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Google to pay $1B in France to settle fiscal fraud probe (reuters.com)
184 points by etchezaldun 31 days ago | hide | past | web | favorite | 141 comments

Maybe I don't know much But every time I see that Google gets fined (even if $1B) it feels to me like a a Ferrari got parking ticket

One of the key issues is that illegal behavior by these companies almost never leads to the prosecution of decision makers. This way reckless and monopolistic actions can go unchecked and occasional fines are simply factored in as operating costs.

Agree Because those companies are public the fine might have greater impact But overall, when you know you can pay the fine, you are less afraid to take those risks

You can compare it to entrepreneur from a wealthy family

He can take risks, knowing that if he fail, it won't be to the ground

It's not only the fine, it's the bad publicity those companies get when getting the fine

Damage to their brand worth billions

Cambridge analytica scandal costed FB a lot more then the fine

It cost them in their users trust

and that's the worst kind of punishment a large brand such as facebook can get

All fair points, but I wouldn't exactly call damage to brand reputation the single worst punishment a corporation can get though. Can easily think of an infinite number of worst punishments.

I guess there is a parallel with actual people. Personal reputation matters, but surely we need to be a bit more harsh when punishing certain behaviour.

The worst kind of punishment is if Mark Zuckerberg went to jail and every media was broadcasting him in handcuffs.

It would have sent a strong message to other CEOs. Don’t fuck with people’s data.

But that seldom happens. It’s US, the rich rule the country.

> I think one of the key issues is that illegal behavior by these companies almost never leads to the prosecution of decision makers

I think, despite the title, this isn’t actually a criminal case. It’s Google taking advantage of that Irish tax loophole.

It's not just Google, it's the same for pretty much every big corp.

Every time a fine or an agreement is made, their stock goes up and the execs throw a party.

Investors don't like open litigations. It suppresses the stock price until an agreement is reached. And it has to be listed on filings with the potential highest losses. Google could have in their filings this is a 10B liability. And then they realize it's just 1B so naturally the stock goes up.

A Ferrari parking ticket probably wouldn't get anywhere near 1% of its owner's annual income though?

A Ferrari driving fast in Switzerland though gets much more than that...

That model is used in some countries, such as Finland, with a famous case being a Nokia executive (back when they still mattered).

But it can get towed. Like a person would if caught with fiscal fraud.

So then it's not similar to a Ferrari getting a parking ticket, right?

What's even crazier is that their actions probably lead to a profit of more than $1B.

So it's like me doing something illegal and profiting $100k, but then getting fined $50k. I'd be stupid not to do it again. And again. And again.

At a minimum, the fine should be 2x the amount gained.

The enforcer's problem is that they might inadvertently make it worthwhile for unfavorable things to happen to the enforcer, such as:

- Making it more profitable for the company to just leave your market completely, underservicing everyone there immediately

- Creating an actual monopoly with costlier and poorer service when the policed company exits the market (either from leaving or being dissolved - the latter not applying to Google in this case)

- Creating an incentive to actually challenge the authority in court. Exponentially raising the cost for enforcement and not guaranteeing any favorable outcome.

- And as a corollary to the court, the challenge of authority can result in all the enforcement tools being declared invalid, including the charter for the enforcement agency itself! Resulting in a big public sector layoff and void in enforcement capability.

Yeah the court challenge is the big issue here.

Google haven't done anything illegal. The so called "loophole" in the law is actually the way the law was explicitly designed to work. If France pushed this too far Google might win and France would be left with nothing

The people cheering for France here are really just cheering for the end of the rule of law. Google pays little tax in France because it's not a French company, not because of "loopholes".

It's basically a tariff.

There is no European tech company that's going to compete with Google. They could ban Google entirely and the result would be Baidu etc. coming in and doing the exact same things.

Not to say we have any real contenders, but it’s difficult to compete with Google when the French company pays 33% corporate tax while Google pays significantly less

To the best of my knowledge the corporate tax in question is a tax on income, rather than revenue.

Any would-be competitor to Google is going to want to plow most/all of their revenue back into growth for years, perhaps over a decade. VC funded companies normally lose money so they can grow faster.

