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Tax Accounting Evil at Google? 261

Posted by CowboyNeal
from the passing-the-bucks dept.
theodp writes "In its annual report, Google said it's done no tax-accounting evil, but the search giant acknowledged that both the IRS and SEC are taking a look at the way in which it accounts for income tax. Google is one of a number of U.S. companies that have come under fire for allegedly practicing 'profit laundering', i.e., moving book profits offshore to evade millions and even billions in taxes to the country where it really operates. In past SEC filings, Google has credited its Irish subsidiary for reducing its effective tax rate."
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Tax Accounting Evil at Google?

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  • by Reverse Gear (891207) * on Saturday March 03, 2007 @12:35PM (#18218666) Homepage
    If Google had not done this then they would be pretty much the single exception from all other multinational companies.

    Here in Denmark we have this huge shipping company Mærsk or A.P. Møller as it also known.
    They have lots of other activities also, the company has always been somehow very attached to Denmark and many Danes are proud that Mærsk is a Danish company.
    The thing is that the government here in Denmark have been proposing to change how the taxing system works for companies. The general idea is to lower the tax rate but to remove many of the things that companies can withdraw from their incomes when taxes are to be calculated, in part to prevent what Google is being accused of doing here, namely putting all their income in countries where they have lot's of losses and expenses also.
    Mærsk have been threatening the Danish government that if these tax changes are done as proposed then they may be forced to move many of their activities to other countries. I see no evil in this, companies have to look at the bottom line and for most businesses generating income for their shareholders or who ever gets the money in the end.

    I would not consider Google to be evil if they did something similar to this, they would just be acting like pretty much any other multinational company does these days.
    I feel pretty sure the Irish doesn't see Googles way of doing their accounting as evil ;)

    If something has to be done about this, it can't be done at the national level, I guess that is also what some of these movements like Attack (spelled?) and other have been talking about. I doubt there is ever going to be any real changes in this any time soon, there are far to big interests at stake for countries and big companies.
    • Re: (Score:3, Insightful)

      by iPaul (559200)

      You hit the fundamental problem with tax systems on the head. Their complicated nature and rules allows the system to be gamed (or, in a sense, bugs to be exploited). Perhaps this is not by intent, just like complexity in code makes bugs harder to find. Under US law it is perfectly legal to interprit and use the tax law to your advantage. (If the IRS differs - they *might* let you know if you're one of the precious few that get audited.) In fact, if you don't exploit the law you're not doing all you ca

      • by Firethorn (177587)
        There are benefits to living in NY* and NYC that aren't enjoyed elsewhere. For one, there's not enough jobs in Florida/Alaska. For another, there aren't the services. I bemoan the lack of a good chinese restraunt in my area, for example. Still, my property taxes are only $120/year. It's a trade-off.

        The biggest problem for the people in NY is that they can't take their job with them. Corporations, not being individuals, can be in multiple locations at once. Moving where they pay taxes from one locatio
        • Forgoing the income tax for a sales tax is a pretty bad idea.

          First, the income tax is progressive. This would be impossible to achieve with sales tax. The only people that would benefit from a "flat" tax (sales or income) are those at the highest tax brackets. In order to replace the income lost from dropping taxes on the top 5%, taxes would have to be raised on the bottom 50%.

          Second, a sales tax puts a disproportionate burden on the lowest income families. Those with low incomes--even up to $50k/yr for a s
          • I hate to break it to you, but the complexity of tax law enable the very wealthy to pay less of their taxes, putting more burden on the lower and middle incomes. How many minimum wage earners do you know with "tax shelters"?
          • by jcr (53032) <jcr.mac@com> on Saturday March 03, 2007 @03:31PM (#18220140) Journal
            First, the income tax is progressive.

            Hook. line, sinker, rod, reel, basket, boots, and copy of Angling Times.

            John Kerry's exceptionally rich wife pays about 10% of her income in taxes. What's your rate?

            -jcr

            • by Stickerboy (61554)
              >>First, the income tax is progressive.

              >Hook. line, sinker, rod, reel, basket, boots, and copy of Angling Times.

              >John Kerry's exceptionally rich wife pays about 10% of her income in taxes. What's your rate?


