Schmidt On Why Tax Avoidance is Good, Robot Workers, and Google Fiber 780
Bruce66423 writes "Eric Schmidt said that a £2.5 billion tax avoidance 'is called capitalism' and seems totally unrepentant. He added, 'I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate.' One must admit to being impressed by his honesty." Schmidt also says that if you want a job in the future you'll have to learn to "outrace the robots," and that Google Fiber is the most interesting project they have going.
Question (Score:5, Insightful)
How many people reading this intentionally pay more tax than they are strictly required to?
Re:Question (Score:5, Insightful)
This is spot on. No one would.
Here's the problem: Those laws/rules/loopholes/allowances etc were created by the money influences which are benefiting from them.
So if tax policy were a naturally occurring thing, I would say "yes, let's take advantage of our knowledge and understanding of nature!" But it's not and these tax avoidance structures haven't always been there.
The government did not change the rules without cause. Find the cause and you will find the culprits.
Did Google help to create the rules? Not likely... the rules were in place, most likely, before Google rose to power.
The 'news' and subsequent inquiries seem to want to focus on the tax [non-]payers. Ostensibly to determine if they did anything 'illegal.' I'm willing to bet they have not done anything illegal. The real problem and where the focus should be is on the law.
Re:Question (Score:5, Insightful)
I disagree. I think they are focusing on exactly that; abuse of the tax system. The current crop of GOP senators are very business friendly, and money plays a larger role in politics than in any time in the past. I can understand why Google takes this approach, but to appear unapologetic is just rubbing salt in the wounds.
Take individuals for instance. They get a very specific set of deductions, and are expected to take them. Because of the special interests and years of corruption in congress, we have businesses making billions in profit, and paying almost nothing in taxes. It may be legal, but it doesn't make it right. The system is geared to give every benefit to a business, and none to middle America.
What they are highlighting is not the fact that is illegal (it's not), but rather that it's unfair, which it is.
Re:Question (Score:5, Insightful)
Why pick on the GOP? They are certainly not alone. The Democrat's current position is focused on "rates", which is clearly anti-reform. As long as the tax code is complex, it will favor those with the resources to exploit the complexity.
My personal opinion is that we should eliminate the corporate tax rate, removing the shenanigans altogether. Make up for this by making dividends and capital gains taxable as income.
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The GOP has always been representative of Business. It simply is what it is.
Not that easy in reality (Score:4, Insightful)
As long as the tax code is complex, it will favor those with the resources to exploit the complexity.
The fundamental problem is not that the tax code is complex (though I agree that is a problem) but rather that it is really, really difficult to define income in such a way that it closes all potential loopholes. It's even more difficult to do so in a way that is politically possible, especially considering the influence corporate concerns have with elected officials. I understand what you are saying but I'm actually a certified accountant and I can tell you that eliminating loopholes in the tax code is MUCH more difficult to achieve than most people realize.
My personal opinion is that we should eliminate the corporate tax rate, removing the shenanigans altogether. Make up for this by making dividends and capital gains taxable as income.
Umm, then companies will stop paying dividends and companies can avoid paying taxes by avoiding realizing capital gains. Both are fairly easy to accomplish. You also haven't considered the effects of national and state boundaries. A lot of tax avoidance strategies are based upon exploiting differences in tax codes in different countries, states and/or municipalities.
Re:Not that easy in reality (Score:4, Insightful)
it is really, really difficult to define income in such a way that it closes all potential loopholes
Agreed. I'm saying don't try. Only tax individuals. Sure, they can play games with getting things like company cars and not count them as income, but they already play such games and my proposal won't make this any better or worse.
Umm, then companies will stop paying dividends and companies can avoid paying taxes by avoiding realizing capital gains.
Companies paid dividends before the special dividend rate - stockholders will want to get paid, whether they pay more tax or not.
Companies would have no reason to fear capital gains, because they wouldn't be taxed on them.
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I'm a bit biased though as I'm strongly libertarian.
If you were really strongly Libertarian, you'd probably be anti-corporation... Corporations screw with the free market, but that's not what really messes up Libertarian ideology - far worse is the limited liability. If a person can screw up your property and hide behind a corporation, then the basic principles of Libertarianism cannot function.
