Google Boss: We Follow The Law On Tax

I think politicians are just upset that those tax law loopholes that were <i>supposed</i> to be just for their friends are now being exploited by those upstart interweb companies like "the google".<p>Our supporters paid good money for those exclusive exemptions, dammit. This is just making us look bad...

Of course you do dear, but you also exploit every possible loophole of inter-country commerce to make your bill as small as possible, regardless of the intention of the law in the countries involved or any sort of social contract.<p>Expect the law to change.

I see a lot of talk about "tax loopholes" but not any specifics about exactly what those loopholes are. It's easy to blame the law (a process which is mostly just a self-reinforcing talking point), but has it occurred to anyone that maybe neither the law nor Google are "crooked?"<p>You can take the most straightforward law and it still won't withstand a company putting all their IP in a tax haven and then attributing most of their revenues to their tax haven subsidiary. That's not taking advantage of a "loophole" that's taking advantage of the fact that: 1) accounting for revenue is inherently complicated, regardless of the tax laws, especially for service businesses and software services businesses at that; and 2) multi-national corporations must have some way to attribute income to the various countries in which they operate; it wouldn't be fair for every country to individually tax all the company's income separately.<p>It's instructive to try and figure out a tax law that would allow say the U.K. to reach some portion of Google's income. It's harder than it seems. For example, is it relevant that Google has customers in the U.K.? It shouldn't be--there is no sales tax on search services. If someone in the U.K. for example calls up their accountant in the U.S. for advice, as a general rule the accountant isn't liable for income taxes in the U.K. Is it relevant that Google has servers in the U.K.? Sure. But how relevant? How much of the value of Google's service derives from the servers in the U.K. versus the code and algorithms that were developed in California? I think most people would agree that the servers are just incidental--the real value of Google's services is the algorithms and data. So why should the mere existence of servers in the U.K. entitle the country to tax some substantial amount of Google's income?

Without specifics this is just so much hot air. Google's responsibility should not be to find ways to pay more tax. If there are tax loopholes it's the government's job to close them.

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.

Lets see, politicians have created a system so complex they themselves cannot understand it. Then they act upset that someone else has to that others advantage and attempt to vilify them instead of acknowledging that the system is too complex.<p>Sounds about right. You would think that they would instead focus on making a system even they could understand.

If my accountant paid a penny more taxes than I owed I would fire them. That politicians are attacking successful companies for trying to pay as little in taxes as possible is offensive and embarrassing. If you're unhappy with the law then change it. Otherwise shut the hell up and stop wasting the tax money you're complaining about.

Then it must be the law which is crooked.

Is "Don't be evil" just a joke or was it actually the motto of Google?