Once you're making money, yeah that's kind of a big sucking hole you want to deal with. But that's a political issue that other EU members states have with Ireland (and Luxembourg, and the Netherlands).

Why? America has historically had very high corporate tax rates relative to the rest of the world, that's what trump's tax reforms fixed. This idea in Europe that Google lives in a low tax environment is really very wrong. Their effective rate had historically been somewhere in the upper 20 percent ranges, no?

Certainly, tax is not the reason there are no Google competitors from France.

That too, a parking ticket of $1

Fines are meant as a warning. If you impose a 50bn fine then every other company out there will start having second thoughts about entering the EU market. Lobbying will skyrocket and a lot of things could stale or worsen for the economy as a whole.

>If you impose a 50bn fine then every other company out there will start having second thoughts about entering the EU market.

Yes, don't enter the EU market if you want to dodge taxes. More countries should be enforcing this..

> Fines are meant as a warning

Fines are a deterrent and punitive measure. They punish you for doing something and make you hesitate to do it again. If these 2 goals aren't reached than the fine isn't really effective.

If they were a warning then you'd expect the second offense to be punished by some action that can make the fine feel like "just" a warning. What's that action? How effective is a string of endless warnings that are never followed up with real action?

One way would be to implement a series of exponentially growing fines. This would make them less "cost of doing business" and more "massive liability".


Yeah sure. Try telling that to your friends.

Well, without those, I might have a better chance to actually see my friends in person...

I watched a TV show called Billions and it is illuminating as to how these big companies and people easily avoid touched by the law. They pay pennies on the dollar aka fine and move along with 0 actual damage.

Look at what happened to Panama papers or Bermuda Papers or even what Snowden had said.

"Little people pay taxes" was a line I read in Panama Papers book, one which I'll never forget

You know that’s not a documentary right.

You know fiction can be illuminating toward several realities, and be the most effective idea-communication tool, plus gets around legal issues quite easily, right? The parent didn’t say more than that, that it was illuminating, on a personal level.

>I watched a TV show called Billions and it is illuminating as to how these big companies and people easily avoid touched by the law.

1. Half the show is about the AG of SDNY throwing white collar criminals in jail.

2. It is fiction.

As they say, The apple doesn't fall far from the tree

There is a difference between wealth and income. The top income earners pay a majority of the income taxes. The lower income earners pay a much smaller part of the taxes.

A bunch of the super rich deal in wealth rather than income. Remember reading about tech execs with $1 annual paychecks? They earn their money differently and pay taxes differently.

I wish there was more online showing this in a simple form.

> The top income earners pay a majority of the income taxes. The lower income earners pay a much smaller part of the taxes.

This is a technically true but extremely disingenuous and misleading argument, which is probably why I hear talking heads on Fox use it all the time.

Imagine the world consisted of a flat income tax, one multi-trillionaire and 8 billion people living on a dollar a day. That person would probably be paying the vast majority of income taxes, yet this is clearly not an equitable system and it would be absurd to suggest that person is somehow being wronged.

Note also that if the incomes of top earners increase while everyone else's remains stagnant (which is what has been happening since the 1970's), then mathematically the share of total income tax paid by them must increase. Again, it is ridiculous to claim that this is evidence that they are being treated unfairly. Not increasing the top marginal tax rate in this case would be a regressive tax pretty much by definition.

I tried to make a simple observation rather than an argument. Sorry it didn't come across that way.

There are many different forms of taxes. Income is the one we tend to look at. There are other methods to pay taxes. Most income taxes is paid by the wealthy but I'm not sure about the super wealthy. They end up with other forms of taxes such as what Zuckerberg was reported as paying several years ago (billions in more than one year).

There's a difference between looking at the overall tax picture and a small segment of it. In many cases the details of the high level and breakdowns are not easily available for people to read.

I wish fiscal fraud was more hardhly punished. In a democratic nation, it's basically stealing money from all of us, and not putting a share of resources that supports programs that benefit citizens of all income levels.

It's also anti-competitive behaviour which in the end makes the fine an acceptable cost for the virtual monopoly.