              I'm sorry, were you arguing against an income tax? It seems to me the problem with John Kerry's wife and her taxes isn't the income tax, it's the numerous loopholes that the rich politicians have put in the income tax for the benefit of themselves and their rich buddies. Isn't it ominous tha
          • What you fail to fully comprehend is that the very wealthy enjoy the ability to decide whether or not their cash flow is expressed as "income" at all. Be that as it may, I don't think sales taxes are the best solution. Property taxes are. They cannot be dodged in any meaningful way, and the rich tend to hold onto gobbles and gobbles of property.

            C//
          • Sigh....

            Should have known this would come up. For the record, I support the fairtax [fairtax.org] idea. It's also progressive, though maybe not as much as currently. Sure, there are some issues with it, but I believe those issues to be less than the issues with the current system, which is massive fraud, complexity, and inefficiency. I happen to believe that it shouldn't take more than an hour for the average family to calculate their taxes.

            In summary, the only people that want a sales tax are those that don't unders
        • The corporation is a separate entity from its owners. If the corporation kills 1,000,000, or goes bankrupt, the shareholders are not held liable (except in a few rare cases that hardly ever apply to large, publicly traded companies). So, when a corporation makes money, it pays taxes as a separate entity under the law. Proceeds paid to its investors are payments to distinct entities under the law, and taxes are owed by those entities because they (hopefully) made money on their investment in the corporati
      • NYC is the financial capital of the world or maybe it was [timesonline.co.uk]. The rest of the state has already been decimated as key companies like Kodak and Xerox move out of state and wither away. NYC's politicians already sucked the rest of the state dry and its only a matter of time before they go down the tube with us. Companies aren't just outsourcing to other countries, many are just moving to other states. Up here in Rochester, the University of Rochester is now our biggest employer and the government is the only sec
        • by iPaul (559200)

          The point being is that the taxes in NYC outweight the money to be made in NYC. Until the advent of digital cameras, I believe Kodak did very well in upstate NY. Both Kodak and Xerox benefitted from (what I understand) are good schools and a local University. I don't think NY taxes had anything to do with the advent of digital photography (and buggy-whipping of film), or the lack of business accumen at Xerox.

          I think that we need to partake in the global economy but we can't just tell a city like Roche

          • The decline started happening long before "digital" was on anyone's radar outside of the field. Back around 1996, Kodak shipped my grandpa's job as a film cutter out of the country. Kodak and Xerox aren't the only companies who started bailing on Rochester long before the dotcom era but they're the most prolific two. As it is today, the towns and counties around here are giving multiyear tax breaks to companies willing to hire as few as a dozen people. The local paper recently ran a story bragging about how
            • Re: (Score:3, Insightful)

              by iPaul (559200)
              What you're describing is not unusual. When times are good no one looks at the books much all sorts of crud gets through (and that is definitely part of the problem). However, when communities loose large employers their deficits and budgets go up, and it is usually driven by much higher levels of spending for social services. Food stamps, CHIPS, unemployment insurance, emergency fuel services, state portions of medicare/medicaide, unreimbursed medical at state/county hospitals, etc. All of these are dri
              • The Rochester area sounds like it was faced both by a change in technology and the effect of globalization. If the state of NY had slashed taxes paid by Kodak, I don't see how it would have materially changed the outcome. US workers are still paid 100's of times more than some of their Asian counter-parts. States like South Carolina are loosing jobs to overseas factories not because of South Carolina's high taxes and generous benefits (they have neither), but because the same t-shirt can be produced oversea
        • by nomadic (141991) *
          NYC is the financial capital of the world or maybe it was [timesonline.co.uk]. The rest of the state has already been decimated as key companies like Kodak and Xerox move out of state and wither away.

          New York City's economy is going quite strong, thanks.

          NYC's politicians already sucked the rest of the state dry and its only a matter of time before they go down the tube with us.

          That's a complete and utter fabrication. New York City pays substantially more in taxes than it receives in funding. If y
          • That's a complete and utter fabrication. New York City pays substantially more in taxes than it receives in funding. If you're living in New York State but outside NYC, you're not pulling your own weight and you're being subsidized by NYC. Furthermore, by population NYC residents are significantly underrepresented in the NY legislature.

