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Google Robotics Technology

Schmidt On Why Tax Avoidance is Good, Robot Workers, and Google Fiber 780

Posted by samzenpus
from the thats-a-lot-for-one-day dept.
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.
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Schmidt On Why Tax Avoidance is Good, Robot Workers, and Google Fiber

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  • Question (Score:5, Insightful)

    by Man On Pink Corner (1089867) on Thursday December 13, 2012 @09:10AM (#42271549)

    How many people reading this intentionally pay more tax than they are strictly required to?

    • Re:Question (Score:5, Insightful)

      by erroneus (253617) on Thursday December 13, 2012 @09:18AM (#42271611) Homepage

      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)

        by DJRumpy (1345787) on Thursday December 13, 2012 @09:36AM (#42271763)

        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)

          by MightyYar (622222) on Thursday December 13, 2012 @09:53AM (#42271947)

          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.

          • by DJRumpy (1345787)

            The GOP has always been representative of Business. It simply is what it is.

          • by sjbe (173966) on Thursday December 13, 2012 @10:46AM (#42272693)

            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.

            • by MightyYar (622222) on Thursday December 13, 2012 @11:20AM (#42273265)

              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.

        • I disagree. I think they are focusing on exactly that; abuse of the tax system.

          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)

          by mcgrew (92797) * on Thursday December 13, 2012 @10:51AM (#42272781) Homepage Journal

          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.

      • Here's the problem: Those laws/rules/loopholes/allowances etc were created by the money influences which are benefiting from them.

        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)

          by Shavano (2541114) on Thursday December 13, 2012 @10:05AM (#42272101)

          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.

      • by w_dragon (1802458)
        More like these tax loopholes are bugs in the law where companies can set up in multiple countries, properly follow the laws in each country, and pay very little tax anywhere. I suppose you could blame the GATT for encouraging this sort of globalization, thought personally I think globalization's benefits far outweigh its drawbacks. At this point the government has the choice of negotiating with the countries that provide the tax havens (Ireland, Bahamas, etc) to change their tax laws to close the loophol
    • Re:Question (Score:5, Insightful)

      by Anonymous Coward on Thursday December 13, 2012 @09:20AM (#42271641)

      And how many people setup offshore bank accounts and front companies etc to avoid tax?

    • Re:Question (Score:5, Insightful)

      by MacTO (1161105) on Thursday December 13, 2012 @09:26AM (#42271675)

      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)

      by Instine (963303) on Thursday December 13, 2012 @09:54AM (#42271977)
      me. I do. I could play all kinds of games to get out of the 40% rate I pay on half my salary. But I'd rather the NHS got it, than a private healthcare system I sponsored with my avoided spend on tax. Because thats better for me? No. Because that's better for the country I live in and the the one my daughter will grow up in? Yes.
    • Re:Question (Score:5, Informative)

      by Xest (935314) on Thursday December 13, 2012 @10:00AM (#42272033)

      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".

    • Re:Question (Score:5, Insightful)

      by fuzzyfuzzyfungus (1223518) on Thursday December 13, 2012 @10:03AM (#42272067) Journal

      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."

  • He's right (Score:5, Insightful)

    by Cornwallis (1188489) on Thursday December 13, 2012 @09:11AM (#42271561)

    I can't fault anyone for taking advantage of legal loopholes.

    If you want to blame someone go after the Sociopaths in Washington(TM) who created the U.S. tax code.

    Please. Someone go after them.

    • by Simulant (528590)
      Except we're discussing the UK tax code.
    • Re:He's right (Score:5, Insightful)

      by girlintraining (1395911) on Thursday December 13, 2012 @09:34AM (#42271741)

      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)

      by ultranova (717540) on Thursday December 13, 2012 @09:40AM (#42271801)

      I can't fault anyone for taking advantage of legal loopholes.

      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?

  • Mobile Capital (Score:5, Informative)

    by SkunkPussy (85271) on Thursday December 13, 2012 @09:13AM (#42271571) Journal

    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.

  • by Anonymous Coward on Thursday December 13, 2012 @09:13AM (#42271577)

    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)

    by Anonymous Coward on Thursday December 13, 2012 @09:16AM (#42271597)

    The more Schmidt speaks the less you can take the do no evil line seriously.

  • robot workers (Score:5, Insightful)

    by Iamthecheese (1264298) on Thursday December 13, 2012 @09:18AM (#42271607)
    Why would it be a good thing for us to work really hard so we can keep jobs by outpacing robot workers?

    The goal should be 0% involuntary employment.
    • by trout007 (975317) on Thursday December 13, 2012 @11:47AM (#42273827)

      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.

  • by CajunArson (465943) on Thursday December 13, 2012 @09:20AM (#42271639) Journal

    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.

  • by Gr8Apes (679165) on Thursday December 13, 2012 @09:20AM (#42271643)

    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.

  • by aepervius (535155) on Thursday December 13, 2012 @09:23AM (#42271647)
    You are using the structure made available with tax and you get a free ride. but i do not accuse the user of tax avoidance, I accuse the government responsible for setting up the tax and letting the whole gaping hole, and never being bothered a second that some big company seems to never have tax report in the same level as their profit. *THEY* , the politician , have a lot to explain. not the company using it.
  • by javilon (99157) on Thursday December 13, 2012 @09:30AM (#42271711) Homepage

    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.

    • by SuricouRaven (1897204) on Thursday December 13, 2012 @09:53AM (#42271951)

      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.

  • by Overzeetop (214511) on Thursday December 13, 2012 @09:48AM (#42271895) Journal

    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.

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