day.
Most roads that I travel on were paid for from the capital of the original developer and are [poorly] maintained by local authorities out of property taxes, tolls, traffic fines and parking fines. Airports are [or can be] built by private developers and supported by fees levied on both the airlines and the passengers. If I need private security for some reason, I'll pay for it separately, rather than relying on the state tax collectors and enforcers (cops). I pay for all medical care in cash (for myself and my dependants) and hold no state health card. My children were educated in private schools (and I'm encouraging them to consider home schooling my grandchildren). I don't wish to encourage foreign wars of imperial possession by paying for an offensive military team ... and if the state tax collection system didn't exist for takeover then we wouldn't need a defensive military team to defend it either!
You obviously don't [want to] understand how a peaceful and free society works, so I won't go into a detailed rebuttal of your childish objections. Suffice to say, there are examples in history and close approximations today in many extremely-pleasant-to-live-in tax havens.
"I'm opposed to all taxes ... and pay none myself"
So in other words, you're a thief too. Takes one to spot one I guess. You get free roads, cops, firefighters, teachers, health benefits, army to protect you, etc, etc, etc for nothing.
Talk about calling the kettle black!
Actually whenever you buy gas (or use a service that does, such as a bus) you are paying the road taxes on using the road.
I assume you are talking about income taxes that you are not paying, not sales, excise, fuel, etc. taxes which are levied on consumption rather than income.
Whether or not you think this is outrageous, one thing is for sure:
paying less in taxes (than a theoretical rate) is *NOT* the same thing as getting a subsidy!
Everyone repeat after me: keeping a little more of your own money is not taking from taxpayers!
But TARP yields better than Treasury bonds !! (Headline on yahoo finance). Why do we need corporate tax repats ?
Who are some of the two biggest and fastest growing companies? GOOG and AAPL. Why is that? They invest in innovation.
Both are growing and adding high paying jobs in the US. Which in turn generate income taxes, property taxes and consumption taxes. Not to mention keep the US competitive in the global economy.
US should get it's act together and create tax benefits for innovation, then the cash would not be moved offshore.
This is entirely different than Bush style tax cuts for all corporations.
So? It's OK if they don't pay corporate taxes? Just wanted to make sure I am getting your post as you intended.
Nope, just thinks the US needs to give better tax breaks for innovation. This creates more consumption and tax reciepts via creating jobs for highly skilled labor.
Google's Motto is 'Don't Be Evil'...clearly they are making a statement about taxes by not paying them.
They are called the Credit for increasing research activities (IRC 41) and the Domestic Production Deducation (IRC 199). IRC 41 has been around since the early 80s and the IRC 199 is a replacement from something the WTO declared unfair trade practice.
What???
The quasi-socialist Google guys want everyone to pay taxes but themselves?
No!!!! I'm stunned!!!
Socialist hypocrites??? Really???
Turd F. please...
Why should an NSA front company pay taxes to spy on you?
Good point. Just another money-laundering scheme, I suppose.
My Favorite Movie Quote:
Sam Spade to Joel Cairo: "When you're slapped, you'll take it and like it."
Well next to Marla's: "My God. I haven't been fucked like that since grade school."
Both are appropriate... no?
Ahhhhh.. calling it like it is. The 3 letter agencies are ALL over the silicon valley. WHere do people believe these ridiculous vulture funds get their funds from?
Not true for this sub-set, but most people have no clue that the Grabbermint would never allow such a huge information gathering source to be independent. Rather, nothing can get this big without some Givermint..errr...support, shall we say.
ORI
http://aadivaahan.wordpress.com
ORI
You are immediately branded a "conspiracy theorists" and must wear a scarlet "C" on your forehead whenever you are in public. And you must now willingly consent to daily body cavity searches as well as mind probes in order to assure the minders that you are harmless to society and to them.
How dare you suggest that we live in anything other than a free and open society. Off with your head.
</sarcasm off>
Hah! I vill vear zat badge vid honor!
ORI
since when is the CIA socialist turd?
since they started receiving taxdollars...
Still, i hear they'd LOVE to go private....Blackwater's cleaning their CLOCKS
Isn't Google among the largest contributors to Obama?