My ideological leanings are towards the Libertarian side, but I'm far too pragmatic to call myself a Libertarian. I do have a growing dissatisfaction with these mecha
Deliberate stance (Score:3)
They're not abusing it. You said yourself that individuals are expected to take deductions and such. Companies are expected to follow the rules as well and try to reduce their tax bill. I think he's being deliberate in the delivery of his message. Yes it's arrogant, yes it's unfair, but he doesn't come off as smug (IMHO). He's illustrating a point, and so long as the "fix" for the "problem" doesn't penalize Google specifically
Re:Question (Score:5, Insightful)
The current crop of GOP senators are very business friendly
That's a euphamism for "worker-hostile". "Oh, no, don't raise taxes on the billionaires, make the roofer pound nails until he's 70. Oh, and cut down the amout of doctor visits he can go to as well, medicare costs too much."
The GOP is the party of unbridled greed.
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The two are not mutually exclusive. A tax system can fund government and be fair. Ours currently is not. If the loopholes that these corporations exploit were closed and the government didn't have to close the gap by taxing middle America at a higher rate, much of our weak middle class economy issues would disappear.
Re:Question (Score:5, Insightful)
Look around you. Civilization. Not possible without taxes and a strong central government. Sorry fanboys.
Re:Question (Score:5, Insightful)
monaco is a tiny parasitical entity. funded by the rich from other countries
maybe somalia is the example you were reaching for
Re:Question (Score:5, Insightful)
All taxation is unfair. Taxation is, essentially, legalised theft.
No it isn't. It's a means of redistributing wealth, which is why rightwing Americans in particular hate it so much. Some people pay more tax, some less, but it all goes to paying for things that are for the benefit of society as a whole.
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Hmm, so the "money influences" decided that the average taxpayer needed a "standard deduction", right?
Or a deduction for mortgage interest paid?
Or, at various State levels a "homestead exemption" to Property Taxes?
Just a few of the more obvious examples of LEGAL reductions in tax rates for the "average person". There are more, if you want to bother looking them up. Your tax
Re:Question (Score:4, Insightful)
No, yes and no. There are influences other than big money at work too.
The mortgage interest deduction is a subsidy to banks and the home building industry. You may believe you benefit from it. I believe it simply makes you pay more for a house.
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Re:Question (Score:5, Insightful)
And how many people setup offshore bank accounts and front companies etc to avoid tax?
Re:Question (Score:5, Insightful)
If I had to venture a guess: most of us. Very few individuals have the money to find those legal loopholes or lobby governments for tax incentives. Even if we did, the return on investment would be in the red.
Re:Question (Score:5, Interesting)
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I thought you had to be bright to work for Google? How come you're so fucking dumb that you don't even understand that road infrastructure is a tiny fraction of all associated costs of road use and that fuel duty doesn't come close to covering the externalities?
Re:Question (Score:5, Informative)
I do actually. As do most of the UK's population.
I live and work in the UK, and I take my pay through PAYE which means my income tax is automatically deducted. Most employees in the UK get paid this way.
I, and many others have the option of being paid outside the PAYE system so that we can manage our own taxes, this would allow us to take advantage of many tax evasions schemes available, or even simply do it ourselves by paying ourselves the minimum non-taxable wage and paying the rest out in a manner that doesn't attract things like national insurance.
Some people do do this, but most don't.
So can we now finally kill this stupid "How many people reading this intentionally pay more tax than they are strictly required to?" meme? Because certainly in the UK, the answer is "most people".
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"I think you massively over-estimate the ease of"
What does the ease of it matter? It's not easy for companies to dodge tax either, but some choose to do so, others don't. I'm not sure what the relevance of your point is here - the fact remains that most people pay more tax than they strictly legally have to.
"Besides, what big companies are doing with tax isn't avoiding paying income tax on wages. It's corporation tax, which is very different."
Well it's very different because corporations are very different,
Re:Question (Score:5, Insightful)
How many people reading this intentionally pay more tax than they are strictly required to?
How many people reading this have any significant ability to adjust their 'nothing we did was other than legal' tax rate to be substantially different from their 'time to fill out the tax forms' tax rate?