            If NY is so autonomous, please join me in asking for the state to be divided into two states. The triangle contained between Sullivan County, Albany County and Long Island

      • by RevMike (632002)

        I'm tired of companies and individuals of claiming that they'll go "somewhere else" if there's a tax hike in their country. In the US we have a very low tax rate over-all, so I'm not exactly sure where these companies or individuals would go.

        There is more to this than it may seem. Under US tax law, a US company can be taxed on all its operations, both those in the US and those outside. Many other countries, however, only tax a multinational on its domestic operations. Why should a company like Ford or

        • by iPaul (559200)
          It's probably likely that the tax law needs to be revisited so that if you make 75% of your income from US operations, you pay taxes to the US on that 75%.

          But, there's a big difference between the US and overseas. We are much less restrictive of how foreign corporations can operate in the US. For example, China often requires you to partner with a Chinese company to form a joint-venture. Europe makes firing damn near impossible. Closing a factory in France can shut down Paris with protests.

    • That's part of their schtick. They aren't like other corporations, or so they say.

      Turns out when money is on the line, oh yes they are just like other corporations.

      So if they're like everybody else, why do they deserve geek community support?

  • definitions (Score:4, Insightful)

    by TheSHAD0W (258774) on Saturday March 03, 2007 @12:39PM (#18218704) Homepage
    Why exactly do you define avoiding taxes as "evil"?

    Unlawful, certainly. But evil?
    • Re:definitions (Score:5, Insightful)

      by Planesdragon (210349) <slashdot@castles ... s ['els' in gap]> on Saturday March 03, 2007 @12:44PM (#18218730) Homepage Journal
      Why exactly do you define avoiding taxes as "evil"?

      Because the taxes that cash-rich google doesn't pay are paid for by the rest of us.
      • Re:definitions (Score:5, Insightful)

        by chill (34294) on Saturday March 03, 2007 @12:46PM (#18218750) Journal
        If you think, for one minute, that if Google paid every last dime it could in taxes without trying to structure business to avoid them, that YOUR taxes would go down, you're on crack.
        • Re:definitions (Score:5, Insightful)

          by iPaul (559200) on Saturday March 03, 2007 @01:12PM (#18218940) Homepage
          Maybe in the short run you're correct, but in the long run I'm afraind you're wrong. Sure, over the next couple of years it won't affect your tax rate. However, there are essentially three parts to government spending. The first is interest on the debt - which we have to pay or else we'll never be able to borrow a dime again without paying ridiculous interest rates. A lot of people think this is something we could default on since they believe the fiction that "it's money we owe ourselves." However, we borrow a significant chunk from overseas - so not paying it is actually off the table. The second are obligations that are a matter of law - like social security. If we wanted to reduce our social security obligations we have to pass a law stating that you and I won't get our promised benefits. That's hard to do politically. Finally, there are discretionary items, like the military. We do have some wiggle room there, but not a tonn.

          Okay, all of this is paid for by incoming taxes. If the taxes aren't sufficient to cover the expenses, then we borrow, adding to the debt. So, the amount we pay in interest on the debt goes up, further reducing the ability we have to make decisions about how much money to spend on which program. Eventually, if there's no fiscal discipline and companies are allowed to avoid paying taxes, the rest of us will have to pitch in more money. So, in the short run, you're right in that your taxes are not a function of Google's taxes. However, in the long run, the more companies game the system to avoid paying taxes, the more likely we will have to raise taxes on individuals in order to meet payment on the debt and obligatory expenditures. In addition, these companies benefit from operating in the US. They are protected by our military, when their CEO has a heart attack the ambulance comes an picks him up, and the police stop the "G-8 protesters" from throwing trashcans through their plate glass windows. They use the same public services we all use, shouldn't they pay their fair share?
          • You're exactly right, but it's worth pointing out that the problem is not just with businesses. Everyone that reports less than their full earnings (especially tipped employees or those paid "under the table") is taking advantage of those of us who do. /Yes, I think the size and role of the government need to be slashed, tax evasion isn't the answer
          • by chill (34294)
            Other options to consider rather than raising personal income tax:

            1. Simplify the tax code and close loopholes like the ones that allow Google and other mega-corps to move things around and minimize taxes.