Just askin.
Dude, where have you been? We've been waiting!
Whoever junked you is an AFT
Ahahahahhhaaaa..... Awesome!
Whoever junked must be the dumbest dork on this site.
:-) Perfect!
PS: Sold your gold yet everyone? This is a good window to convert a greater portion to Silver at the very least. Please understand, in this particular time gold is THEIR silver bullet!!!
ORI
http://aadivaahan.wordpress.com
Ass Fucked Tool
Eric Schmidt: putting the crony, in crony capitalism.
He looks a little effeminate for an Il Duce impersonation.
That would explain the massive direct investment in Ireland, because they honestly have nothing else to offer, all the skilled tech workers are immigrants anyway
And the remainder are similar to (and they hate this) their brethren in the UK.
If you have an online business, not paying taxes at all is possible and legal.
I just find funny that Google has funded the electoral campaign of O'Bamao, and then refuses to pay taxes.
Not that Pugs aren't just as ethically bankrupt when it comes to placing truck-sized loopholes in the tax code, but how do you think Google is able to do so legally?
Enjoy your audits.
Please share the details oh great one. If you live in the US, income FROM ALL SOURCES must be reported.
So (for example) if you run all your personal expenses through a credit card drawn on an offshore bank that you pay off with offshore based deposits, you have taxable US income. And that is just the beginning depending on the legal formation of your business. Let me know.
Please post more information and sources on this. Thanks!
I'll start an online biz and employ people too if I get to reduce my taxes down to 2.4%!!
Anything is possible until you are the target of an audit or "review"
This topic will not go away. Renegotiation of international tax treaties will be a theme for the next few years, IMHO. Once again, tax lawyer looks like a job that will never go out of style...
My god, I can't believe that guy Briloff is still alive. He wrote great book called More Debits Than Credits.
WB7
You keep up your non stop political art and we'll all soon be wondering how you remain alive. I'm sure those whom you eviscerate have reached down to cradle their balls after viewing your latest genius. Here's hoping they do no more than hold their wounded pride. :>)
If WillB7 keeps up the political art...
And will never hear from or see the art of WillB7 again...
<tear>
Does this mean Neidermeyer hates me?
I was wondering why no post form CD. You're lying low ;-) Incoming!
I saw him speak once. He's blind, old, frail, and mad as hell.
He is legally blind, that is the funny part.
Just from the lab:
This looks suspiciously similar to the circuit board for the new Google "Law Enforcement Taser, Homeland Security Edition" coming out just in time for Christmas.
Here's hoping the nations finest place their tongues on the "9V Batt" spot to test the device. In fact, I've got a mole inside Google who's modifying the instruction manual as I type. :>)
WB7, You are a wizard. How'd you whip this out so fast. Damn...
There are fraud factories, there are fraudclosure mills, I am a counter propaganda plant ;-)
as usual, the Irish are to blame
maybe we could get a subsidiary in Five Points and crank up some new gang wars
Hey, it's our own fault for having excessively high corporate tax rates. What moron thought it would be a good idea to have a tax rate nearly double the rest of the world?
All these loopholes mean that it winds up only being the small businesses that pay the full rate. The big boys can afford to hire accountants and foreign offices to move thier money around.
Simply abolishing corporate and income taxes would cause an immediate flood of capital back into the US. Hell, I bet we'd suck up most or all of China's growth that way. If you HAVE to have funds, impose a national sales tax. A nice, visible tax like that has to stay fairly low, and will put pressure on the government to downsize.
If government spending were to shrink back to it's historical mean of 2% of GDP, America would find itself back on the path to prosperity, and they would find that it is a surprisingly short one.
+ google.
+ offshore profits
What difference does it make when they aren't paying taxes anyway? The upper middle class pays all the taxes through high payroll taxes.
The problem is that there is not new enough work to offset the 'employement bubble' that existed for the last 20 - 30 years.
THEY aren't paying, but there are plenty of other companies that would LOVE to pay less, and would LOVE to relocate to a country which is perceived as being very stable.
