Google and Other U.S. Companies Dodge Billions in Taxes, Bloomberg Reports

[RamboLiberal]

Source: ABC News/Bloomberg

Google and other U.S. companies are using legal corporate tax loopholes to avoid paying the U.S. Treasury billions of dollars in corporate income taxes every year, according to a new report by Bloomberg News.

"Over the last three years, Google has saved over $3 billion," said Bloomberg reporter Jesse Drucker, who broke the story.

Google, with its informal motto of "don't be evil," employs a strategy called the "Double Irish" to help it pay a tax rate of just 2.4 percent on overseas profits, according to Bloomberg. The corporate income tax rate in the U.S. is 35 percent.

How does Google do it? Even though the company is headquartered in Northern California, it licenses some of its intellectual property overseas. Any profits made outside of the U.S. never get taxed in this country.



Read more: http://abcnews.go.com/WN/google-loophole-dodge-corporate-taxes-bloomberg-report/story?id=11939752

[HCE SuiGeneris]

1. "Don't be evil" ? Doublespeak?

Chocolate rations for everyone!

[SpiralHawk]

11. "I did not have taxes with that entity, um, US government." - The Google (R)

"Smirk." - The Google (R)

[Confusious]

2. What else is new?

This has been going on for 20 years or more. Google isn't the first, won't be the last.

[Stumbler]

3. Exactly

[Occulus]

4. Perhaps it's time we were serious about closing these loopholes.

Some people describe a deliberate avoidance of the payment of taxes as a form of theft from the People.

Why haven't we started jailing executives for this shit?

[melm00se]

5. My neighbor

said last night:

why not just match what other countries tax their corporations' profits?

Did a bit of reading and corporate income taxes:

on the federal level, make up ~12% of the total federal receipts source: http://www.taxpolicycenter.org/briefing-book/background/numbers/revenue.cfm
the oecd average corp income tax rate is 23.9% (the US federal rate is 35%) source: http://www.oecd.org/document/60/0,3343,en_2649_34533_1942460_1_1_1_1,00.html#cci

and without doing some complex modeling, i wonder how much of a change in corp tax receipts would happen if the federal corp tax rates were closer to the international average?

[customerserviceguy]

9. Because it's legal

There's plenty of stuff they do that's not, that we're already not jailing them for, anyway.

Perhaps creating a one-year window to bring in the profits at a significantly lower tax rate might just flood our economy with money, it would be like a second stimulus, without the borrowing from China.

[harmonicon]

18. Thank you for pointing this out.

I think these sort of things are red herrings to make people angry about the legal stuff so that they're distracted from all of the illegal shit that goes on at some companies.

[rfranklin]

24. But those profits would be hoarded in corporate bank accounts or...

more likely, used to pay unrecedented bonuses in the hundreds of billions of dollars.

[customerserviceguy]

27. Even if they were used to pay bonuses

Those bonuses would be subject to US Federal tax rates, and whatever was left over has a reasonable chance of being spent in our economy.

Frankly, most of the profits would wind up as dividends for ordinary US taxpayers, who would be somewhat likely to spend them. If they're left outside the country, that can't happen.

[indimuse]

6. KNR! n/t

[fasttense]

7. People who quote the US corporate tax rate at 35 percent are quoting a myth.

No corporation pays that rate. Most US corporations pay between 2% and 3%. It's all the loopholes that allow them to skip out on almost all taxes. In many cases, a corporation pays absolutely nothing in taxes, despite making record profits, and they get a tax refund. Talk about welfare for the rich. Our Plutocracy has made sure that only the little people pay the largest portion of taxes.

[melm00se]

12. objective link to support your claim? n/t

I put up my source (OECD.org) where is yours?

[RUMMYisFROSTED]

19. One of many:

http://www.reuters.com/article/idUSN1249465620080812

[Thor_MN]

20. I paid more taxes than Bank of America, Citibank and GE combined last year.

So did you. They talk more about Tax Assets than Tax Liabilities. I assume that they did not receive refunds, but booked credits that they can use over the next 10 years to offset and taxes they might owe. So that mean old 35% tax rate for these major corporations means that they each paid $0 in taxes for 2008 and claimed billions in writeoffs for future years. Hell, you couldn't find a lottery payout equal to a tenth of what any one of these companies claimed in tax credits last year.

(http://media.corporate-ir.net/media_files/irol/71/71595/reports/2009_AR.pdf)
(http://www.citigroup.com/citi/fin/data/ar09c_en.pdf)
(http://www.ge.com/ar2009/pdf/ge_ar_2009.pdf)

[bulloney]

8. If a company uses our infrastructure to make money, it should pay its fair share of U.S. taxes.

I hear this line all of the time about how these corporations create jobs. But let's put it in perspective. They're not in business to create jobs. They're in business to make money. They need to hire labor to help them make that money. If they could make this money without hiring human labor, they'd do it in a heartbeat.

These pro-corporate stooges make it sound like corporations are in this noble field of employing people. The people running many of these corporations would sooner step on people like a bug on a sidewalk than to provide them a job to make a living.

[JDPriestly]

21. We should encourage them to take a stand.

What would these corporations prefer? A value added or sales tax on each item that is not a necessity (food, medication and children's clothing being the necessities) they sell here or pay a higher tax on all income earned defined as all money received here.

The problem now is in defining where money is earned.

Is it earned where the license is held? Or where the buyer resides or does business?

[No Elephants]

10. If a loophole exists, using it is fine. Answer is: Eliminate the loophole.

[Steerpike]

13. some things never change

same old shit...

[Enthusiast]

14. How many times have

we heard Republicans say, "The U.S. has the highest corporate tax rate in the world."?

This proves to me that the GOP is the party of the corporation. As if we needed additional proof.

[xchrom]

15. this isn't new news -- but obama is going to visit google isn't he?

why pick google out of a herd?

[Demeter]

16. to Add Insult to Injury--These Corporations Want to Bring Profits home--TAX FREE!

They are lobbying in Congress--and this tax giveaway has happened before...

[Thav]

17. Corporations...

Should not pay taxes, ever. They should not be bound by any government regulations. They should be unhindered in their business, through labor and safety regulations, and silly things like minimum wage laws.

Dear God I wish the above were a fabrication. There's a small movement called "Constitution in Exile" which believes the government is doing a ton of things that wasn't originally set forth in the Constitution. There's a small portion of that movement who believe the above. Wouldn't that be a terrifying day?

I read a great article on this within the last two weeks, but I can't find it. Bleh.

[ProfessionalLeftist]

22. Most corprats are teh suck. n/t

[Thor_MN]

23. And the Republicons want to reduce corporate taxes rates...

They are screaming it in their shrill voices and the idiot conservative masses are eating it up. Of the small business owers amongst them (the only ones paying anywhere near the full 35%) piss and moan about taxes, the idiot suckups that think they have a chance of becomeing wealth agonize with them and the utter morons that follow them with absolutely no chnce of ever doing anything other than working for someone else just blindly trail along, echoing whatever they hear. Meanwhile, the big corporations are paying no taxes at all...

[GeorgeGist]

25. It seems to me ...

that being persons, corporations should be subject to PERSONAL income tax laws.

[Heywood J]

26. "Any profits made outside of the U.S. never get taxed in this country."

Which is ironic, since the US is one of only three countries to tax the income of citizens that live abroad.