            2. Spend less.

            History shows that taxes rarely, if ever, go down as a net. Once a politician has your money, they don't give it back. They get addicted to the spending and when the time comes, lo and behold there are more "necessities" that can't be cut from the budget. Necessities that were lived withou
            • Of course they would still spend the extra, but in doing so, I would get more value for my contribution. I'd rather have the cash back, but I'll take what I can get.
            • by iPaul (559200)
              I agree. I think the best thing we could do in this country is simplify the tax code. Think about the money that we spend in complying with it. That, in itself, is a hidden tax. I actually think that a Repubican controlled legislature and a Democratic president is the best combination to try to keep government in check. I think that division of power and opinion is the big reason we ran surpluses in the late 1990's. (There's nothing wrong with a surplus - it serves to brake the economy just like raisi
            • by JVert (578547)
              So by your logic google is saving the government by avoiding taxes?
          • Of course, there's the following counterargument: suppose companies like Google paid more taxes. Then they couldn't afford to pay as many people to work for them, so there would be fewer people paying taxes. In addition, there would be fewer jobs.
      • Because the taxes that cash-rich google doesn't pay are paid for by the rest of us.

        This is a double logical fallacy, and a red herring. First, you are presuming that the government isn't already trying to get the maximum amount of taxes from us anyhow. Second, you are presuming that the government would actually spend that money to our benefit. Finally, "cash rich", is a red herring. The government never has taxed net-worth and never will, they tax income. That means that the business man who busts hi

        • by Silmaril (19015)
          The government never has taxed net-worth and never will

          Inflation is essentially a tax on net worth. And governments are the sole cause of inflation in their fiat currencies [bloomberg.com].

      • by mc6809e (214243)
        "Why exactly do you define avoiding taxes as 'evil'?"

        Because the taxes that cash-rich google doesn't pay are paid for by the rest of us.

        That's like being mad at your neighbors for installing a security system that causes your house to be burgled instead of theirs.

    • Re: (Score:2, Insightful)

      by Threni (635302)
      > Unlawful, certainly. But evil?

      Perhaps evil is a contentious word, but if you approve of the uses to which at least some tax money is put - education, welfare, trading standards, hospitals, public transport etc then by deliberately evading that simply to make a bigger profit could be argued to be immoral. On the other hand, not paying taxes to some governments could be seen as the only moral thing to do, given their poor track record of sponsoring terrorism, for instance.

      • Re:definitions (Score:5, Interesting)

        by Original Replica (908688) on Saturday March 03, 2007 @12:53PM (#18218808) Journal
        While I doubt that this is a case of Civil Disobedience, you are correct it's not evil. But it's so much fun to label any non-wonderful Google practice as "evil" because of their "do no evil" ideal.
      • Grandparent said avoiding. You said evading. Those words are not synonyms.
      • by TheSHAD0W (258774)
        I suppose that means it's not evil if I steal your wallet, but give all the money in it to the Salvation Army?

        Taxation is theft. Even if the government is dedicated to giving that money towards good causes, they're still taking it from you at the point of a gun.
        • It's kind of borderline. The goodness of an action is exactly the goodness the happiness it inspires. To a first approximation, taking money from the vaguely middle class and giving it to the poor is a net beneficial action; the harm only comes in when you take into consideration the "externalities" of the unpleasantness of living in a society where money is taken from people willy-nilly. The externalities of taxation are somewhat different from the externalities of common theft.

          Of course, the word "evil" d
    • Re: (Score:3, Insightful)

      by Zadaz (950521)
      Avoiding taxes is perfectly lawful. It's what tax shelters are all about, and why good accountants get big bucks.

      As far as I can tell, what the government calls "Profit laundering" is perfectly legal. It's no different than my corporation paying out year end bonuses so we don't have to report a profit. (It's not my fault if the bonus getters want to reinvest that in the company.)