Not only that, but there are plenty of people who would love to open their own business, but the tax burden is so high that they don't. I am one of those people. I have two businesses that I could open within three months and employ 3-5 people (not to mention that I would leave my current job, which would create another job opening), but the taxes and regulations prevent me from doing so.
The average corporation, net of taxpayer paid benefits, pays about 0% taxes. As such, there would be no additional burden on taxpayers by simply dropping the who corporate income tax. In fact, by eliminating the bureaucracy associated with those taxes, individuals would actually see a BENEFIT.
A lot of people feel this way.
++
what I like about a national sales tax is that it's simple, the criminals and underground economy pay for the schools too, and it promotes savings. Probably why we'll never have one.
It all starts with reducing the central federal government, cleaning out all the peter principle slime worthless agencies. Decentralization to state and local govt is critical to keep elected slimeballs in check.
Govt borrowing and spending crowds out real growth.
Elections have consequences, go vote on Nov 2. Volunteer to be a precinct committeeman for your party. 3rd parties would be a disaster right now, it's much easier to take over an existing party using its existing infrastructure to transform it.
Good for them. It is every citizen's right to use any means necessary to not pay taxes. I will not attack google for doing something I would do if I had the means. Once again, google leads by example.
The problem with Google is that on one side it funds the campaign of Obama and calls for more socialism across the world, and on the other side it doesn't pay taxes at all.
If Google funded Ron Paul campaign, I would be OK.
Perhaps you need to look at google more sinister (take it from Dr. No on this one). My guess is google is trying to bankrupt the government. Tell them to spend more money and get the citizens more depandent. In the mean time, they try to cut funding the goverment by any means. Once government defaults, there will be an information vacuum and millions will be looking for critical information on how to navigate the events. Where will they go? How will they find the information?
A metal handed salute to google from Dr. No.
Are you the same DR. NO who kicked me out of the purists website a few months ago?
Totally agree.
And google not having taxes stolen from them does not "cost" other taxpayers anything. That's like saying locks on doors cost thieves because it prevents them from robbing you blind.
And as should be noted, google takes that money that would have gone to bomb some brown person into submission and reinvests it in their business.
The problem here is taxes. Any taxes on any entity. The elimination of taxes and thereby government, resolves the issue. The solution is simple.
The real rubes are the people who do NOT attempt to avoid taxes. In many countries, avoiding taxes is the national pastime. Of course, we can just go on believing it is our DUTY to pay-they like that you know.
Taxes are theft. Pure and simple.
+ google
That's true. And I personnally think that the Internet is killing and will kill governments. With offshore banking and offshore companies, now anybody can do tax evasion very easily, sometimes legally, and it's nearly impossible for the gov to see it. That's good news for libertarians. Technology will free us from the governments.
Someone went on a flagging spree!
*!
So when everybody is frauting...
why not Google ??
Speaking of Google, why can't the number one internet company report the S&P 500 correctly, for two days in a row?
http://www.google.com/finance?hl=en&tab=we
I always find it interesting to read an article or listen to a lawyer, judge or some other interested party explain to me the differences between truth, legal truth and legally provable truth. Same thing regarding a discussion about the terms moral verses legal and right or rights verses privileges.
While it is the right of all citizens, corporate to otherwise, to bend the limits of the law, some citizens have the means to bend more than others. And others don't worry much about laws at all. While many believe there are certain points in US History where it all went to hell, I point to specific times where the corporation went from a tool to strengthen a nation to one that destroys a nation.
Whether this "time" is when corporates were given tax incentives to rape rob and steal or recently when they were given all the rights of us mere humans, corporations are in fact a figment of our imagination, a make believe sociopathic tool that enables flesh and blood sociopaths to wield great power and grind our bones into dust to make their "bread".
"I point to specific times where the corporation went from a tool to strengthen a nation to one that destroys a nation" Why do you feel this happened? I would argue the objective of business or government has not changed. They both are striving to survive, grow, and finally dominate. We are at a point in economic evolution where the two have grown to the point where there is not enough room for them to coexist. Therefore they will fight until one wins out. Things have not changed philosophically. Nature has ruled from day one.
I would not oppose your argument.
The ruling elite, the powers that be, have used various forms of control, be they economic, political, social or religious, for thousands of years. They have their fingers in all of them and just as money rotates into and out of sectors, so does power rotate through these control devices.