How is it anti-competitive?

Two companies(nvidea, AMT) make similar products and hold a roughly 50:50 market share. both are doing well, both are selling units.

nvidea grows greedy and hires shady accountants to commit tax fraud, enabling nvidea to keep more after-tax money.

next year, nvidea has more money to dump into R&D -- they build a better product, and charge more for it. market responds, nvidea grows richer, ATM suffers losses.

nvidea keeps stealing money. has more for R&D, and more for marketing. nvidea buying sponsored reviews. keep building reliable products. more money for support staff.

ATM operating with a smaller budget every year. still improving, but not growing.

nvidea has even more money for R&D. more money for aggressive marketing. more money for sponsoring studios. "our art was built with nvidea products, and is best enjoyed using nvidea products".

the practice of stealing money to further growth to eclipse the competition by any means is hella old.

Evading tax let them be more profitable (or more affordable) than companies that can't do it.

I don't know, that just sounds like regular "competitive" not "anti-competitive".

By the same logic, does developing a more efficient manufacturing process (eg assembly line) count as "anti-competitive"?

If breaking the law leads to an advantage over other companies, that strikes me as anti competitive. They are not competing on the merits, pricing, or service of their products. To take it to an extreme, hiring an assassin to literally kill the competition is anti competitive.

Which law did Google break? It sounds like they followed the law and that’s precisely the problem.

They disguised the extent to which their activities in France played into their operation for the purpose of putting it all on the books in another country. They were doing work in France and did not declare it as required by law.

If they didn't break the law they wouldn't have agreed to a $1B settlement.

Did Google admit wrongdoing?

Edit: I thought it was common knowledge innocent parties settle lawsuits routinely. Is that not the case in Europe?

And I thought it was common knowledge that corporations "settle without admitting wrong doing" when they're guilty as shit but know they'll have even larger punitive damages if they drag out a trial.

But then again, maybe you're right and Google would have paid their lawyers more than $1B fighting this, so it was cheaper for them to settle.

I think one of us might be pretty naive...

I also thought it was common knowledge big companies tax evade routinely.

Committing fiscal fraud is breaking the law.

It's anti-competitive because it makes you competitive through illegal actions. Whoever sticks to legal actions can't compete. Hence anti-competitive.

The point of market competition is that you can't do some certain things to make sure your output is productive.

You can go and kill your competition and that would also be competitive - but we don't really want that kind of behaviour so we have rules against this. When you're breaking and undermining those rules you are being anti-competitive - you are subverting market competition.

Umm, tax fraud by $BIGCORP amounts to robbing people who are forced to pay their taxes through the payroll. How is daylight robbery the same as legitimate competition?

Anti-competitive means anti-"fair competition"

Not OP but I guess it’s because a monopoly can afford to keep on paying fines and continue the same practice. A smaller competitor pays by the rules, can’t afford to pay fines, hence anti-competitive.

If you pay your tax and not your competitor it is self explanatory.

m-p-3, i am so glad you verbalized this, it is crazy how only few people understand this. Instead tax evasion beeing a shame infront of society, majority regards it as a virtue.

I think there is a fine line a lot of major companies have to go through to ensure they are not inadvertently doing fiscal fraud (and other types of fraud) while maximizing their main goal, which tends to be profit maximization. If the government punishes too hardly, individuals and corporations are more likely to shy away from that market due to increase in operations cost (E.g. More lawyers + accountants) and implicit risks. Customers would also move away from those products and services if the cost became too high.

Part of the governments job is to ensure that they react to potential loopholes faster, decreasing the competitive advantage that a non-conforming organization may have. A harsher punishment may even put some companies out of business, impacting unemployment rates, supply chains, medium-long term government revenue and the services they provide.

How would you go about increasing the punishment while considering the possibility that the corporation inadvertently did that? Would you punish larger companies more harshly? How would that impact the market place?

Corporations do everything inadvertently. They're not sentient, they're a pile of emergent behaviors driven by incentives.

You increase the punishment because they inadvertently did it. Then maybe you'll get an incentive structure that prevents it next time.

