Google Used Loopholes To Avoid Paying $3.1 Billion In Taxes

The Google Inc. logo is seen outside their headquarters in Mountain View, California in this August 18, 2004 file photo. Google Inc blew past Wall Street's quarterly profit and revenue expectations as a 25-percent revenue surge offset rising expenses, sending its shares up 9 percent. The world's largest Internet search engine on October 14, 2010 posted a third-quarter net income of $2.17 billion or $7.64 a share, excluding items, surpassing Wall Street's average estimate of $6.69 a share, according to Thomson Reuters I/B/E/S. REUTERS/Clay McLachlan (UNITED STATES - Tags: BUSINESS SCI TECH)

And good for them, as far as I’m concerned. I think it’s every individual, and every company’s, duty to pay as little in taxes as possible.

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.

Google’s income shifting — involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” — helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.

“It’s remarkable that Google’s effective rate is that low,” said Martin A. Sullivan, a tax economist who formerly worked for the U.S. Treasury Department. “We know this company operates throughout the world mostly in high-tax countries where the average corporate rate is well over 20 percent.”

This is usually where the class warfare takes over. Google is a gigantic and very profitable company and thus should be paying through taxes through the nose, say the class warriors. The fact that Google is able to shift income overseas and avoid paying America’s 2nd-highest-in-the-world corporate tax rate (among other taxes) infuriates them and prompts calls for laws closing the loopholes.

But here’s the thing: If we want companies like Google to stop shifting income overseas, if we want American businesses in general to keep there business here in the United States, we should stop taxing and regulating them to death.

Lower the national corporate tax rate. Lower state corporate tax rates. Deregulate. Stop punishing these companies for being big and successful. Then these companies will keep their profits and operations in the United States.

Of course, this is anathema to the left. They’d rather have you believe that these companies move their profits and operations overseas because they’re greedy and hate Americans or something. The truth is that liberalism does more to drive outsourcing and off-shoring than anything else.

Rob Port

Rob Port is the editor of In 2011 he was a finalist for the Watch Dog of the Year from the Sam Adams Alliance and winner of the Americans For Prosperity Award for Online Excellence. In 2013 the Washington Post named SAB one of the nation's top state-based political blogs, and named Rob one of the state's best political reporters.

Related posts