Corporations have simply proven quite effective in exploiting the slaves on the plantation while allowing the slaves to feel they're enriched by their servitude. There is nothing more productive than a slave who feels s/he is free and partaking of the (supposedly) shared bounty. Sadly the slaves don't realize they're competing with the other slaves for limited resources and that the majority of the "excess" labor s/he produces goes not to him or her, but to the master.
The purpose of a corporation is to use up resources (including people and their labor) until they run out of resources or go bankrupt. They are insatiable energy and resource machines and we are the cogs. Are we on a path to where the only "shared bounty" will be food stamps and enough health care to keep the corporate machine alive?
Shh, the spirits are about to speak.
http://www.youtube.com/watch?v=lMzUYpsQtqU
"nature has ruled from day one" Ultimately, she will, but mankind does not act like the other animals. It's the only species that works to destroy its own economic and natural environment. Real nature, like real democracy and real capitalism is a tremendously complex system of checks and balances. The current and corrupt tax system has nothing to do with that.
It does seem curious. It brings to mind a scene from the movie Payback, when Mel Gibson is refuting one of "the outfit's" claim that a committee makes the decisions for "the corporation". Mel said something to the effect that he was not buying it. If you go high enough, it always comes down to "one man" who makes the decisions.
This then brings into question the multi-generational aspect of the plan that has been fermenting in society. It brings into question the recurrent themes of idealogy and control, through banking. And it also brings into question the required leaps in technology required to make it happen on a global scale.
Can it be by chance or coincidence? Is the corporate and banking structure aligned to make what is happening by chance or by design... and how many people know the truth?
Big picture or small, short term or long, in my view there is no chance or coincidence playing out here. That doesn't mean that from day to day or decade to decade the roll of the dice doesn't determine events and outcomes, for it most certainly does. Random chance and choice is always at play and a million monkey humans making a million monkey human decisions every minute most certainly is the predominate play.
But when everyone and everything is being played out on the same game board, the choices are limited and the rules understood. While the illusion of "freedom" dominates our belief that we control all that we see, in fact what we are presented with is the illusion of freedom of "choice" plucked from a relatively narrow menu. Thus while we all dance our individual gyrations, we all move to the same background beat.
Similar to the idea that I care not who votes but who counts the votes, I care not what decisions you make as long as I control the decisons you are offered.
Way to go Google. Good for them. They're doing exactly what our idiots in congress have created an incentive to do--keep the cash abroad. An easy way to fix our entire economic problem would be to reduce the tax rate on repatriated cash. The result would be huge domestic investment. Instead the $ trillion in cash will be invested overseas, and our industry will continue to decline.
All part of the debt slavery plan.
This is precious considering that Google has all of the earmarks of being a banch of the US Federal Government intelligence community... and allied with the Wall Street banks, such as Goldman Sachs that pay no taxes either.
So, we have a pattern here in identifying the bad guys:
1. They steal from the people. In the case of Goldman, it is money and in the case of Google it is information (can you imagine the US banking/intelligence complex allowing Google free range and access to all of the information it gathers AND to pay no taxes of it was not part of the banking/intelligence community? Makes no sense. AND GOOGLE's UNREALISTIC GROWTH WITH UNLIMITED RESOURCES IS JUST MORE EVIDENCE).
2. Understanding they are working for TPTB, they work out deals and feel safe in paying no taxes. It would be self-defeating for a branch of the banks to bail out the people that they are trying to subjugate into debt slavery.
So, do you know where your information is?
IMO, Yahoo and others got crushed and now is being told to sell out, because Google had the full faith and fiat creating capacity of the banking government behind it.
Google has joined the illustrious ranks of the too big to fail, too big to fix, too big to control...and therefore, too big to TAXED.
Two words - Flat Tax.
Flat taxes only work on reported income. The use of off shore tax havens and repricing allows income to disappear.
Should have been more clear - flat tax, no offshore tax havens or transfer pricing or other creative accounting. Pay your taxes - period.
You should rephrase that as "reported profit". Unfortunately individuals are not allowed expense deductions like corporations.
