Google an Alleged Tax Tightrope Artist
April 5, 2011
We have no idea if this write up is 100 percent spot on, but we found the mere existence of the article fascinating. With revelations from a “real” journalist’s book suggesting that Google had internal squabbles regarding China, we wanted to capture this article. One never knows when one must look up such Google adventures as Foundem and 1PlusV. (Some topics are really tough to find in Bing.com and Google.com in our opinion.)
The story in question is “How Google Shifts Profits to Bermuda to Shrink Taxes by Billions.” The original article had a cute touch. Instead of an “s”, the folks at ZDNet (creator of the PostPCMag.com idea) used a dollar sign. How original. We must try that here in Harrod’s Creek soon.
While I’m not surprised, I’m amazed by the dexterity Google shows in order to avoid paying high taxes. The article purports to explain how Google shelters taxes to put more money in executive pockets. Google has its headquarters in Dublin, Ireland, which has a low corporate tax rate. But Googlers are clever. The Google wants an even lower rate, so the company allegedly shifts funds by charging an exorbitant administrative fee by its Bermuda subsidiary. In the end, Google ends up paying about 2.4 percent in corporate tax.
Hey, if Google can defy China, why not take a fresh look at tax rules?
The story makes another poignant remark about how communities want to have these large information technology firms in their towns to support local taxes. Obama is even pushing for these companies’ growth, considering them to be the economy’s saving grace. We noted this passage in the ZDNet story:
“That’s a highly optimistic view and one that’s not supported by the actions of those companies who seek the best deals they can get, and use every loophole to get out of paying a share of their profits to the communities where they live and work.”
Companies like Google are avoiding their social responsibilities, even though Google is a huge proponent of it. Ah, the allegedly clever, hypocritical Google. What’s not to like in a post PC world?
Whitney Grace, April 4, 2011
Freebie just like the legal and accounting advice that Google receives. Oh, lawyers and accountants charge money? My error.
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