
UK MP to Google: 'you do do evil' when it comes to tax - Libertatea
http://www.wired.co.uk/news/archive/2013-05/17/google-amazon-tax
======
pvnick
Perhaps it makes me an evil fascist, but I really don't see the big deal in
trying to avoid paying taxes, assuming you're doing so legally. Liberals tend
to attach some sort of moral component to how much money you give the
government, as in if you try to pay less than what they perceive to be your
"fair share" (usually some unreasonably high number) then you must be evil.

As if governments have any sort of decent track record on spending
intelligently.

~~~
Goronmon
I think it's the general sentiment that companies avoid things like paying
taxes by skirting around the rules through means available to them due to
their wealth and status. While a smaller company isn't going to have the
resources at their disposal to gain such advantages.

I guess it's similar to how it people feel like celebrities and executives can
always avoid going to jail for things that a regular person would almost
definitely end up in jail for.

Or more succinctly, laws aren't perfect and corporations abuse those
imperfections.

~~~
icebraining
I agree it's the sentiment, but I'm not sure how many of those means are only
available due to wealth, and how many could be used by many small companies if
they knew about them. It's not like creating a company in a tax haven is
particularly hard or expensive.

~~~
DanBC
Some of the schemes are pretty complicated. Routing the goods and money and
paperwork needs to be done carefully to ensure you're still legal.

Hiring KPMG, Deloitte, Earnst & Young, or PWC isn't cheap.

And we have a really weird system here. These big four firms sent some of
their accountants to help the government create tax laws. They then exploited
the loopholes in the tax laws they had created.

([http://www.guardian.co.uk/business/2013/apr/26/accountancy-f...](http://www.guardian.co.uk/business/2013/apr/26/accountancy-
firms-knowledge-treasury-avoid-tax))

EDIT: Here's some discussion of the PAC report that's more balanced:
(<http://www.ion.icaew.com/TaxFaculty/26745>)

~~~
hkmurakami
_And we have a really weird system here. These big four firms sent some of
their accountants to help the government create tax laws. They then exploited
the loopholes in the tax laws they had created._

Said "weird" system actually aligns with their incentives perfectly. Create a
system of laws that _can_ be exploited, but only through the advisory services
of accounting professionals like themselves. Complexity creates exploitation
opportunities, which results in more monetary rewards for themselves.

~~~
untog
_Create a system of laws that can be exploited, but only through the advisory
services of accounting professionals like themselves._

Right, but the weird part is that the government is complicit in this. They
have no such incentives.

------
drucken
Multinationals have no choice. Tax avoidance and jurisdictional arbitrage are
standard competitive advantages since the 60's when capital controls were
evaded by the banks and the 80's with the politically-backed corporate boom.

The problem will never be solved by private companies. It requires political
leadership and global cooperation.

That $32 trillion in offshore tax havens ($12 trillion actively managed by
international banks) will keep growing otherwise, as governments and society
increasingly cannot pay for what they previously spent, let alone the
future...

~~~
bornhuetter
And it's particularly hilarious the UK complaining about it since they are one
of the biggest enablers of tax avoidance in the world. Bermuda and the Isle of
Man, for instance, make a complete mockery of British politicians who complain
about offshoring.

(Speaking as someone who works in financial services in London).

~~~
drucken
Yup, it is also a British bank, a pre-cursor to HSBC that created the first
shadow banking system.

The UK has by far the largest network of control over tax haven jurisdictions,
with the exception of the mighty Delaware.

~~~
bornhuetter
Exactly. You don't see that mentioned very often in the papers, though...

If Google and Amazon are evil, then so are half the "British" banking and
insurance companies. It's common practice to channel profits and off to
countries like Bermuda to avoid both tax and regulation.

------
simonsarris
Worse than companies who avoid taxes are the people who see it as admirable
that they can get away with it.

It's a problem that needs to be fixed in the culture and governance of a
people, not in Google itself, since attempting to assign any civic duty to a
multinational is probably laughable. Singling out Google probably doesn't do
too much good, except maybe to make people think of "favorite company X"'s
role in society.

Worst of all are the "all taxation is theft" Libertarians. Multinational
corporations at least don't live in the society they espouse trashing. Ben
Franklin also hated the "all taxation is theft" crowd, and believed that
_failure_ to pay taxes due is _theft_ from the rest of society:

 _"The Remissness of our People in Paying Taxes is highly blameable; the
Unwillingness to pay them is still more so. I see, in some Resolutions of Town
Meetings, a Remonstrance against giving Congress a Power to take, as they call
it, the People's Money out of their Pockets, tho' only to pay the Interest and
Principal of Debts duly contracted. They seem to mistake the Point. Money,
justly due from the People, is their Creditors' Money, and no longer the Money
of the People, who, if they withold it, should be compell'd to pay by some
Law._

