

Google's effective tax rate:  2.4% - spking
http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

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hardy263
“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.”

"The U.S. National Science Foundation funded the mid-1990s research at
Stanford University that helped lead to Google’s creation. Taxpayers also paid
for a scholarship for the company’s cofounder, Sergey Brin, while he worked on
that research."

Wait, wait. Just because I took a scholarship from you means that you own
everything I do? So does that mean if I sponsored some kid with a scholarship
and he became successful, he owes me? If we were to use that same faulty
logic, doesn't that mean all of the advances in technology are paid for by
taxpayer money that go into public education? I was under the impression that
scholarships are for advancing technology or helping those in need, rather
than using it as an excuse to take credit for my ideas.

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dbingham
Google's generally done well at not being evil. This, however, is being evil.
I don't care if everyone does it. By skimping on paying their taxes, Google
and other corporations the world over are forcing people to cut education
budgets, cut road and infrastructure maintenance budgets and raise rates for
individuals who have infinitely less money than Google.

High taxes and the existence of bad laws is no excuse for exploiting the loop
holes in those laws. The correct course of action is to pay the taxes,
volunteer information on how to close the loop holes and lobby for lower
taxes.

~~~
sokoloff
They're not "skimping on paying taxes", IMO. They're arranging their affairs
in such a [legal] way as to maximize the return to their shareholders, which
is the fiduciary duty of a public company.

The global competition in taxation is a good thing, IMO.

Am I exploiting a loop hole by deducting my mortgage interest? Am I exploiting
a loop hole by deciding to hold an investment an extra day so as to get long-
term capital gains treatment? Am I exploiting a loop hole by buying a computer
or washing machine on "state sales tax holiday weekend"?

Maybe you'd argue that I am, but I believe that I'm just reacting rationally
to the incentives offered. (There might be a valid government reason to
encourage home ownership, long-term investing, or to spur local purchases in
the economy. Must I ignore the incentives to act in a way that governments
have decided to encourage? If not, why is it different for GOOG?)

"Anyone may arrange his affairs so that his taxes shall be as low as possible;
he is not bound to choose that pattern which best pays the treasury. There is
not even a patriotic duty to increase one's taxes. Over and over again the
Courts have said that there is nothing sinister in so arranging affairs as to
keep taxes as low as possible. Everyone does it, rich and poor alike and all
do right, for nobody owes any public duty to pay more than the law demands."
Judge Learned Hand, 1935

~~~
dbingham
The difference between individual incentives and corporate loop holes is that
the incentives were put there to encourage certain type of relatively
beneficial behavior.

The loopholes were placed there often at the behest of the corporations they
benefit. Corporations have far more ability to influence governments than
individuals due simply because they have far more money. Money is power. More
power, more responsibility. Google has pledged to be responsible. Taking
advantage of the irresponsibility of its peers is not responsible.

~~~
sokoloff
How about corporate loop holes of the form "We'll give you a tax break [or low
interest loan, or other incentive] for the next 10 years if you agree to
locate some of your operations here, with the understanding that you'll be
employing XX people here over the next 5 years"?

The jurisdiction offering that "loop hole" is encouraging what many people
would agree is beneficial behavior (encouraging local employment). The
jurisdictions standing to lose that (current or prospective) employer may see
it as unwelcome competition, but I'd rather permit jurisdictions to compete
freely, such that each local government can tailor its services and
governance/taxation as it believes will best serve its consituent population.

Beyond simply believing that such a system is "proper" and "right", I don't
think any other system is "stable". Should California be able to dictate that
Nevada CANNOT pass a certain type of law or adopt a certain taxation
structure? Should they be able to do the same to Ireland? If so, under what
theory of law or even theory of basic fairness?

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pchristensen
_International tax rate_

They are paying lower US taxes by licensing their search IP to their Irish
office at below-market price, but the US is far less impacted than Ireland or
other international markets the US serves.

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robryan
It would surprise me more if Google wasn't doing everything within the law to
reduce tax rate. I'd say very few people here would put there hand up to pay
taxes they aren't required by law to.

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jamespitts
I think that Google will make better use of these financial resources to help
the people who live in the US than the US Federal Government will.

~~~
jamespitts
Sorry, I got way wrapped up in my point and forgot the facts that are actually
driving the discussion.

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charlief
Duped (related) post, or am I missing something?
<http://news.ycombinator.com/item?id=1815195>

Edit: just pointing out a related post as people may have missed it.