That's the thing: complaints about corporate and HNW tax-dodging are not based on the premise that everybody should just voluntarily chip in an extra 10% for Uncle Sam; but on the (largely accurate) perception that there is a little-people tax code and a quite distinct, and very, very generous indeed, tax code for people who can afford the requisite caymans subsidiary, 'tax opinion letters', and suitably talented accountants.
It's like answering a complaint about criminal justice for poor schmucks with overworked public defenders vs. celebrities with fancy lawyers by asking "Well, did you go and voluntarily turn yourself in and plead guilty for all that jaywalking you've done?". That's orthogonal to the point: The complaint is not "some people aren't volunteering!" but "some people are forced, and some people would only be held to anything resembling what the rest are forced to if they were to volunteer."
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Yes, but a rich asshole.
And you didn't answer the question.
You own a company. A company that is sposed to make you money.
Would you spend two point five BILLION pounds (so ~FIVE BILLION dollars) in taxes that you don't have to?
Yes or no.
If you answer yes, you're an idiot and will probably be replaced by your board of directors within an hour.
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Isn't the point of having a tax code so that we don't have to decide how much to pay in taxes based upon our ethics? The government tells us how much to pay based upon its tax code, so we pay it. At no point do they ask us to pay based upon our ethical standards.
I guess I wonder what should Google do. Should they pay the maximum amount the UK government wants, and avoid all possible deductions and loopholes? Or should they pick the "normal" deductions that other UK businesses use? Something in between?
Re:Question (Score:5, Insightful)
Is he breaking the law?
No.
“For Eric Schmidt to say that he is ‘proud’ of his company’s approach to paying tax is arrogant, out of touch and an insult to his customers here in the UK,” she said.
Maybe, but that's a subjective judgment. Tax law is not subjective. There is a very good reason for that.
Google should recognise its obligations to countries like the UK from which it derives such huge benefits, and pay proper corporation tax on the profits it makes from economic activity here. It should be ashamed, not proud, to do anything less. ”
It pays proper corporation tax. Proper corporation tax is what is legally required. If you don't like the amount of tax Google is paying, close the fucking tax loopholes that allow it to get away with less.
As a private citizen who does not have the financial means to do a double Irish, blind trust, or whatever-the-hell-else legal mechanisms I could use to legally optimize my taxes, does it gall me that Google is paying such low taxes? Of course it does. I find the whole system loathsome and unfair. Do I want to see the laws allowing them to do this changed? Absolutely.
Do I want to see them subjected to arbitrarily made up rules that are contrary to what the written law says? Fuck no. If someone does not understand why this would be a bad idea, it's not really worth arguing.
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Really? So he should be quiet about successfully increasing the bottom line to the tune of 5 BILLION dollars?
He has a company. He has one job to do, precisely one responsibility to his board of directors and shareholders (and himself).
That responsibilty: To make money.
To spend 5 billion bucks he doesn't have to would be stupid in the extreme.
When you're on the outside looking in, you dont have to like it.
But stand in his shoes for one second, and tell me you would do differently.
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He has a company. He has one job to do, precisely one responsibility to his board of directors and shareholders (and himself).
That responsibilty: To make money.
[Citation Needed]
This is a pernicious idea that is a parody of what America actually is.
What you're really claiming is that the nature of our social compact has changed in a horribly negative way.
When Google went public, they explicitly told everyone that profit was not their goal, that they would be doing weird things that weren't always going to be profitable, and that you shouldn't buy Google's stocks if you didn't like the plan.
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He's not lying about his profits - he's availing himself of the tax code as written.
Eric Schmidt/Google are not responsible for the tax code.
Did it ever occur to you that by highlighting the way the current tax code is written Eric Schmidt is working to bring about reform of the tax code? If he quietly exploited the tax code, how would the average citizen know what was going on?
Re:Question (Score:5, Insightful)
Home Schooling & Private schools are, apparently, unheard of by you.
Very few hospitals are run by municipalities, most are run by either non-profits or charities, with a some being for-profit.
The public roads argument is interesting - do employers pay for roads so employees can get to work and so that they can ship and receive goods, or do employees pay for roads so they can get to work and buy the goods others have manufactured/raised/offer? The answer is both.
The original poster's point, which apparently escaped you, is that no one goes out of their way to OVERPAY their taxes, and someone who pays all their taxes as defined by the law (as Google does) is doing nothing wrong. It may not comport to a simplistic view that "they should pay more" but in reality, they are simply availing themselves of the incentives our lawmakers provided them.
