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Google Avoids Taxes, Uses scheme that costs US 60 billion

  1. Stacie L profile image89
    Stacie Lposted 7 years ago

    http://www.huffingtonpost.com/2010/10/2 … ef=twitter

    Using a complicated system that funnels profits through Ireland and the Netherlands, Google has ducked about $3.1 billion in taxes in the last three years, reports Bloomberg News's Jesse Drucker.

    Thanks to the international tax strategy, which assigns income to countries with lenient tax rules and expenses to countries with higher taxes, Google's overseas tax rate is just 2.4 percent, compared to the U.S. corporate income tax rate of 35 percent and the U.K. rate of 28 percent. According to Bloomberg, other technology companies do this as well. An economics professor told Bloomberg that these companies' shenanigans, which have colorful names like "Double Irish" and "Dutch Sandwich," cost the U.S. government, currently mired in a roughly $1.3 trillion deficit, about $60 billion every year.

    Google's strategy isn't illegal, but, to borrow a word from Google, it appears somewhat "evil."

    Microsoft, Bloomberg says, also makes use of the infamous Double Irish. And the company has blamed the U.S. government: Last year, Microsoft CEO Steven Ballmer threatened to ship employees to other countries if Obama raised taxes on corporations. The longtime corporate strategy is a large-scale version of what can happen in debt-strapped municipalities, when residents simply move elsewhere as their city raises taxes.

    A bill, first introduced in 2007, that would reward "patriot employers" who suck it up and keep their operations domestic, has languished in Congress. Barack Obama supported it back when he was running for president, saying, "We can end tax breaks for companies that ship our jobs overseas and give those breaks to companies that create good jobs with decent wages here in America."

    of course they are not the only big corporation using this loophole..

  2. Misha profile image73
    Mishaposted 7 years ago

    Did people who insist it's unethical to not live by BigG rules get a cut? wink

    1. Stacie L profile image89
      Stacie Lposted 7 years agoin reply to this

      wink wink

  3. adibintoro profile image57
    adibintoroposted 7 years ago

    incredible ...

  4. I am DB Cooper profile image65
    I am DB Cooperposted 7 years ago

    Solution: lower corporate taxes, increase taxes on the rich. When corporations make a lot money, it stands to reason that a lot of their top executives also make a lot of money. It's a lot easier for a corporation to move portions of itself around to hide from taxes than it is for a corporate executive. Make it easier for businesses to establish themselves in the United States and create more jobs. Which is worse, having a job and paying taxes that you think are too high, or not having a job at all?

    Problem with this solution: it's been hard as hell to raise taxes on the rich for the past 25 years. Anytime anyone suggests it they get shouted down and voted out of office. During the so-called "good ol' days", the post war era of the 1950's, the rich were taxed at a MUCH higher rate than they are now. If we were to apply the tax structure from those days on people today, our fiscal problems would be fixed in less than a decade.