      If the US wants to keep its tax revenue they're going to have to be more competitive. The only thing that's keeping many large
    • by Da Fokka (94074)
      It depends. Just check the Evil bit [ietf.org].
    • by drgonzo59 (747139)
      This all started with Google's claim of "do not evil". Sure, it sounds nice, except that we don't clearly know what "evil" means. In this context it seems to mean that "making a legal profit" is "evil". So in that respect Google is "evil". Except that I don't agree with this particular definition of "evil". In other words, my "evil" is not necessarily your "evil". Because I am sure the Irish don't mind at all having Google report all the profit in their country. So what is "evil" for us, all of the sudden i
    • by jlarocco (851450)

      Well, please enlighten us, what is "evil"?

      Google's motto is (was?) "Do No Evil". Which most people took to mean they would actively try not to behave like every other giant, rich, corporation.

      So far, every time Google has done something questionable, like censoring Chinese search results, or evading taxes (legally or not), the Google fanboys of Slashdot have been quick to point out that Google isn't being evil, they're simply behaving like every other company. Google isn't out sacrificing virgins t

      • by Atzanteol (99067)

        Which most people took to mean they would actively try not to behave like every other giant, rich, corporation.

        Which is retarded. Seriously. Most corporations aren't *evil*. Avoiding taxes (not evading) is not *evil*. We all do it. I drive to NH to purchase some items due to no sales tax, I claim what I can on my income taxes to keep more of my money. Am I evil? Now, if Google is funneling money to African guerrillas to mine diamonds, then you'd have a point...

        The definition of "evil" on Slashdot

        • by jrockway (229604)
          > "Do no evil" does not mean "Do things Slashdotters like."

          Hey, I like it when big companies tell the government to fuck off. Eventually, the government will run out of money, and they'll be forced to cut back on bullshit like "The Department of Homeland Security", "The War On Drugs", and "Operation Liberate Iraq OMG commie terrists". Less income will force the government to downsize, and the effects on society as a whole will be wonderful.

          google++.
    • Pfft. imo google is less evil because of this because it's sticking it to the man. That's like getting mad at them because they found a way to play/hide their DS under their desk while watching the phones or found a way into their boss' private bathroom.
  • FairTax! (Score:3, Interesting)

    by XanC (644172) on Saturday March 03, 2007 @12:48PM (#18218768)
    Support the FairTax [fairtax.org], bring corporate headquarters back to the US and end this ridiculous waste of everyone's time.
    • Support the FairTax, bring corporate headquarters back to the US and end this ridiculous waste of everyone's time.

      I'm cautiously in favor of replacing the income tax with a national sales tax (though, it's not the overwhelmingly RAH RAH GREAT IDEA!! that proponents sell), but it'll never, ever happen. Because: 1) You would shut down a huge number of businesses (e.g., tax accountants), 2) they'd have to fire a large number of Federal Employees, 3) it's not progressive, therefore a huge segment of society

      • by XanC (644172)

        I agree with the sibling AC, and also wish to point out that the FairTax is the only plan which completely removes all tax obligation from the poor.

        Even when their income tax rate is zero, there's plenty extra they're having to pay for everything because of the income tax on everything else. When it's a sales tax, after their prebate, they have paid $0 in tax.

        • Re: (Score:3, Insightful)

          by karmatic (776420)
          When it's a sales tax, after their prebate, they have paid $0 in tax.

          While this is true, the FairTax goes a step further (as far as progressive taxing goes) - if you are below the poverty line (or if your spending on new items is below the poverty line), you actually end up with cash in your pocket from the FairTax.

          Personally, I'm not in favor of most government-ran welfare, as it can often provide incentives to _not_ work. Doing better financially typically results in less eligibility for financial progra
    • 20 years ago, it made sense. If you move to a sales tax approach (basically a vat like EU uses), then you must also tax the net. Otherwise, you will encourage all major sales outlets to move offshore as well.
    • by nomadic (141991) *
      Support the FairTax, bring corporate headquarters back to the US and end this ridiculous waste of everyone's time.