I couldn't agree more. This is something that no one, from any polical side, right or left or republican or democrat or whoever in whatever country, says enough. Companies are indeed considered as real entities whereas they are just emergent structures which behavior comes from decisions made by real humans. And I truly believe that those real humans should be trialed and sentenced more or at least as much as the company they are working for in cases of fiscal fraud. And this is not the case now, the company shielding them from the consequences of their individual actions. For companies, the justice system works quite well (just like here, even with extraterritoriality and fiscal paradise), nations can manage to apply the law to them. But the responsibility of the individuals in the same legal cases is often forgotten. Take the Google example : even if you talk of "fiscal optimization" to give a nice appearance to those actions, some individuals in Google crossed the line and knew it perfectly. And it is true that Google, as a structure, is ok with it ('don't do evil' does not apply when it comes to maximizing profits). But those people at Google who crossed the line will never appear in court, nor the ones having validated their work (probably the higher management), which is a shame in my opinion. It happens that a company break the law, but it never does it alone : it is people who instruct it to do so. To see my point, look at England at the moment : if a ruler of a country decides to break the law, is it the country that is responsible or the leader ? My view is that it is both and both should be prosecuted by the individuals impacted.

Companies aren't different from people. Everyone responds to incentives.

they're a pile of emergent behaviors driven by incentives

Never thought about it that way, thanks for the insight!


There are no nice words to describe how beyond insane this belief is.

Governments are charging for providing an environment in which you can have a business in the first place.

Good luck running a business in a place without police, laws, basic infrastructure like roads etc.

And if you don't want to pay taxes in some place, you're free to not do business there.

Doesn't fit the definition of theft very well now, does it?

While taxes are a sane and common way for a government to make money, there are countries where there is either no corporate tax at all, or only some industries are taxed. Additionally, there are places where corporations do pay taxes, but personal income is tax free.

Looking far into the future, in a post-scarcity civilization taxes are obviously unnecessary. So, while not a theft, it's not insane to wish for taxes to be gone in one's country.

> Additionally, there are places where corporations do pay taxes, but personal income is tax free.

Which is only possible because they either have lucrative (taxed) tourism industries, are rich in oil, or are Monaco (sorry but you're not getting in), Nauru (enjoy your stay while you can), Somalia (need I say more), or the Sahwari Republic (good luck).

So you either have places where governments are lucky to have found some other way to make money, or dysfunctional countries.

At the end of the day governments need to get currency somehow to provide the basics.

Do people have a choice to opt out of those services and therefore their corresponding payments? No. They're forced on the citizens, ergo, theft.

You can have a government without taxation. Fund it through voluntary contributions. It would be much smaller, which is another plus.

> Do people have a choice to opt out of those services and therefore their corresponding payments?

Yes. Move yourself out of the country somewhere else (and in the case of the US give up your citizenship). My go to recommendation here is Somalia for the "taxation is theft" crowd

It's not an opt out if I have to give up my home. It's my house and land, why can't I force your government to leave?

Because that goverment was democratically elected and have the legitimacy to decide.

So no, they don't have that choice.

If you decide to live outside of society, hidden in a shack in a self-sustained manner then maybe you could live tax-free, but you wouldn't be entitled to any subsidized services (varies by country) like healthcare, police protection, water treatment, driving on public roads, etc.

At some point, it's just easier to get taxes and let the authorities to determine where that money should be distributed to best serve the society that elected them. And if you don't like the way they redistribute that wealth then you're free to vote for someone else or get yourself elected to do things differently.

> Good luck running a business in a place without police, laws, basic infrastructure like roads etc.

Basically the Internet.

The internet is infrastructure. So is a postal system that gets your wares to your customer.

Or the banking systems and laws that make it possible for you to receive money via the internet in the first place.

If some customer in country X doesn't pay you for your services, you fully expect the government of that country to have systems in place that allow you to go after what you're owed.

But even darknet drug markets rely on a lot of infrastructure provided by countries/governments at the end of the day.

Taxation is a social agreement that we as a society of people decide to pool part of all individuals' money towards projects that will benefit everyone in short or long term.

