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Google: It’s Just Not Cricket!
Originally posted http://www.tothetick.com/google-its-just-not-cricket
The UK Leader of the Opposition, Ed Miliband plans on running head long into Eric Schmidt today during a conference in which he will clearly point out that he doesn’t agree with Google Inc.’s lack of fair play. It’s just not cricket, Eric! In an interview given to The Observer he said that Google wasn’t “living up to their responsibilities”. He went on to add that if everybody went around flouting HM Treasury laws and using loopholes to get around paying tax then the British Health Service wouldn’t exist. Has somebody actually told him that the British Health Service doesn’t exist already and that was long before Google was around and we turned it into the search engine on everyone’s lips?
Tax havens cost the world something in the region of $100 billion a year. Google Inc. has been using the loophole in the double Irish as it has become known. Around 88% of sales go through Google Ireland and Google Ireland Holdings. Tax dodgers? Or just using the loopholes that we allowed to be set up around the world? In just three years, Google Inc. has managed to exploit the rules and avoid taxation to the tune of $6 billion.
Miliband plans on telling Schmidt face to face in a conference today in London that Google is being unethical. He will go on to add that when (and if) he gets into number 10, he’ll clamp down on them. David Cameron, the Prime Minister, and current President of the G8 summit will be bringing tax avoidance to the top of the agenda at the next summit meeting. The “Don’t be evil” slogan coined by Google might have been quietly dropped, but it looks like it’s living up to part of that according to some in politics. But, just how effective will Cameron be at the G8 summit? Will Britain go it alone in tax reforms? It seems unlikely that they will. Out on a limb, alone, fighting against tax avoidance loopholes means that they will suffer heavy losses as companies go elsewhere. In these troubled economic times. It’s not the politicians that are calling the tune. Of course companies are going to avoid tax and if we aren’t good enough to get lawmakers to stop them doing that, then that’s hardly their fault.
But, yes, it is questionable today. Many businesses are going under. Many are struggling to keep their heads above water. Forty five companies are going bankrupt every day in the UK at the moment and households are struggling to make ends meet. But international tax-hopping is big business. Revenue from income tax and VAT returns in the UK alone rose by over 6% compared with last year. But, corporate tax fell by 10%. Something’s amiss!
But, Ed, listen up, it’s not only Google, you know. Starbucks only paid tax once in the past 15 years and Amazon wrote off all its tax in the UK (despite making over $3 billion in sales). Starbucks goes through what’s known as the ‘Dutch sandwich’. Amazon uses the ‘Luxembourg sandwich’. But, if we carry on like this, there won’t be any more dough to make the bread, will there?
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At the moment, the larger ones especially, financially rape everyone in sight.
Surely there will come a time when corporations will truely see the value of ethics and morals in their overall thinking? Eventually they will have squeezed everything they can out of the current system and either profits will decline or the worm will turn. The recent supposed U-turn by Starbucks in the UK is an example of what could happen if people get really pissed off and start to boycott companies.
The point being?
Standard Deviant: You're right, but you're also wrong.
Why would hard working tax payers NOT assume that the corporation they buy from also pays THEIR fair share of tax on the profits they make from them? That's the question.
Personally, I'd like to see consumption taxes as the only taxes charged. However, until such time, corporates do have a moral obligation to pay taxes that are due (without resorting to loopholes to wriggle out of paying any). The vast majority of individuals are taxed on income, doubtless the majority of smaller companies pay some sort of tax on profits too, so why shouldn't the mega corporations?
So far as it goes, Politicians and corporates are two sides of the same coin. They both have self interest high up on any agenda. However, personally, I'd trust a government to generally have better intentions than large corporates any day of the week.
A corporation's highest priority is to produce the greatest revenue possible for it's shareholders. Any corporation that does not explore all avenues in doing this is negligent, and incompetent.
The issue of un-paid income taxes is a "red herring" meant to divide the sheep among us. There shouldn't be any corporate, or personal income taxes, and the IRS should be shut down.
Think how much better America would be as the world's tax haven, rather than the in-hospitable place it is for money today.
A measley $6 billion? That would barely pay for a few British civil servants.
So why should just large corporates and the uber wealthy be allowed to be 'stateless' entities, so far as taxation is concerned?
If they generate income in a country, they should pay taxes to that country.
Politicians write that laws, but it takes accountants and lawyers to find the loopholes and exploit them. Do those guys offer to do it for average Joes? Why not? Oh, it wouldn't pay for their greed/extravagant lifestyles, so only the rich profit from their knowledge. And so the wheel turns.
Money is the root of all evil. You better believe it.
Just who is doing who a favour by conducting business or being domiciled in a certain country????
Amazing how politicians try to deflect the blame for their own failings. Even if every company, like a village idiot, decided to generously pay their "fair share of tax", the deficit and debt would still be there and the country would still be insolvent. As for the British Health Service (I guess he's too daft to know it's the National Health Service), when you're spending more than £2000 per person per year providing medical services when a family of four can buy full coverage medical insurance at around £4200 per year FOR THE WHOLE FAMILY, it's easy to realize how daft these idiots are!
One would think that the British Health Service should be funded by taxes paid by those requiring British health service ... ie. individual taxpayers ... if they actually want/need it. Not from taxing international corporations (other than through tariffs).
Corporations set up tax dodges. Countries pretend to be running the government actually set up new laws to hamper competition from other corporations seeking to rule the government. People pretend to vote for their favorite corporate shill. Rinse and repeat. Add a dash of eternal war for more control. Bullish!
So, let me try to write down what I understand:
- there are tax loopholes written in the laws of various countries
- the politicians use them, the banks use them, honest and corrupt people around the world use them
- the same politicians that created these loopholes and that are using them start doing lip work against usage of loopholes
- then they start judging the honest people and businesses for not being ethical, while saying nothing to the likes of Goldman Sachs, JPM, HBSC, Mitt Romney and other undisclosed entities
What I understand from all this is that the tax loopholes will continue to exist one way or another and the rules will be enforced on law abiding people, from now on, in political public tribunals.
Yes, and to see why, consider that even in an article like this one, as highly critical as it is of political twits like Milliband, we find sentences like the following:
Tax havens cost the world something in the region of $100 billion a year.
"...cost the world..."? Deconstruct that if you will. Where did that $100 billion go - to the Martians? Surely this should have read something like:
Tax havens prevent rapacious governments from stealing in the region of $100 billion a year.
And before anyone gets all worked up about "greedy corporations", etc., consider that corporations don't really pay tax, but simply collect them from the end customer. So that $100 billion would have come out of their customers' pockets in the form of higher prices (with corresponding supply-chain markups, and 20% VAT added where applicable).
And US Senate went after AAPL yesterday. Coincidence? Me thinks not. - Ned
{although if all of the "hidden" cash were seized, it would make zero difference}
Public lawmakers attempting to chastize private sector entrepreneurs for interpreting the letter of the law correctly.
Too funny.
Perhaps the current VP of the US or his son who have both held and /or holding the top post in the state please explain to all what the term "Delaware Corporation" signifies.
Politicians and beaurocrats will attempt to protect their positions and the worthlessness of their work no matter what imposition is put upon the population.
Hold the Mike Mayo... "That's why I'm richer than you."