Is it ethical to avoid paying tax as an individual? Many would say no.
Do you mean avoid (by legal means) or evade (by illegal means)? Any government that uses tax incentives to affect citizens' behavior is saying it's ok to avoid taxes. If they promise your taxes will be lower if you do x rather than y, they're counting on your desire to avoid taxes to motivate you to do x.
Including -- very relevantly for many people here -- huge incentives given to creating wealth via capital gains relative to creating wealth via salaried employment. I mean, memo from Congress to you: if you either a) make a business then sell it or b) invest in a retirement account, we will literally let you keep a few million more of your own money than we would have otherwise.
I mean avoid: employing sophisticated financial and legal engineering to reduce your rate of tax by an order of magnitude.
We all try to avoid paying too much tax, but that's not tax avoidance. Sending your profits to the Bahamas via Holland and Ireland is tax avoidance. I'd be happy to tell everybody and anybody about how I legally reduce my tax bill. Google's PR people would probably rather keep their methods on the down-low, out of the public eye, in spite of their utter legality. So why is that?
You probably mean "tax haven", which is a rhetorical slight-of-hand to suggest that jurisdictions competing for attention via tax rates are somehow enticing people to sin. Competing via tax rates is just another way of enticing people to behave differently. Some people are under the impression that this happens only internationally. This is incorrect.
One of the healthiest features of the American experiment is a federal system where you have a broad spectrum of options in terms of tax rates versus social services. People (and companies) can, and do, pick legal regimes which optimize for the outcomes they find important. You may have heard people sort of like living in California, especially if they work for political subdivisions of it: that comes at a price -- you'll pay a gobsmacking amount of money in taxes relative to a similarly situated individual in Texas. (I managed to pay California several hundred dollars in taxes last year and I don't even live there. Yay, hotel tax.)
Competition among governments internationally is also healthy, for much the same reason. The market in tax and legal protection encourages governments to not just expropriate all the surplus from their wealth-creating constituents.
My point was that when a company uses a foreign tax regime (which is what google does, btw) it completely escapes any incentives created by it's own government that are related to tax avoidance. Apparently the parent of my previous comment (pg) doesn't think that US government's purpose is to give incentives to US companies to move to Bermuda. Btw, I never implied that moving to tax havens is some kind of a sin.
Hey, nobody's saying that businesses that don't operate in America and consume American gov't services should pay taxes. Airbus probably doesn't pay much in American taxes, and I'm not upset about it.
But if a corporation has a significant presence here and is consuming an american-educated work force, american highway spending, american police spending, american state dept actions to ensure supply of various things (the oil industry would grind to a halt without the cloak and dagger stuff)..
then they pull an accounting hack and we're supposed to believe 98% of their operation is in the Cayman Islands? We're getting ripped off. You don't like taxes, I get it. How do you like the idea that you're paying higher taxes (or taking on more gov't debt) because other people are bilking the system?
yes 'tax haven' is a slur invented by the high-tax rich countries to belittle their competing nations who have lower tax rates to attract individuals and corporations.
you never hear Singapore, Dubai or Hong Kong being called 'tax havens' (they are), the word is usually associated with 'Dutch Antillies, Bermuda, Jersey, Guernsey' (ie. evil nations who are taking our money)
Well, corporations are by their nature sociopathic entities that seek to maximize profit regardless of anything else. That's fine, and I don't think anyone can blame them for taking advantage of loopholes.
The question is, why do the loopholes still exist? Why aren't more people angry about them?
EDIT: Downmodded? Seriously, guys, noncontroversial statement. Go talk to an economist. Or a lawyer. Corporations are legally obligated to be sociopathic and maximize profit above all else. It's a feature, not a bug, invisible hand and all that.