It is, but every now and then when I remember that overall tax that I pay is >50% of my gross income it does feel like theft.

I'm not a finance expert, but why can't there be just one tax for everything like VAT? If I buy a coffee for 1 euro I pay 20 cents VAT, if a billionaire buys a yacht for 100 mil he pays 20 mil VAT. To me that seems fair. I'm just thinking out loud here, but it seems that there are so many taxes and different stages instead of one, just so most of people wouldn't realize of how much tax they are actually paying.

There could be and they should be. There are better (more just, more enforceable, less hostile to businesses) and worse taxes (basically unenforceable easy to game ones which only honest people fully pay). The problem is that increasing taxes in exchange of getting rid of bad ones is way more politically difficult than just introducing new ones or very slightly increasing existing ones. For example land value tax is widely considered a very good tax: it's just (the more valuable land you have the more you need the government), it's easy to enforce (hard to hide the land), it doesn't hinder business (you pay it no matter what you decide to build there), it discourages hoarding on valuable resource. Still, if you try to increase it enough to get rid of some very bad taxes you still get an uproar an be voted out even if the change is revenue neutral. That's because you will hurt one entranched group a lot and everyone else will benefit on average less (at least at the beginning).

Because rich people have can afford people that will help them avoid paying taxes. >if a billionaire buys a yacht for 100 mil he pays 20 mil VAT. Or he will have some legal agreement with yacht owner in tax haven, to 'rent' a yacht for $1. Paying 20c tax on 100mil 'purchase'.

Hey I didn't say that taxation was perfect :) it clearly isn't, especially nowdays when it seems that middle income class needs to carry burden of whole the country while top earners laugh all the way to their panama bank.

It would be more expensive for you to hire your own private police force, fire department, sanitation and water treatment plant, and countless other services.

It actually wouldn't, by a rather large amount, if it meant you could also opt out of the other government services you don't want and which comprise the large majority of the government budget.

"We need fire departments and they would cost 30% more if only 70% of people carried fire insurance" is fine until you spend 50,000% of that amount on War in Iraq and buying votes of retirees / drug companies with unsustainably large benefits increases.

I don't see the math adding up there, how the average person could have their own mini police and fire force, or any of the countless pieces of infrastructure that we all use. Taking out the portion of our taxes that goes to things we might not want doesn't even begin to cover this. Most of this stuff is available and works at all because everyone pays a little bit and economies of scale kick in to make it less than if each person rolled their own solution.

You don't have your own personal fire department, you and thousands of other people who live in your city each pay for fire insurance and the insurance industry then limits their claims by operating a fire company. It's basically the same as what the government does except that you have the option to not pay and then subsequently not have anybody to complain to if your house burns down. And the fire company may show up to put out your house fire anyway (to keep it from spreading) even if you don't have an insurance policy, but then you have a house which is half burnt by fire and half flooded by firefighters and you don't have any insurance, which continues to be a strong incentive to buy fire insurance to begin with and thereby fund the local fire company.

In the end you end up in the same place for the services that are actually worth having (like fire departments), because they're worth having so the majority of people buy into them and you still get economies of scale, but you get the option to decline other wasteful services that cost more than they're worth. And that puts useful pressure on individual services to be worth more than they cost.

If you're talking about a bunch of people paying into a fund to cover the cost, then all you've done is reinvent taxes. The only difference is who you pay them to, and that people on the lowest end of the income spectrum can't afford coverage even if they wanted it.

The only difference is that you have a choice in whether you want to pay the money in exchange for the coverage. Which is exactly the point.

The poor don't get out of paying it by having nominally low personal tax rates, because all the other taxes still apply to everyone. When you tax a business and it raises prices or can't give employees higher wages, that comes out of the pockets of the poor the same as everyone else, which is what makes them so poor to begin with. Remove $500 in spending of which $250 were real services, then pay $250 for the real services yourself, and the result is a $250 surplus -- which can go to the poor as much as anyone. They are, after all, the largest beneficiaries of lower unemployment (resulting in more jobs with better wages) and lower prices (because they spend more of their income).

I currently live in the Midwest in a fairly high taxed state. I've also lived in other Midwestern states were taxes were super low and any effort to increase taxes on anything was met with severe resistance.

