[rprasad]

That's called a charitable deduction, and it's already part of the tax code.

Google isn't using the charitable deduction; it's simply using a loophole to avoid U.S taxation on income earned from non-US sources. Whether this is bad depends on your view on taxation.

[danssig]

>it's simply using a loophole to avoid U.S taxation on income earned from non-US sources

Income earned from non-US sources on US soil or outside of it? The thing that infuriates me about my home country is that they think I owe taxes on money I've earned while living in a totally different country. What stops, say, Russia from deciding I owe them taxes too?

[JoshTriplett]

Regardless of your view on taxation, it seems pretty reasonable to only have to pay taxes in one jurisdiction (the one in which the income occurred). Differing views on taxation could argue over whether one or zero jurisdictions should get to impose taxes, but it seems pretty reasonable that no more than one ought to.