Don't be angry with Google for following laws that allow them to pay less in taxes than you think they should, be angry at the lawmakers that craft the laws that allow them to do so.
Re:Question (Score:5, Insightful)
There is plenty of anger for them both and then some. Your argument is specious because those same corporations are buying those same politicians specifically to favor them with laws written by the corporation lobbyists. Of course the tax system favors them since they wrote the tax loopholes this dumb ass CEO is espousing as virtuous.
Re:Question (Score:5, Insightful)
And yet it'll fall apart if we, on voting day, withdraw our support for those politicians. We never do, though.
We The People know how Democrats and Republicans get the text of the laws they enact, and every two years we re-affirm that yes, we want those people to keep on doing that.
There's nothing wrong with being angry, but you're getting angry with a machine that we've signed off on, which acts in a predictable fashion and hasn't malfunctioned. We knew what we would get, and we got it. Be angry at our hypocrisy instead, where we say we want fair government, but then vote against it, sometimes with mumbled excuses for why we reluctantly did it yet again.
I know what you're thinking: being angry at our hypocrisy will just lead to an acknowledgement of our responsibility, and nothing good ever comes of that. What we need is for a new veil of self-deception, since the old one is so tattered. Nobody believes our old excuses, or believes that we're stupid enough to believe them. It's time for a fresh start. Therefore, for the 2014 elections, I propose we each dedicate ourselves to one of two projects:
We can do this if we try. There is no reason we, our our children, should ever have to face the realization that political power always rests in the hands of the governed.
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Flat taxes are horribly regressive and taxes every dime a poor person has (because they have to spend it) while taxing a very tiny portion of the money a rich person makes.
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Roads are cheap, though. In the UK last year the govt spend about 1.5 billion pounds on them, out of a total budget of ~650 billion. The fuel tax income was nearly 3 billion. So, roads are a profit center for the British government. Mayb
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is that no one goes out of their way to OVERPAY their taxes
I think Mitt Romney did for 2011.
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Re:Question (Score:5, Insightful)
Don't be angry with Google for following laws that allow them to pay less in taxes than you think they should, be angry at the lawmakers that craft the laws that allow them to do so.
And also don't be angry at someone who uses food stamps, medicaid, unemployment insurance, social security, medicare . . .
"Why is it that if you take advantage of a corporate tax break you're a smart businessman, but if you take advantage of something so you don't go hungry, you're a moocher?" -- Jon Stewart
Re:Question (Score:4, Insightful)
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"I don't know anyone who's angry at the recipients of such programs"
I suspect you actually do, but if not then you live in an incredibly tiny bubble. I myself live in a medium sized bubble, and even I know scores of people who are angry at the poor.
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Don't be angry with Google for following laws that allow them to pay less in taxes than you think they should, be angry at the lawmakers that craft the laws that allow them to do so.
And also don't be angry at someone who uses food stamps, medicaid, unemployment insurance, social security, medicare . . .
"Why is it that if you take advantage of a corporate tax break you're a smart businessman, but if you take advantage of something so you don't go hungry, you're a moocher?" -- Jon Stewart
I never belittled people for taking what the government offered - in fact, I face this ridiculous criticisms all the time in my discussions with people; the fact is, I belittle people for demanding more, and I belittle companies for their lobbying efforts, and I belittle the lawmakers that allow it all to happen. I don't even consider people who complain about all the government programs and then take advantage of them to be hypocrites - they were forced to pay for the system, it wasn't their choice. But
Re:Question (Score:5, Insightful)
Re:Question (Score:5, Insightful)
Taxation isn't theft.
Taxation is the honoring of a contract, the social contract you are implicitly a signatory to as a citizen of a civilized society.
You gain the benefit of roads you can drive on, tap water that is available and safe to drink, house fires that get put out, an educated populace (you know, all those citizens who don't happen to be your son), and so on.
You pay for those benefits via your taxes.
If you don't wish to enjoy those benefits, you are free to go somewhere like Somalia, where you won't be burdened with them... and neither will you enjoy all those benefits.
Good luck with that.
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But why are taxes the only part of the social contract that people want to not apply to them? They still expect the protection of all their 'rights', but object to their 'obligations'. Why don't they move to a place where society has broken down (Somalia from what I hear) and live there?