The difference was very noticeable.

In the high taxed state, when I woke up at 7am after a heavy snowfall (read 6-10" of snow) my roads were plowed curb to curb. School buses were always running on time, the roads were clear and you were expected to be in the office.

In the low tax states, when I woke up at 7am after a heavy snowfall (read 6-10" of snow) the roads weren't plowed until late afternoon. Schools were routinely closed and you had no option but to work from home. The streets were hard to navigate since the plows just plowed around the parked cars, turning a two way street into a one way street. It was common to see cars plowed in for the Winter because the snow was plowed up over their windows. The city I lived in routinely ran out of money to pay the plow drivers so at times, the streets didn't get plowed at all later in the Winter months.

A lot of times, people reject the benefits of taxes and just see it as a money grab by the local and state governments. Once you experience the difference first hand, you can't have an appreciation of the amount of good taxes provide your local and state governments. I don't mind paying higher taxes because I know it does benefit everybody in a myriad of ways, not just the pleasant experience of having your streets plowed in a timely manner.

> in the Midwest in a fairly high taxed state

Just curious, if you don't mind sharing, which state is that?

I grew up in Minnesota. Lived in North Dakota for about eight years while attending college and grad school. The comparison was between those two states.

It is more complex than that. Washington doesn't have income tax and doing Ok.

Yeah, tax income doesn't have to come from the general public if the state has a competitive advantage it can exploit in some way. That's how Florida gets away with ranking #2 on fiscal security with no income tax too; tourism pays for everything.

I have a suspicion that most libertarians would be completely fine with unplowed roads. On top of that, should people want to have plowed roads they are free and welcome to hire someone to plow their roads.

"we" didn't agree. Some people before us imposed the rules.

Is paying taxes optional? No, it's not an agreement but an imposition.

This is objectively false. Taxation is you paying the government for services rendered (or, if you want to be very pedantic, access to those services, even if you don't actually use them - which, given that you're on HN, is extremely unlikely) - emergency services, roads, a military, courts of law, antitrust regulation, and far, far more. By being a citizen of your country, you are consuming these services, and therefore owe the government money. You don't like it? The vast majority of countries, including the US, allow you to leave anytime you want.

Edit: Come to think of it, using the government's services without paying tax is theft.

What came first, the services provided or the taxation?

Services provided. Most people don't pay any tax until their first job, but are protected by the police, use roads and sidewalks, and attend public school.

> Taxation is theft.

Companies can't even have a decent financial system without government.

Not to mention that society can't function without systems to organise on a large scale. We've long passed the era of small settlements, when millions of people come together they need to be supported in many ways otherwise chaos ensues.

In the absence of taxes, how would you suggest we structure society?

To me, it's a good deal for Google. I'd prefer to see them sued and condemned in a court rather than seeing this kind of "pay to settle" agreement. It feels so American.

So forgive me, because I'm a very ignorant person:

Why don't we just jail executives responsible if they consistently fail to abide by the law?

To nitpick: jail is where you hold people pending trial. Prison is where you send people as punishment.

That aside:

(1) We do jail executives, all the time.

(2) The reason maybe you think we don’t jail enough executives is because it’s hard to prove they did anything wrong. The criminal standard for proof is very high: beyond a reasonable doubt. When it comes to “blue collar” crimes, that’s pretty easy to meet. You wouldn’t believe the amount of evidence that exists in a typical drug crime! The defendant tried to sell drugs to an undercover cop; they found more drugs and an illegal firearm in the car; they searched his phones and got extensive evidence of drug transactions. (That is also why so many such crimes result in guilty pleas.)

But here the government didn’t win a case. It settled. You settle because there is risk you won’t win at trial. If you have to get accounting experts on the stand to argue about whether the thing that happened is illegal or not, good luck proving that beyond a reasonable doubt. (I don’t know what the standard is in France I don’t expect it’s much different.) Additionally, this is a tax case. It’s a “you put this number under section 3.3(b) instead of 3.3(c).” To secure a criminal conviction in a tax case, you need to prove beyond a reasonable doubt that the defendant’s interpretation of the law was not different from the government’s but that no reasonable person would have interpreted it the way the defendant did. Tax positions are carefully vetted and at a large organization like Google you’ll never take a tax position that isn’t at least plausible.

