Comment by sokoloff | Hacker News Reader

Comment by sokoloff | Hacker News Reader

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They're not "skimping on paying taxes", IMO. They're arranging their affairs in such a [legal] way as to maximize the return to their shareholders, which is the fiduciary duty of a public company.

The global competition in taxation is a good thing, IMO.

Am I exploiting a loop hole by deducting my mortgage interest? Am I exploiting a loop hole by deciding to hold an investment an extra day so as to get long-term capital gains treatment? Am I exploiting a loop hole by buying a computer or washing machine on "state sales tax holiday weekend"?

Maybe you'd argue that I am, but I believe that I'm just reacting rationally to the incentives offered. (There might be a valid government reason to encourage home ownership, long-term investing, or to spur local purchases in the economy. Must I ignore the incentives to act in a way that governments have decided to encourage? If not, why is it different for GOOG?)

"Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the Courts have said that there is nothing sinister in so arranging affairs as to keep taxes as low as possible. Everyone does it, rich and poor alike and all do right, for nobody owes any public duty to pay more than the law demands." Judge Learned Hand, 1935

The difference between individual incentives and corporate loop holes is that the incentives were put there to encourage certain type of relatively beneficial behavior.

The loopholes were placed there often at the behest of the corporations they benefit. Corporations have far more ability to influence governments than individuals due simply because they have far more money. Money is power. More power, more responsibility. Google has pledged to be responsible. Taking advantage of the irresponsibility of its peers is not responsible.

How about corporate loop holes of the form "We'll give you a tax break [or low interest loan, or other incentive] for the next 10 years if you agree to locate some of your operations here, with the understanding that you'll be employing XX people here over the next 5 years"?

The jurisdiction offering that "loop hole" is encouraging what many people would agree is beneficial behavior (encouraging local employment). The jurisdictions standing to lose that (current or prospective) employer may see it as unwelcome competition, but I'd rather permit jurisdictions to compete freely, such that each local government can tailor its services and governance/taxation as it believes will best serve its consituent population.

Beyond simply believing that such a system is "proper" and "right", I don't think any other system is "stable". Should California be able to dictate that Nevada CANNOT pass a certain type of law or adopt a certain taxation structure? Should they be able to do the same to Ireland? If so, under what theory of law or even theory of basic fairness?

"Don't be evil", if it actually means anything, sets a limit more strict than the legal in terms of what activities are acceptable to perform in order to maximize shareholder value. If they didn't claim a higher standard you'd be right, but they do.

Please explain down vote. This is relevant and straightforward.

If people don't like it, close the loopholes.

And how would you recommend that the US tell Ireland to change its laws?

Right, we should all be so grateful to Google that they're paying any taxes at all. Thank you, Google, for the 2.4%! Thank you! In return, let's have all the corporate-friendly policies that the government funds be paid for by individual tax payers and smaller, non-international companies. What a great plan! Everyone else can hide behind "fiduciary responsibility" (possibly the smallest fig-leaf there ever was) and a quote from some random judge.

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