Re: Question (Score:3)
How about you go to Somalia while the rest of us stay here? For some reason that option never seems to come up in these threads where some nebulous and mysteriously unproducible "social contract" is used to justify the implementation of a totalitarian nanny state.
Re: Leave (Score:4, Interesting)
Speaking out falls under the heading of "Lobby", so no, I wasn't attempting to discard or restrict your freedom of speech.
Yes, there is an implicit contract. You'll notice that the roads are drivable, the water drinkable, etc. The government (which, I remind you, is a collection of your fellow citizens, and is not in fact staffed by aliens or demons) is beholden to us. We elect them, and we can un-elect them. Is the system perfect? No, but no system is.
Is there some alternative political system you'd like to propose? If so, then please tell us all about it.
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And once he's old enough, who's going to hire him without an accredited degree, regardless of his abilities? How's do you think he'll get through any HR dept?
When it comes to high school education, all most HR departments will care about is whether you have a GED. And for jobs that require a college education, they have no interest where (or whether) you went to high school, kindergarden, 1st-8th, etc. No one puts it on a resume (doing so would raise eyebrows simply for strange it is) and no one asks. No one cares because it doesn't matter.
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Yawn.
THE COUNTRY DOESN'T DO WHATEVER I WANT THEREFORE I COMPLETELY DISMISS IT!
Get real, man. We vote, the votes are counted (usually, excepting Florida in 2000), and the winners rule the republic. Pointing out the imperfections of how the democracy is administered doesn't make it not a democracy. You sound like a child. Grow up.
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Yeah. But what's "reasonably" angry?" (Score:5, Insightful)
Again. These companies are under no legal, moral or ethical constraint to assume the maximum tax burden possible.
They're under fiduciary constraints to maximize their shareholders' investments.
If you think that the current tax avoidance schemes are a Bad Thing, stop pissing and moaning at the companies who are simply doing what they're supposed to be doing and change the fucking laws.
Re:Yeah. But what's "reasonably" angry?" (Score:5, Interesting)
Restraint is not merely legal. Restraint is about your own internal compass. If you prove not to have one, I will hold that against you.
Re:Yeah. But what's "reasonably" angry?" (Score:4, Insightful)
So if someone was standing on the street corner with a bag of money and they said "whosoever approaches while hopping on one foot gets $1000 cash", would you do it? Or would you say "someone else needs the money" and ignore him?
Should I not claim the mortgage interest deduction and the child tax credit? The original idea behind tax credits/deductions is for the government to encourage desirable behavior. You can't cry foul when you say "People who do X will get money!" and then people do X and take the money. If you don't want to give them money, stop providing the hoops to be jumped through. But then don't complain when they stop jumping.
Re:Yeah. But what's "reasonably" angry?" (Score:5, Insightful)
This is not about corporations making full use of tax credits.
This is about corporations licensing "IP" e.g. the name "Google" from some company in the Bahamas for almost as much money as they make (before the licensing) in a country such as the UK. As a result they appear to make no UK profit (since they have to pay so much for the name "Google") and hence have to pay no tax.
Basically it's about moving all actual profit offshore before it's taxed.
It might be legal, but it is unethical and it looks like lawmakers are looking to fix that loophole.
And FYI, that is something it is possible to do as an individual. Most people don't and those that do are generally looked on as scum.
Re:Yeah. But what's "reasonably" angry?" (Score:5, Informative)
That's a really good explanation of what's going on, so thanks, but I disagree with your conclusion.
Most people don't do this as an individual because most people don't make enough money for it to be worthwhile. But let me explain why I don't have any ill-will at all towards these companies: it's a global economy, and countries have to compete for businesses. If they U.S. can't offer a competitive tax structure (I personally favor a corporate tax rate of zero*), then the companies move. It's the free market at it's best, and it happens even between states in the U.S., and I completely support it.
* - Where do companies get their money to pay taxes? Hint: it's not growing on the trees that are growing outside their offices. Studies indicate that an average of 21% of the cost of all the goods and services you buy in the U.S. are simply embedded taxes that get passed up the line to the government. Most businesses get their money from one source: their customers.
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Most people don't do this as an individual because most people don't make enough money for it to be worthwhile.
