Liberal dimwit Tim Fernholz demonstrates that when it comes to understanding tax law, on the best day of his life he couldn't find his fanny with two hands and a mirror. Not that that detail keeps him from spouting:
Does a "Dutch Sandwich" Make Google Evil?
It depends on what state you're in and the age of the farm animal.
Seriously, though, after reading this article about Google's evasion of $3.1 billion in tax obligations through legal loopholes, I got into a Twitter argument with Townhall.com's Kevin Glassabout whether this move is a violation of Google's famed "Don't be evil" mantra. Glass saw some virtue in Google's evasion, whereas I predictably thought Google should pay its fair tax burden.
First things first: Timmy, if you're going to discuss corporate taxation, it would serve you well to understand one of the most fundamental aspects of taxation: The difference between tax avoidance and tax evasion. Doing so will allow you to avoid being called out as a complete moron on the internet by a Certified Public Accountant.
Tax avoidance is completely legal. Taxpayers, whether individuals or large multinational corporations have the same obligation when it comes to paying taxes to the United States government:
That obligation is to pay the minimum required by law.
Taxpayers can, if they so choose, pay more than the minimum required by law, but that is a choice. There is no obligation to do so. In addition, tax planning to minimize taxes due to said legal minimum is perfectly legal.
Now, here's the point you and your equally dim conservative buddy don't get:
When tax avoidance crosses the line of legality and becomes illegal, it is not longer tax avoidance. It is tax evasion. Tax evasion is illegal.
Timmy, if you're going to have a deep discussion about tax law and morality, it'd do you well to get your basic concepts and terminology correct... If for no other reason, it might help you fool the adults in the room that you know what the Hell you're talking about.
Now, absolutely no one has suggested that Google has broken tax law. Nobody. In fact, the fact of the matter is this: What Google did is perfectly legal and acceptable under current United States tax law. And you know what? Google has absolutely no obligation to forego legitimate and legal tax minimization strategies. And what that means is that Google hasn't cheated the government out of anything.
That $3.1 billion was never due to the government. They have no right to it.
Period.
Why?
Because at no time was it ever the result of current tax law. What it was was the fantasy of some moron journalist who doesn't understand tax law.
Period.
You see, Timmy, in the real world, we adults work within the framework of tax law, not the framework of what some jerkoff liberal happens to think is "fair" at any particular moment.
And, Timmy, arguing that Google should pay $3.1 billion in taxes just to appease liberal bed-wetting types is moronic. Google has a duty to it's shareholders. I'm pretty sure that the majority of the company's ownership might feel that handing over $3.1 billion of their (not your) money to Obama, Pelosi and Reid for no particular reason isn't the best use of their (not your) money.
Does Ignorance Of Tax Law Make Tim Fernholz A Moron? No, it's just a symptom. He'd be a moron no matter what.
Posted by: aelfheld | October 22, 2010 at 07:44 PM
And besides, as Harry Reid pointed out recently, taxation is voluntary.
Posted by: Joe Redfield | October 22, 2010 at 07:51 PM
Ahhh, that brings a tear to my eye, Dennis. Now those were the days (10-15 years ago) when I used to be deeply into equities, and the money flowed like wine. My all time favorite was the index that offered up "social justice, while maximizing shareholder value." Long as the day, as the excitement built, "we're building a new economy for the poor with our investments" then short when the reality sets in.
Yes, I am a cruel capitalist that separate dfoolish delusionists from their money. I've reformed though... sort of.
Posted by: Allen | October 22, 2010 at 08:13 PM
That was a very emphatic, fact-free, non-examination of the difference between two things, neither of which are referenced. How very odd.
Posted by: Hal | October 23, 2010 at 06:56 AM
Hal -- If it's a legal loophole IT'S LEGAL TO DO. How much more examination does it need. Are these transfers accepted financial practice? If so, the conversation is over.
Nowhere does that article suggest that what Google is doing is illegal. Therefore, the rest of the article is nothing but mob-baiting, from a magazine published by NY's famous copter-commuting dietician in chief.
I also notice that you don't seem to see a problem, as that article points out, with the US having one of the highest corporate tax rates in the world.
Strangely, as someone trying to start a business in this economy, that pisses me off more than Google.
Posted by: richard mcenroe | October 23, 2010 at 11:42 AM
Hal-
What are you talking about? Are you telling me you refuse to process the facts I've stated without footnotes and citations? Get serious.
What Google did wasn't illegal. Those say what they did was "immoral" are selling something. It's that simple.
If the obvious factual problems with Bloomberg's article, and with Timmy's post eluded you, there really isn't much I can do for you.
Posted by: Dennis the Peasant | October 23, 2010 at 12:46 PM
You miss the point, Dennis.
The Government WANTS that money, therefore it has a right to it. QED.
If, y'know, you're a moron.
Posted by: mojo | October 25, 2010 at 10:48 AM
{Seriously, though, after reading this article about Google's evasion of $3.1 billion in tax obligations through legal loopholes, I got into a Twitter argument with Townhall.com's Kevin Glassabout whether this move is a violation of Google's famed "Don't be evil" mantra. Glass saw some virtue in Google's evasion, whereas I predictably thought Google should pay its fair tax burden}
So tax evasion wasn't referenced? Alrighty then.
I must say that although Google's owners might not think sending their money to the government is a good idea, they seem to be pretty good with the idea of us sending our money in.
Posted by: Tim | October 25, 2010 at 02:24 PM
And while we're at it, curse the evil capitalistic google for moving to arizona and paying all our green taxes that are going to pay for our millions of new green jobs. Curse them i say...
Posted by: Richard mcenroe | October 25, 2010 at 07:29 PM
But seriously Dennis, doesn't there come a point where someone should say, "You've made enough money?"
Posted by: Barack Hussein Obama | October 26, 2010 at 10:25 AM
They have too much money and we're going to take some of it because we know what to do with it better than you do.
Posted by: Hillary Rodham Clinton | October 26, 2010 at 10:26 AM
Crap, that should be NOT paying our green taxes... I'm useless without my breakfast sangria...
Posted by: richard mcenroe | October 26, 2010 at 10:29 AM
richard, those of us who had our evening cocktails understood your comment perfectly well.
Posted by: michael | October 26, 2010 at 11:39 AM
"...whether this move is a violation of Google's famed "Don't be evil" mantra."
Are you freakin' kidding me? You mean somebody above the age of four actually bought that PR bullshit?
Posted by: mojo | October 26, 2010 at 02:38 PM
So we need to find some way to sync up our drinking...
Posted by: Richard mcenroe | October 26, 2010 at 03:53 PM
Dennis, you keep missing the point.
A fair tax is giving the gummint what it needs... those Congressional salaries can't raise themselves...
Posted by: richard mcenroe | October 27, 2010 at 11:55 AM
"A fair tax is giving the gummint what it needs... those Congressional salaries can't raise themselves..."
Actually, I think they do just that, and Congress has to vote to freeze salaries.
Posted by: Tim | October 27, 2010 at 12:02 PM