Stepping back, the problem is that you’re taking the government’s position at face value. At least in the US, the government prosecutes many cases that are, at best, based on aggressive or creative interpretations of the law. Of course the government says “Google defrauded the tax office.” Of course they have to say that. But dig into some high-profile white collar prosecutions. In the US they’re generally a matter of public record. They often are far from clear cut.

Jail is for both pre-trial and for inmates serving sentences of 1 year or less (give or take; that's decided at the county level so it's just a rough rule of thumb; for some it's 18 months).

Also, the vast majority of "executives" never see the inside of a cell, even pre-trial. They might be in a holding pen for a few hours, but they always make bail and if the judge/prosecution is particularly concerned, the suspect gets additional conditions such as some kind of monitoring/curfew. A great example is Paul Manafort.

To nitpick your nitpick: that's only the case in America - everywhere else, Jail and Prison are synonyms

Nah, he's wrong, even in America.

To go one level deeper, elsewhere it's gaol.

I don't think that's true. Even for .uk, Google returns 55.5 million hits for "jail" and only 600 thousand for "gaol". For .au it's similar, and .nz is a little more even, but still "jail" wins by a lot.

From https://www.spectator.co.uk/2014/04/why-did-we-ever-spell-ja..., "The Guardian long persisted with gaol too but changed to jail in the 1980s, like the other English papers."

Undoubtedly common usage, especially in the pop media, has regrettably shifted towards the North American trends, as with so many words.

In Australia there's a move away from prison/jail/gaol and towards 'corrective/correctional/detention facility / centre' presumably to make the places sound more aligned with their political or social intent.

However each of the Australian state's active legislation still refers to them as gaols.

If you attempt an 'aggressive or creative' interpretation of the rest of the criminal law, you will very likely be going to jail. People have been trying innovative forms of theft for centuries, and the laws are broadly enough drafted that you're still going to be stuffed.

You're right about the high standard of proof required for tax cases, and the difficulties of prosecuting complex white collar frauds, but I'm not sure that we have to set the mens rea bat as high as we do. Plenty of other crimes can be prosecuted on "known or ought to have known" rather than having to prove intent.

First: because it's really hard to pinpoint exactly who is responsible for something like this in a large organisation. Is it the CEO? They are unlikely to know enough about French taxation. Is it the local accountant? That's probably a team as well.

Second: Cases like this often arise from different interpretation of laws that are all at least plausible. Companies may tend to be somewhat too optimistic in their interpretations, but it's rare, at least at that size, that they actively try to commit tax fraud.

Third: It is the company that profits from the offense, so it's only fitting to apply any sanctions to it.

Fourth: Making this criminal law would raise the required standards of evidence to a level where few of these cases could ever be prosecuted.

> Is it the CEO? They are unlikely to know enough about French taxation

This line of thinking becomes a shield for executives, letting them push subordinates into corners where they'll have very strong incentives to do illegal things. And they will benefit from these illegal actions, while being responsible of nothing as they won't know enough on any subject.

This feels like a moral hazard paradise to me.

> Is it the CEO? They are unlikely to know enough about French taxation.

That's besides the point. If you want to operate in a certain country, you need to - as a business - familiarize yourself with their laws.

The CEO is ultimately responsible for ensuring the company abides the law. If the CEO doesn't know enough about French taxation, that's not an excuse not to follow the rules: the CEO should then delegate the task to someone they trust, but ultimately it's their responsibility.

If a McDonald’s cashier steals from a customer should the CEO go to jail as well? How far do you want to take the concept of “the CEO is criminally responsible for everything their underlings do”?

Is this cashier giving the money to their manager? No, they're pocketing it. Just because they were on the clock doesn't make it the responsibility of the company.

> because it's really hard to pinpoint exactly who is responsible for something like this in a large organisation.

That's usually the case for most crimes, which is why we have detectives investigate them.