It's not hard to set up an offshore corporation to get paid into, and it's not that expensive. I think there are two barriers to entry. It takes time, effort and money to figure it out, and to get paid that way. It also feels wrong. I think either one alone probably wouldn't be enough: if it was trivial, people would do it anyway. But given the difficulties, and bad feelings encountered when you s
Re:Yeah. But what's "reasonably" angry?" (Score:4, Interesting)
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Restraint is not merely legal. Restraint is about your own internal compass. If you prove not to have one, I will hold that against you.
His investors, however, will find other, more lucrative investments, insulated as they are from the moral dilemmas involved, separated by their 401k that holds mutual funds that buy indexes that own company stocks.
Wait, wait, wait . . . Don't get me wrong. I am not endorsing a "profit above all else" viewpoint or unethical behavior. But someone else here will assume I will. Someone always does when I point out the dangers of laissez-faire capitalism. Like if I yelled "Black widow" when one was crawling up h
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there is no endless universe of morally repugnant corporations untouched by human judgment
especially since bad corporate behavior will eventually hurt the bottom line, and therefore the investor
if someone says to you "this moral behavior is too expensive, i'm looking for a better return, i'm taking my money, good bye" then let that investor go. because that is a soon-to-be poor investor
the idea that a moral company has to be immoral to compete doesn't follow
because the immoral companies will suffer financia
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But what if your compass and mine simply point in different directions?
Alice may think taxes are great because they fund schools and roads. etc.
Bob may think they are terrible because they enable murders around the world in the form of military actions, and the oppression of his fellow countrymen
Alice's moral compass says she should not only pay taxes, but if she can, should pay extra. Its a good thing.
Bobs compass says no, he should pay as little as he can to avoid being victimized himself, and try to hide
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Again. These companies are under no legal, moral or ethical constraint to assume the maximum tax burden possible.
They're under fiduciary constraints to maximize their shareholders' investments.
If you think that the current tax avoidance schemes are a Bad Thing, stop pissing and moaning at the companies who are simply doing what they're supposed to be doing and change the fucking laws.
Not. this again. The board is required to act in the best interests of the corporation entrusted to them by their shareholders. This notion that they are legally required to should maximize profits/stock price (shareholders' investments) is incorrect. If Google wanted to open a school or fund education so they can have a better workforce tomorrow, the board cannot be removed (well, except by a vote - but that can happen irrespective of what the board does). The board can claim that they are acting in the b
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How much of that money is really going to Public Roads, Schools, and Hospitals...
Most of what you mentioned is paid via Town Taxes that is based on the value of your property, not income.
Hospitals are funded for the most part privately outside of direct taxes, with the exception of Medicare and Medicaid, and Random Grants and often Bad Dept protection.
The real question is the effectiveness of the services performed and the amount that you pay for it.
Is the amount we put into welfare good in keeping people o
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FTFY...
Re:Question (Score:5, Insightful)
Because corporations including Google had a big hand in lobbying to have the laws made so they can avoid paying as much taxes as possible while still demanding the government services those taxes go to pay for. Nothing like tilting the table then blaming the table when things fall off it.
Comment removed (Score:5, Insightful)
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Re:He's right (Score:5, Insightful)
Please. Someone go after them.
Many have tried. They're all awaiting trial now or in jail. The main purpose of law enforcement is to maintain the status quo. You're not going to beat the system working within it or exposing yourself to it. That's been proven since the 60s in this country when, depite massive public opinion against it, the war in Vietnam continued. It's going to take more than words, banners, and a few picket lines to fix this problem -- our law makers do not listen even when they are surrounded by thousands of angry voters, because they know that voting and protest are both ineffectual. If you manage to get rid of one bad politician, another will take his/her place. The amount of effort required to overcome the bureaucratic inertia reinforcing and protecting these laws and legal mechanisms to extract money from the poor and give them to the rich is beyond the capability of even hundreds of thousands of organized citizens.
I cannot see this changing short of a major civil uprising.
Re:He's right (Score:5, Insightful)
Why not? "I' won't be punished for it" is hardly good moral reasoning - indeed, it's literally infantile [wikipedia.org] morality. And it actively harms society, not only by pushing tax burden on its weaker members but also by acting as an incentive to control all aspects of behaviour through laws.