Dutch Sandwich for them, a big shit Sandwich for everyone else
Just finished the article a few notes.
First , It says 60 bl is the tax avoidance by all of the US firms, not just Google which I am sure is the low estimate.
It also says 2.2 rate is the Google's rate on foreign revenues which brings it's total tax level to 22%.
I think we are barking to the wrong three in here. Whoever created those incentives, that are absolutely STUPID and favor large multinationals over small firms is at fault. And yeah, if those loopholes are in place and you are competitive global business, it would be dumb not to use those, hence there comes Google with it;s efficiency and other large tech following right behind.
My point is, it's not those firms who created the loopholes and the loopholes are not created to just firms, it's the whole tax framework that sacks. And responsible are legislators, who should be blamed, investigated and sacked. Yet another reason to demand a third party in our country, because our political system needs more competition and new blood. Nothing else will change the current situation.
That's all.
Actually, through lobbying and outright ownership of the means of legislation- corporations do write the tax laws.
The problem is government- an institution designed to benefit a favored few at the expense of the many. The promise of security for the reality of slavery. Central Banks are just the totalitarian icing on the cake.
I too understood they pay only 2.4% tax lol, no they pay 22% so they save 'only' 1/3 of the nominal tax rate which pretty much all companies do, but sure try underpaying your taxes by 1/3 and you get a SWAT team at your door
There are ways to do that w/t SWAT team at your door, especially if you are a partner in a limited partnership. : (
As for the rest and majority of us, we will pay up or ELSE.
Charlie Rangel, head of committee on taxation. Rangel, who is a tax cheat.
then you have Geithner....
It's the political/financial ruling class against the rest of us.
p.s.
"Google's effective tax rate is 2.4%, which has resulted in $60 billion in less taxes paid to the US, and which has boosted the company's stock price by a whopping $100/share!"
the correct statement:
Google's effective tax rate is 2.4%, which has resulted in $3 billion in less taxes paid to the US since 2007, and which has boosted the company's stock price by a whopping $100/share!
I blame the lawmakers. US tax rates are the sole reason for all of this. Companies that can afford to hire the best tax consultants available are just being smart. I guess when your not paying any taxes, you can afford to be a big philanthropist.
yea verily
Not a googel fan, but fast growing companies pay little or no income tax due to credits and depreciation write-offs. In any case, corporations are only conduits for tax, not net payers.
Both the idea of excessive taxes, needed to finance the bloated bureaucracy and the tax evasion by companies like Google really piss me off. At some point, there has to be some taxes collected. What keeps China and other countries from stealing even more of our costly R&D, or even our factories that these companies companies have transplanted overseas? Answer: It is the carriers groups, the military, and the (formerly) strong economy and entreprenureship that could get established here inUS in the first place. Try getting a Google started in China that isn't censored etc. So bottom line, all you oil companies, financiers, ITs , etc: you forget that without the US as a "stabilizing" force, which is a necessary evil in that it costs money you shareholders wouldn't be counting their money...you'd be counting dead bodies---a hell of a lot more than we have already counted in the two current wars. (Yeah, I know we screwed up the economies by our finacial BS as of late-but still without us, instead of riots in France and Greece, and "austerity" measures in the western countries , you'd have revisits of mass wars, and instead of carrying pitchforks, we'd all be carrying shovels...to bury all the dead people).
So there is a balance. Govt does provide some benefits, but it has to be tightly controled, and taxes kept to a minimum to keep the beast lean.
As someone who has some experience in financial & retirement planning, let me tell you the simple truth - the tax rate for majority of the wealthy high income people is generally lower than that for the middle class.
And whoever thinks that tax cuts in the last 10 years were focused on the middle class or that middle class will benefit from those is just delusional. Middle class will mostly pay for those for years to come.
So next time someone votes for any incumbent politician, or major party it would be wise to be a sceptic in regards anything they have to say, especially about their great tax cutting record.
So the employees of these companies don't pay taxes? The company itself may not pay taxes since it reports zero profit, but all employees probably do. Tax corporate profits and you reduce the money available for coporate investments. Don't tax corporate profits and the company can use that money to hire additional employees (who will pay taxes) or for various other things like capital improvements.