How do you find a murderer in a large city? You Investigate!

Same goes for corporate crimes. Investigate!

When Amazon didn't include state sales tax in their transactions, did you report your purchases and pay the proper sales tax on them? Millions of Americans didn't and a good number of them knew that they were supposed to. Should they all be sent to jail for failing to abide by a very outdated law?

The answer is quite simple: jailing people for fiscal fraud is not that popular among lawmakers for some reason.

Especially in France. Some people are notorious for living in grey areas or unlawfully for their whole life, but never go to jail. And perhaps worse than that, constituents keep voting for them despite.

I mean, they had been almost openly doing it for over 30 years...

Law makers prefer to send people to jail for stealing sandwiches:


He was already supposed to be in jail.

“For some reason” does not constitute a simple answer. I’m not even sure it’s an answer at all.

I read it as irony/sarcasm. Crimes commonly perpetrated by lawmakers and people of influence are punished very lightly... "for some reason".

You need to pay hundreds of thousands a year to jail a guy.

Good. But governments need to move on to addressing the far greater billions in potential taxes that big corporations legally avoid through complicated tax loopholes.

Granted, this is going to require significant changes politically in many countries, but among the general public across the spectrum, the hope that the wealth held by large corporations will trickle down to them through market mechanisms has long since worn quite thin.

"The combined tax payment is less than the 1.6 billion euros the finance ministry had been seeking from Google"

Does any one know why the url says 550 million ?


From the article:

> The settlement comprises a fine of 500 million euros and additional taxes of 465 million euros

500M EUR -> $550M. The distinction between fines and taxes presumably matters for accounting?

"The settlement comprises a fine of 500 million euros and additional taxes of 465 million euros". Probably it referred to the fine in USD

Ahh, thanks ! ;)

That's about 15 euros per person in France.

and the 0.0003960339% of the GDP

so what :)

You're off by two orders of magnitude.

I just thought it was an interesting comparison ¯\_(ツ)_/¯

Is this a shadow trade war in response to America’s dominance in tech? I keep seeing absolutely massive fines of American tech companies in Europe, fines marked up to account for Google’s global revenues. Do they make their homegrown companies pay such outrageous fines? $1B is a staggering amount of money, probably all of Google’s profits from France for years to come.

To be clear I think France has every right to do this and Google can decide to close up shop there if they want, nobody is forcing Google to operate in an unfriendly environment.

Corporate tax in France was (until recently) 33%. The government was seeking 1.6B which means it’s estimation of Google’s profit for the years in question was closer to 5B.

Hopefully this kind of fine will void the tax shenanigans Google uses to offshore their profits to Ireland as well as its reduced tax rate there.

Make money in France, pay taxes there. Doesn’t seem like to much to ask.

>I keep seeing absolutely massive fines of American tech companies in Europe, fines marked up to account for Google’s global revenues.

Maybe EU companies don't dodge taxes as much as US companies? Maybe there is a larger concentration of wealth in US corporate entities? Lots of sane reasons, no need to rush to wild conspiracy theories...

>To be clear I think France has every right to do this and Google can decide to close up shop there if they want, nobody is forcing Google to operate in an unfriendly environment.

Well, nobody is forcing Google to dodge taxes either...

Maybe it is a response to a more global situation. Please look into corruption charges and fines of US Justice on European companies such as Alcatel, Société Générale, Alstom and you'll that these fines are quite a good instrument to weaken strategic European competitors (and the opposite is true as well) and even take them over. Example: https://www.economist.com/business/2019/01/17/how-the-americ...

Very interesting, looks the fines are tit for tat from a game theoretic perspective. It seems the headlines are dominated by fines of American enterprises but that doesn’t paint a full picture.

It seems the Chickenshit club[0] has expanded to Europe.

[0] https://www.amazon.com/Chickenshit-Club-Department-Prosecute...

Well this is good news that the probe finished rather early and the fine amount will go into the state coffers. It also sets a very good precedent so this seems to me lile an absolute win.

I know Google makes a lot of money but a billion here and 5 there--and the forced behavior change--might make a dent in their pocketbook.

Business as usual

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