Why on Earth should we not fault executives for refusing to grow up?
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Even better, apply it to sales instead of income and make it easier as then you can see the direct effect of taxes at every transaction rather than hiding it in several layers of transactions. See http://www.fairtax.org/site/PageServer [fairtax.org]
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Perhaps you didn't actually read the fair tax and the fact that you get a prebate to cover taxes basically to the poverty level. Or the fact that a rich man paying 20% on Christmas presents is significant if he is buying expensive presents.
More importantly, the VAT in Europe is ON TOP OF income taxes, not a replacement for it. The idea is that taxes discourage things (yes, economics says if you increase the cost of something, the demand goes down). Thus if you have to discourage something, you should discou
Mobile Capital (Score:5, Informative)
Its not Capitalism, its "Mobile Capital"-ism. And governments need to adjust their tax structure very quickly! Otherwise national-level and smaller businesses will not be able to compete.
Especially the robot CEO's (Score:5, Funny)
I'm sure you could write a computer program to do a better job than 99% of CEOs... and think of all the money that will be saved on the obscene costs in have a human CEO.
Run Eric, Run. The robots are coming.
Do No Evil (Score:5, Insightful)
The more Schmidt speaks the less you can take the do no evil line seriously.
Re:Do No Evil (Score:4, Insightful)
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What the fuck has "do no evil" got to do with being a US company?
If it were an Iraqi company (or a North Korean one), it would be "do no good". Or did I just get that backwards?
Re:Do No Evil (Score:4, Insightful)
Re:Do No Evil (Score:4, Informative)
Evil is about morality, not legality. So yes, it can be evil when taken to the sort of extreme that Google and others have.
Re:Do No Evil (Score:4, Interesting)
Evil is about morality, not legality. So yes, it can be evil when taken to the sort of extreme that Google and others have.
So you say that screwing your shareholders is moral now?
Re: (Score:3)
If your shareholders want you to screw other people, and you "screw" them by refusing to do that, then yes, it's perfectly moral.
robot workers (Score:5, Insightful)
The goal should be 0% involuntary employment.
Artificially Low Interest Rates lead to Automation (Score:4, Informative)
If interest rates (prices) were set on a free market with a hard currency it would be based on how much money people had saved (supply) and how much people wanted to borrow (demand). This works out nicely because any automation involves a large expenditure of money to increase productivity. If there is low unemployment and people have high wages and money saved it will lead to low interest rates. This causes businesses to want to invest in capital equipment because labor is expensive and money is cheap. On the other hand if you have high unemployment, low wages, and low savings you will have a high interest rate. This leads businesses to hire people because it's more profitable. This is a natural balance of sustainable automation.
What we have now is the Federal Reserve setting artificially low interest rates. This causes businesses to invest in automation at a time in which we have high unemployment, low wages, and low savings. This is exactly the wrong approach. It causes lots of malinvestment by automating production to increase capacity but nobody has enough money to buy these goods.
Re:robot workers (Score:4, Interesting)
But you could tax the usage of robots.
I do not know about other countries, but here in Belgium there is a tax on power equipment, e.g. electro-motor based things, in function of the power.
Re: (Score:3)
How well is it working out now for the US people competing against these "robots"? How well will it work out in the near future? And how well will it work out when cheaper and more advanced robots arrive?
If you think it's going to be fine, that's great. Not really my concern - after all I'm a cheap worker/"robot" in a 3rd world country. FWIW seems I can read, spell and write better than many of the US slashdotters here. I
Corporate Taxes == Political Favoritism (Score:5, Interesting)
The corporate tax rate should be on the order of 10% *but* with zero loopholes: Any profits from sales made in the U.S. get taxed regardless of where the company is based.
That would actually increase taxes on some major companies (but not to the stupid levels for the nominal tax rates that are in place now).
What we have now is a system where politicians can strut around talking about "taxing those evil corporations" while the corporations that pander to the politicians pay zero tax. Offender Number 1: General Electric that was paying zero taxes while Jeffrey Immelt was jetting around the world with Obama at taxpayer expense while the convenient liberals at MSNBC railed that Mitt Romney never paid taxes while conveniently never talking about their own corporate masters.
