[mcintyre1994]

Google is clearly in the right here, unless somebody can actually point out a law they're breaking. Simplifying a lot, Google have 2 responsibilities here: Pay at least the amount of tax they owe, maximise stuff shareholders care about. It doesn't take much to work out the optimal solution to them two problems is to pay exactly the minimum amount of tax possible.

[DanBC]

Laws are written by politicians, and interpreted by judges.

Tax cases are expensive and complex to investigate. Google probably has more money that the entire UK tax authorities. HMRC has to concentrate their efforts somewhere, and they concentrate on the people who are clearly breaking the law, or where they have whistle-blower evidence that laws are being broken.

That puts companies like Google at an advantage. They can operate at the edge of the law, exploiting loopholes, and then pay more if the laws are changed. And then, if we find out that they are not obeying the law but breaking it they make a deal with HMRC. See the deal Vodafone made where a huge tax bill was waived, if Vodafone paid a small part of the tax they had evaded. (http://www.guardian.co.uk/money/2011/dec/06/hmrc-tax-deal-vo...)

Dodging tax is only beneficial to these companies.

As to why they should pay: Apart from the fact that UK customers of Google buy UK ads for their UK potential customers using UK bank accounts and UK pounds and buy them from UK staff at Google's UK office (with a final 'close the sale' bit of paperwork done in Ireland for the sole purpose of avoiding tax in UK) - apart from that, Google makes use of UK schools and roads and police and fire departments and etc.

No one minds that Google pays less tax than they should. People only mind when Google goes to extraordinary lengths to avoid tax.

[figbucket]

They maybe right but it isn't equal, it's giving them a competitive advantage.

I agree with paying the minimum amount of tax but what does that actually mean? Eric Schmidt said he believes taxes should be at the base of economic activity (ie Ireland) but this is bullshit because it puts all the power in the hands of the corporations and incentivies countries to lower taxes to encourage corporations to move there.

Taxes should be based on where products are consumed so that each country taxes the exact percentage of profits generated from sales in that country. If in the UK Google sales amounted to £1b profit then £230m should be corporation taxes.

[mjw]

Firstly, if google sees its only responsibilities as "maximize shareholder value" and "obey the letter of the law" then perhaps they should officially give up on the "don't be evil" thing.

Secondly, it's disingenuous of them to ask the taxpayer to "just change the rules" if we don't like their avoidance, when they're funding the very regulatory capture which makes it hard for us to do that, via their investment in these schemes.

[roopeshv]

let me introduce you to: https://plus.google.com/+MattCutts/posts/4U2mpZ6hazU

don't be evil is not the same as do no evil

[pvnick]

Seriously, what's up with politicians recently, both in Europe and here in the States, hammering at successful companies for trying to minimize their tax liability? I specifically avoided saying "leftist" politicians because even the right is guilty (I'm looking particularly at that sniveling fool John McCain).

Expect the law to change, creating an even more complicated tax structure and destroying even more economic value while providing zero benefit to common citizens.

We should be looking in the opposite direction. Do away with large swaths of the tax code and ask less of the companies that support the global economy. Especially now that apparently the organizations that extract those taxes (specifically the IRS) have become political tools to harass those people whose politics our "leaders" disagree with.

[svenkatesh]

I agree with you about simplifying the tax code, but do not agree about reducing the tax-liability. Since these corporations benefit from society just like private individuals do, they should contribute to society (in the form of taxes) in kind.

[pvnick]

Why not reduce the tax liability as well for people like you and me then? It would be one thing if governments could be trusted to spend the money wisely, but so far as I've seen (other than obvious exceptions such as emergency services and libraries) that's rarely the case.

[svenkatesh]

I don't disagree with you.

I'm in favor of the tax-code placing an equal burden on everyone. I am against only corporations getting a free-pass though.

[dpatru]

Government is a parasite on society. Corporations and other private enterprises are what create good societies through mutually advantageous exchanges. In contrast, governments extract wealth by force or the printing of money (fraud) and use it to pay for things that no private person or corporation would pay for (war, prisons, bureaucracy, fat pensions, welfare for people who could work but don't want to, etc.)

[figbucket]

nonsense. Consider for a second all of the technology that corporations use in their products that were originally funded by government research projects like the internet(arpanet), world wide web (And others).

If government didn't have the scale to take on such projects a lot of these corporations wouldn't exist and a lack of research like those often government funded would just reinforce the status quo.

[dpatru]

The assumption you're making is that if government hadn't funded network research, then all of the engineers who worked on the Internet would have been hoeing turnips in the fields. As if only the government can create technology, and that without a government bureaucrat to direct research, we all would still be communicating via smoke signals.

The fact is, that if government hadn't been employing these engineers to create war technologies, our technology would probably be much more advanced and the world would have less war and be a much better place.

Whenever government employs people to do something, it necessarily keeps them from doing something else. This is well explained in chapter 4 of Henry Hazlitt's Economics in One Lesson (http://steshaw.org/economics-in-one-lesson/chap04p1.html) in taking the example of government spending for a bridge:

"The bridge exists. It is, let us suppose, a beautiful and not an ugly bridge. It has come into being through the magic of government spending. Where would it have been if the obstructionists and the reactionaries had had their way? There would have been no bridge. The country would have been just that much poorer. Here again the government spenders have the better of the argument with all those who cannot see beyond the immediate range of their physical eyes. They can see the bridge. But if they have taught themselves to look for indirect as well as direct consequences they can once more see in the eye of imagination the possibilities that have never been allowed to come into existence. They can see the unbuilt homes, the unmade cars and washing machines, the unmade dresses and coats, perhaps the ungrown and unsold foodstuffs. To see these uncreated things requires a kind of imagination that not many people have. We can think of these nonexistent objects once, perhaps, but we cannot keep them before our minds as we can the bridge that we pass every working day. What has happened is merely that one thing has been created instead of others.

[figbucket]

I'm not making any assumptions and certainly not assuming they'd be farm hands or that only government can create techology. It's all around us in the details.

The fact is that a businesses number one aim is to make a profit and that restricts most businesses to seeing no further than the end of their nose and limits their capacity for risky investments. When it comes to research, corporations should be looking for profitable applications of research before anything else because it's their number one aim. This means that a lot of research that doesn't have any clear practical application to a profitable model or doesn't meet a percieved profitable timescale is unlikely to be pursued.

I'm not denying that some companies do some groundbreaking research just that the inherint nature of corporations prevents them from taking risks that governments can take and which a lot of corporations capitalise on. Corporation and government funded research are two sides of the same coin. They both bring their respective benefits to society but one won't work without the other.

Most corporations would never have taken the big initial risks and government would likely never have practically applied the findings to a valuable product.

[ams6110]

Corporations are organizations of private individuals (either employees or shareholders), all of whom already pay taxes.