It isn't as simple as stating that the company "pays no income tax".
One sentence: Republican tax cuts do not work to create jobs in the US.
Throw out the bums, and elect new ones. Is it really so impossible to conceive peace without taxes?
The problem with controlling government is you give the government power to controll you. They hold the power and wealth of the "majority" whereas you do not.
What do you think google does with all the money that it does not pay to the US government.
It invests in R&D and creates more high paying jobs, which holy shazam batman, creates jobs, which in turn drive income taxes, property taxes and consumption taxes.
It is not merely a transfer pricing game, the Netherlands has an incentive for companies who invest in R&D and innovation.
US needs to get it's tax house in order to start encouraging, not discouraging innovation.
Disclosure: I help software and technology companies set up shop in the Netherlands. So if you want to keep your profits instead of funding POMO (the FED not the Indians) ping me.
do you help expats too? The ship is sinkin' pretty fast these days.
sorry, not directly, but generally there is job creation with new entities.
Yes, but the problem is government creates (tax) policy for everyone, then gives carve outs to their supporters. Just look at new health care policy, then giving out some carve outs to certain corporations.
Are there resources/forums online to research tax efficiency of structuring online businesses overseas?
"Google is “flying a banner of doing no evil, and then they’re perpetrating evil under our noses,” said Abraham J. Briloff, a professor emeritus of accounting at Baruch College in New York who has examined Google’s tax disclosures."
Reducing your taxes by using every possible legal means is not "evil", it is being prudent, competent, and a good steward of the shareholder's investment. Government will get its due when it really should, on any capital gains that come when the shares are sold.
If there is any evil here, it is in the attitude that government has the right to be a parasite in every way possible, and that it is a good thing it can find new ways to do so. Well, I am at a point in my life where I now understand what damage that does to our prosperity and liberty, and I cheer when companies politely decline to be willing hosts.
+100 (under the table)
I operate in this space and I can tell you, there are bonuses aplenty when you can score a 2.4 like that. Newsflash - even the education sector does it. Universities, such as those big ones in Cambridge, New Haven, and other places... uses blocker corporations in the island havens to invest in overseas hedge funds (that would otherwise pay taxable UBIT because of the partnership structure) and convert those otherwise taxable gains into dividends and interest payments.
Your biggest tax gaps in the US are: the broad tax exempt sector (which should be confined to religious organizations) and the grossly distorted corporate tax structure in the US - which should be eliminated entirely.
"even the education sector does it"
However, if a student suggested such a course of action in an econ class at these universities he would be flunked and labeled as an evil capitalist pig and then brought up on ethics charges and kicked form the university altogether :)
This is precisely the outcome when the tax code is used to punish the successful.
If corporate income was NOT taxed at all, then these funds could flow to the owners, where they could then pay income tax AND spend it if they choose, boosting the economy.
Instead, we are stuck playing tax games, of which Tim Geithner is very familiar with.
I would never trust anybody who publicly states their motto is "do no evil". And I really wouldn't trust anybody whose motto is "do no evil" yet they are in bed with the NSA.
Those 2 little dweebs and Eric Schmidt make my skin crawl. Sort of the same feeling as seeing a televangelist soliciting money from it's poor parishoners and leaving out the back door and driving their BMW's home to the mansions. I don't trust them or their products one bit. Too bad they work so damn well.
Very simple solution, just have Congress reduce everyone's tax rate to 2%. Then we are all paying the same and Google and other company will not have to follow Machiavellian tax schemes. And there are perks to this strategy since such a low tax rate means the ending the funding of endless wars and nation building, ending the welfare state, monumentally reducing the flow of dollars through D.C. which will reduce a lot of the corruption, tremendous job growth as business won't have to make slave contributions to Ceaser, and in general a massive defunding of the Orwellian state.
My socks just blew off. R u serious! ?
You all do know that GOOG IS a CIA shell company. So why pay. They are tax exempt.
They can pay my property taxes. Fucking Govt
Yes, it's a shell company making a lot of people rich...
Pure socialist propaganda, all hail the rise of socialist capitalism.
Richard Murphy - The most discredited tax 'expert' in the world.
Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic.
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