      ...because when it comes to a 13 trillion dollar economy and the well-being of 300 million people, let's gamble on instituting dramatic systematic changes that look good on paper to a few people but have never been proven in real life.
    • by AK Marc (707885)
      I'm not a fan of regressive taxes, so I can't really support the unFair Tax. I've tried to talk to people at unFair Tax (back when I thought it could be a good idea), and they all come across as insane people. A simple question about why the poverty level and not 50% of it or 200% of it, and I was accused of trying to sabotage unFair Tax. If they can't even discuss how they came to the numbers and what the economic effect of different choices are, then it's obvious that they have no idea what the real wo
    • by Dutch Gun (899105) on Saturday March 03, 2007 @03:16PM (#18219956)
      Does anyone think that perhaps corporations shouldn't pay taxes at all? In thinking about basic economic realities, I've been leaning in this direction. It sounds like a bit of a radical idea on the surface, but it's always seemed to me that taxing a corporation is really just an indirect tax on anyone who uses that corporations's services or products. In other words, they'll just raise prices to the point that they're making a profit, and thus simply pass along any increased tax burden to the consumer.

      It's the same sort of hidden tax as the idea of having employers pay for half of your social security benefits. Where do you think the extra revenue comes to do this? Higher prices on products and lower wages. The government loves to obscure the true source of taxes, especially when they can make it appear that someone else is really paying for them. These are two good examples.

      Am I missing something in my logic here? I haven't really heard anyone else talking about this (although I haven't looked all that hard). My suspicion is that this would never fly, if only for the huge political target you'd make yourself for even bringing this up.
      • by XanC (644172)

        You're not missing a thing; it's one of the big reasons the FairTax makes sense: corporations don't really pay taxes, they pass them along to people. There's a whole chapter on this in the FairTax book [amazon.com], I really suggest you read it; it's at least interesting even if you don't end up agreeing (but I think you will).

        That's a non-referring link, but I don't know what I can chop out and have it still work, so I left it all in.

  • by jorghis (1000092) on Saturday March 03, 2007 @12:50PM (#18218782)
    The government isnt evil for collecting taxes as above posters are claiming.

    Google isnt evil for using a perfectly legal accounting system that works within the bounds of the law to pay as little taxes as they can.

    Everyone takes as many deductions as they are legally allowed on their tax returns. Would we think that people claiming an exemption for having a kid are 'evil'? Really not much difference.
    • by Firethorn (177587)
      I remember an issue like this coming up somewhere, I think it was California. So they set up a system where you could pay *extra* taxes if you felt that you weren't paying enough.

      The year's take for that system was under $1k. $23 keeps coming into my head.

      *Everybody* pays the minimum tax they can. The only cases where they don't is some people will only take some of their more questionable deductions as a form of insurance. That way they have something to fight back with in case an audit happens and dis
  • Why this isn't evil. (Score:3, Interesting)

    by 955301 (209856) on Saturday March 03, 2007 @01:10PM (#18218920) Journal

    Currently the US foreign policy is driven by warmongering and profiteering. The US military has been outsourced to corporate mercenaries and little regard is given to the well-being of the actual force.

    We're about to start a navel and air war with Iran, we're ignoring Darfur, we're disregarding our own people in their time of need (Katrina) and we're supporting countries on questionable moral ground.

    If anything qualifies as evil, all that does. So if Google is avoiding paying taxes to a government which executes such evil behavior I'd say they're living up to their mantra.

  • by kodyjoe (973095)
    Google's employees and founders have been unflinchingly supportive of Democrat candidates and policies. Those candidates and policies generally favor higher tax rates and oppose tax cuts "for the rich", and favor greater government spending on social programs. But now they're going out of their way to launder their money to avoid those same taxes. Is it evil? No. Taxes are evil. Is it hypocritical? Yep. You get to say all the right things to your pinko NoCal, silicon valley buddies, while avoiding t
    • by iPaul (559200)
      I think part of it has to do with the "business culture" we've created in this country. Google hires accountants and lawyers who've worked at other successful companies where this is "how it's done." I think the reason we aren't more appalled at behavior like this is we've come to believe what's "good for business is good for America." Yet, we forget why we allow public incorporation in the first place. We create a better business climate because the country as a whole benefits from good wages, employme
  • by mtraskos35826 (880419) on Saturday March 03, 2007 @01:17PM (#18218974) Homepage
    Maybe if Google didn't have to pay 40% of its profits in taxes, they wouldn't have to spend millions on accountants to move money. We have all seen the fantastic things that Google has done with the money they have, just think of what they could have done (4D Google earth, Google desktop that doesn't take up 1GB, chocolate pudding that tastes as good as Bill Cosby thought it should taste... who knows?) if the government didn't rape them for being successful.
    If anything, we should be proud that Google doesn't put money into the vast wasteland of government spending.
    --------
    - Seconds per year ~ Pi * 10^7
    • I do not think it means what you think it means.