Re:Corporate Taxes == Political Favoritism (Score:4, Insightful)
3%-5%, but on gross receipts, not profits. The security, safety, and infrastructure the US Government provides is a cost of doing business, not a luxury which is consumed when profit occurs.
Re: (Score:3)
He may have arbitrarily picked from many different tax schemes, but he did not "make it up"
Socialism may win after all (Score:5, Interesting)
First on tax avoidance: no one wants to pay taxes, but if everyone is taxed fairly, then this sort of nonsense resulting from favoritism in the tax code would not happen.
On the robot overlords commeth comment: Just about any halfway intelligent person can see that we're entering the phase of robot factories that produce products and that can repair themselves. Even factories producing robots.... These factories will take orders of magnitude fewer labor hours, and this movement will spread to other typically high labor industries, such as agriculture. Once those are converted, what then? A service economy can only employ so many, and food and basic foodstuff will wind up being almost free, other than energy costs (which could also be virtually free in this scenario) So what's left? Academia will only hold so many, and you only need so many managers/troubleshooters.
Re:Socialism may win after all (Score:4, Insightful)
Extrapolating from current trends, we're going to hit the hyper-wealth singularity only to find out that it's a feudal nightmare.
Tax avoidance is abd for a simple reason (Score:3)
The most interesting bit is about unemployment (Score:3, Interesting)
Most people will never make it to higher education. It is never mentioned but the educational system works by setting up a threshold on people, not on knowledge. The 20% (or whatever) with the best mathematical skills get to be engineers or scientists. Exams are designed to filter that 20%.
In the US, people with some college is 56.86% of the population, as per wikipedia. The rest of the people are doing jobs that are being automated now or will be automated during the next decade. For example, drivers (self driving cars), factory people (robots), call center (the web and call center speech recognition), and many more. At some point robots will be flipping burgers, it is not that difficult.
We don't have time to educate all this people and create paid jobs for them before the next wave of technology comes around in another ten years. When it comes, it will take away even more jobs.
So we have two choices. We own the robots collectively as a society, or a few rich people owns them. The way things are going, it seems to be the former. This could bring a dystopia if we don't find a way out.
So here is my proposal.
Right now governments get most of their money from labor taxes, but soon this money will dry out. We should stop taxing human labor completely. We are penalizing it. Instead we should tax corporate earnings and financial transactions. That is where all the tax money need to come from. That would keep worthy humans productive even if their marginal value compared to robots is small.
We need to come to terms with the fact that a big and growing proportion of people will not be employed. They should not be considered guilty. In any case they should be considered owners of the automated workforce the same as the rest of people is. So they should be given a cut of the taxes so they can live meaningful lives.
Re:The most interesting bit is about unemployment (Score:4, Insightful)
That would be a very likely dystopia. Automation leading to mass unemployment, but without the foresight to shift society to a model able to operate under those conditions. The result being billions of people living in poverty because there is simply no work for them to do, while those who do control wealth have no incentive to share it freely. The only apparent solution is some sort of techno-socialism, but the S-word is considered obscene in US politics, so that isn't going to be easy.
Robots are already the cause of unemployment (Score:3)
Not robots in the scifi sense, but rather every bit of automation we've installed for the last 150 years. We've gotten so efficient by using automation that, quite simply, we don't need as many people to do things as we have in the past.
It was speculated in the 60s and 70s that our work weeks would drop to 5-10 hours with all the time savings from computers. We've saved all that time, but an hour of human work is still the same value and nobody want's to get paid 25% of a normal annual salary (say, $15,000 a year), so we simply produce more with fewer staff.
Re: (Score:3)
Exactly. And the summary says: "One must admit to being impressed by his honesty."
Why should anyone be impressed by his "honesty"? (Tax avoidance is, in my book, inherently dishonest, even if legal.) At least the CEOs that decline to comment show some level of guilt. If Schmidt can stand up and say that, it shows him up as self-entitled, sociopathic, or both.
Re: (Score:3)
Are you telling me you don't take any deductions or credits? No standard deduction? Do you pay a use tax in your state for all the online purchases you made and did not pay sales tax on? That's not even legal, yet most of us do it to avoid taxes. Every company should avoid paying every dime of taxes they can. It's the only defense we have against government growth short of a revolution.
Re:eric schmidt is text book hubris gross arroganc (Score:4, Insightful)