Legislators are beholden to rich benefactors. Look what happened to estate tax exemption during Bush era. It went from $675k to $3.5million. http://wills.about.com/od/understandingestatetaxes/a/estatet...

And rather than letting Bush law expire, Obama boosted the exemption to over $5 million.

This was a huge boon to wealthy class, and most people didn't even notice this crappy legislation from going into effect.

would you blame Google if they gave money to legislators for allowing this kind of tax evasion scheme?

What you are blaming them for is not prohibiting tax avoidance, but for not anticipating that loopholes would be found in existing regulation. It's very likely that if these loopholes were eliminated, some other loophole would be found. At some point, maybe the discussion should be about the spirit of the law, not the letter of it (which can probably be worked around if you can pay for an army of lawyers and accountants in multiple countries)

Avoidance, not evasion.

You might as well blame them for creating free trade, and the european union. If legislators had the power to change the tax code, they would. Realistically they can't without doing something awful like currency controls or trade restrictions or something that will get shot down by the WTO.

I am not a huge fan of corporate taxation because it is so indirect, but I do think we need some new global rules around IP transfer pricing.