      You may or may not have something worthwhile to say in your post. However, your use of the word "rape" leads me to believe that you have no concept of the meaning of that word.

      Paying federal income tax code may be burdensome, but it does not involve forced sexual penetration. Might I suggest, if you believe that the services provided by the US government are not commensurate with the taxes they collect, you might use the words "rob", "steal", or "swindle".
  • There should be a US law that a company should either operate fully inside US or fully outside. If they are not paying US taxes, they shouldn't be taking advantage of US public infrastructure, US education system, US legal and security protection... Countries pass a set of laws that only work together as a whole. A given company should be forced to live with the full set just like a common citizen, rather then cherry picking what they want. If you pay lower taxes, you can not expect as much services from th
  • by gmcraff (61718) <<moc.oohay> <ta> <ffarcmg>> on Saturday March 03, 2007 @01:29PM (#18219084)
    As told to me by my ex-IRS tax accountant:

    TAX AVOIDANCE is a patriotic thing to do. It does no good to give the government money in excess of what it needs to do its job, and what it has been lawfully authorized to collect.

    TAX EVASION is illegal. That's what they got Al Capone on when then couldn't nail him for any other crimes.
  • Axis (Score:3, Funny)

    by offlerthecrocgod (563497) <offlerthe&hotmail,com> on Saturday March 03, 2007 @02:05PM (#18219366) Homepage
    Now that Ireland has joined the Axis of Evil they can soon expect to be liberated by the US. Yumm, Taco Bell here I come.
  • U.S. Tax Code (Score:5, Interesting)

    by Talisman (39902) on Saturday March 03, 2007 @02:42PM (#18219684) Homepage
    I know a few tax lawyers. The tax laws of the U.S. have grown so complex over the decades that it has become literally impossible for one person to know them all. Tax law firms have lawyers dedicated to specific portions of the tax code.

    When you have a set of rules as ridiculously long as the U.S. tax codes, it basically makes it impossible to comply 100%, because no matter what you do, there will be a segment SOMEWHERE in that massive wall of text that you unintentionally violate.

    The novelty about the deeply complicated tax laws is that loopholes abound - it may be the specific reason the government maintains its complexity.

    Google trying to minimize its tax burden is just good business. That they seem to have done it in a way that is suspect doesn't mean they intentionally broke a law, it probably means they did it so well that the IRS isn't sure it's legal or not.

    But again, with tax codes as complex as ours, it will probably fall into the realm of ambiguity so that it can either be legal OR illegal, which is yet another governmental advantage of highly complicated tax laws.
    • Indeed. They (congress, whoever is in charge) should prove that the tax code is self consistent :-)
  • Google THIS. (Score:2, Insightful)

    by UncleTogie (1004853) *
    I, for one, welcome our new tax-avoiding overlords....

    or not.

    When driving to the "Googleplex", Google's employees drive on public roads. They drive on roads made safer by law enforcement. They're defended by a brave group of Americans that volunteered to give their lives when necessary. If they have an employee that's been in a car accident, many time a city/county EMS unit will take them to the tax-funded public hospital. If there's a fire at the Googleplex, the local fire department will respond.

    Wh
  • Does it cancel out?
  • There was a time when I would have been far more critical of a company like Google going to these lengths to dodge taxes. However, that was before I started my own business.

    Now I get the enjoyment of having to deal with a mind-blowingly complex tax system, both on the State and Federal level. Complete, reliable information covering everything I need is difficult to find and even more difficult to wade through. So I had to get an accountant.

    Then comes the joy of having hard-earned money go to the government.

Thufir's a Harkonnen now.

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