 _"All Property, indeed, except the Savage's temporary Cabin, his Bow, his
Matchcoat, and other little Acquisitions, absolutely necessary for his
Subsistence, seems to me to be the Creature of public Convention. Hence the
Public has the Right of Regulating Descents, and all other Conveyances of
Property, and even of limiting the Quantity and the Uses of it. All the
Property that is necessary to a Man, for the Conservation of the Individual
and the Propagation of the Species, is his natural Right, which none can
justly deprive him of: But all Property superfluous to such purposes is the
Property of the Publick, who, by their Laws, have created it, and who may
therefore by other Laws dispose of it, whenever the Welfare of the Publick
shall demand such Disposition. He that does not like civil Society on these
Terms, let him retire and live among Savages. He can have no right to the
benefits of Society, who will not pay his Club towards the Support of it._

~~~
dm2
In today's society huge corporations have shareholders which demand and
actually have the right to sue if a company does something which does not
maximize profits.

I agree with you that it is morally wrong and the companies are severely
hurting the countries and the citizens that helped get them started. It's
congress who must step in to pass laws which close the loop holes which cost
our government and it's citizens trillions.

------
RivieraKid
If I headed a big corporation, I would optimize taxes too and at the same
time, wish that the laws wouldn't allow me to do that. Why should I be the
only stupid one and give my competitors advantge?

I absolutely agree with Warren Buffet on this: he uses the legal loopholes
while arguing against them. I think it's the most ethical position. At first,
it may seem as hypocrisy, but in fact, it's absolutely understandable and
logical.

~~~
technoslut
>I absolutely agree with Warren Buffet on this: he uses the legal loopholes
while arguing against them. I think it's the most ethical position. At first,
it may seem as hypocrisy, but in fact, it's absolutely understandable and
logical.

Unless Buffett is giving away that money for good causes then he is a
hypocrite. Actions carry far more weight than words.

~~~
RivieraKid
AFAIK, he _is_ giving lots of money away and lives relatively modestly. But
even he didn't, I'm not convinced that it would imply hypocrisy.

~~~
technoslut
None of that means he is giving away as much as took in tax loopholes. I
haven't read any official news story that Buffett is doing this. It's also
quite possible he's doing so without publicly acknowledging it. However, I
doubt it because he's rarely weary of giving a statement or interview even in
his advanced age.

------
dm2
They (Google, Amazon, MS, Apple, and every other large multinational company)
don't have a choice, their competitors are doing it and stockholders could
possibly sue for not preforming standard tax avoidance methods.

A company losing billions just to make a questionable ethical point (which
most people don't even care about) isn't really worth it.

The only way to prevent the "double-Irish" and such schemes is for the US
government to step in and close the loophole. American taxpayers and business
help fund these large companies and get them on their feet, then we allow the
company to funnel all of their profits through other nations, that needs to be
fixed.

Why doesn't congress step in? Are they being paid not to? Does nobody see a
problem with public officials being paid by large corporations and
organizations to vote for a law which might be against the best interest of
the nation and the majority of it's citizens?

------
adrow
This would be the same Margaret Hodge who appears to have her own tax
avoidance issues that she refuses to clarify.

<http://www.scribd.com/doc/113892078/Priti-Patel-Letter>

[http://www.telegraph.co.uk/finance/businesslatestnews/966839...](http://www.telegraph.co.uk/finance/businesslatestnews/9668396/Margaret-
Hodges-family-company-pays-just-0.01pc-tax-on-2.1bn-of-business-generated-in-
the-UK.html)

------
gbin
So tell me UK government, how did you miss for SO long Jersey and Guernsey few
km from your coasts? Oh and within EU, the Netherlands and the little trick
about reselling trademarks that allows IKEA to be a f __ing non profit company
and pay 0% tax ? Should I go on ? Luxembourg, Switzerland, Liechtenstein ?

If you allow it, deal with it and don't whine like this.

------
gillianseed
So fix the laws to prevent this type of tax avoidance, else all companies will
use these tax avoidance schemes, like they are doing right now.

Which begs the question why these 'loopholes' exist in the first place, and
why they aren't quickly plugged.

This was rhetorical question, the politicians keep these loopholes in the
system at the behest of these massive corporations and rich individuals who
bri... lobby them to do so, and then they put on these shows to make it seem
as if they are actually trying to prevent it.

~~~
codeulike
When you fix the loopholes, you create other ones that are maybe harder to see
and more expensive to achieve. So over time fixing loopholes makes the tax
system more and more complicated, and hence more expensive to run. And
loopholes will continue to be found, but perhaps only be reachable by richer
and richer entities.

~~~
talmand
When the tax law has reached that point, it's time to gut it and start over
with a simpler system with fewer or no exceptions based on strange criteria.
Then you put in requirements that makes it incredibly difficult to add in
exclusions, exceptions, deductions, and the like to the system.

But of course politicians won't do that. How else would they get on TV
grandstanding about the evil corporations in our midst? Politicians use the
tax loopholes the same as corporations do, just for different reasons.

------
brown9-2
Are there any estimates as to how much tax Amazon and Google would have paid
to the UK if they didn't partake in these maneuvers?

------
gingerlime
great video about the whole corporate tax game
<http://www.youtube.com/watch?v=d4o13isDdfY>

also showing parts of the discussion with Google, Amazon and Starbucks in
Parliament.

