Thursday, October 21, 2010

If you tax it they will leave.

Google, an American company created by Americans and used by Americans, pays 2.4% corporate income tax.

Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.


The U.S. corporate income-tax rate is 35 percent. In the U.K., Google's second-biggest market by revenue, it's 28 percent.

Google, the owner of the world's most popular search engine, uses a strategy that has gained favor among such companies as Facebook Inc. and Microsoft Corp. The method takes advantage of Irish tax law to legally shuttle profits into and out of subsidiaries there, largely escaping the country's 12.5 percent income tax. (See an interactive graphic on Google's tax strategy here.)

Why would they screw over their own country this way? Because they -can-.  If you jack the tax the rich will run away and go live someplace cheaper.  They can, and they will.


The Phantom

No comments: