And we all knew that this was going to be amusing, didn\’t we?
Firstly, by deliberately avoiding tax Google has shown contempt for the states that grant it the right to trade within their jurisdictions. In the process it shows contempt for their laws, the privilege of limited liability that they grant, their tax systems, and most of all their right to impose their democratic will on those who trade within their domains.
Most amusing. Google UK pays all the tax that is asked of it. The bit that doesn\’t pay UK taxes is Google Eire. Which is, ermm, not, by the definitions of the law, actually \”trading\” in the jurisdiction.
It\’s actually trading in Eire, a EU law insists it may….even should given the Single Market….and that\’s why it doesn\’t pay the UK corporate income tax. It pays the Eire one instead, as the law insists that it should.
Second, this is an attack on Google’s shareholders. The money hidden in Bermuda cannot be distributed to the shareholders of Google without tax being paid: Google says it will not pay that tax so these funds are beyond the shareholder’s reach. The shareholders seem not to care: they think the markets will value this unreachable cash dollar for dollar so they believe that it turns into a capital gain. But that can’t be true forever: all gains are based on income prospects. Google is in the long run denying its shareholders an income prospect. That will be valued in the end and this will reduce shareholder value. So this is definitely not an action in long term shareholder interest – which is what matters.
And isn\’t that amusing. If the money goes onshore then yes, it\’s correct that it can be distributed as dividends. In doing so there will be the US 35% corporate income tax to pay (less whatever foreign taxes have been paid) plus the dividend recipients will pay a further 15% on the income they receive. And after Jan 1 that rises to, I think, 45% or so.
So what The Murph is saying is that it\’s actually in shareholders\’ interests to pay 70% or something in tax. Instead of leaving the money in the company to fructify as they invest it in expansion of the business.
That is an odd view of the world.
Because that view of capitalism is not just contemptible, it’s the face of real political extremism in this world now. The biggest threat to democracy does not come from the left, or even religious fundamentalism. It comes from companies like Google and those who assist them.
And as to the threat to democracy. Hmm. It\’s the democratically elected politicians who have written the laws that Google obeys so assiduously. I do tend to think that breaking such democratic laws is a threat to democracy, yes. But obeying them, somewhat less so.
And apparently it is perfectly democratic to unleash a small gang to bully or blackmail companies into paying more tax than our laws (as passed by Parliament) require.
Everyone blackmailing companies now. Greenpeace are gloating that they have stopped Waitrose from working with Shell because Shell are a nasty oil company. Waitrose were going to open shops at Shell stations.
http://www.prweek.com/uk/news/1164356/greenpeaces-john-sauven-hails-social-media-campaigning-waitrose-halts-shell-plans/
Shareholders who buy Google shares on the betting that they increase in value and they can sell at a profit can do so. Those shareholders who like to buy shares and take the dividends can go elsewhere. There is nothing to stop them buying any other company’s shares which offer better returns in that aspect. It’s not like the only shares in the world are Google shares. Is Ritchie still thinking along the lines of one state, one authority, one whatever – so long as he is in charge of it. It seems his idea of oneness has permeated into shares – there is only one type of share.
“So this is definitely not an action in long term shareholder interest – which is what matters.”
Did he really just say that..?! That it’s “shareholder” interests that matter…..
If Google is so evil, why does Richie post links to YouTube videos on his blog. In case he is unaware, YouTube is owned by Google.
Tim I would have thought your argument on these matters would be: “so you have now just figured out you don’t like EU rules either. You and me both. Let’s get out!”
“it’s the face of real political extremism in this world now. ”
What a colossal prick he is.
And let’s be specific about the ‘religious fundamentalism’ he refers to. Could he mean militant Buddhists? Aggressive Shinto? Bombing Baptists?
Dave Evans, Ritchie uses Google for the same reason #UKUNCUT (or is it #UKCUNT) use a gmail address – because their arguments are all ad homs rather than backed by real facts. So they attacks entities because they hate them. Oh, and because Google’s products are free.
In English, the country is called Ireland, not Eire.
Eire is the name of Ireland in the Irish language (Gaelic).
Where your hatred of all things Murphy gives you your stupids, your guttural spaz, a propensity to believe a twat, this crappy post, along with worstall’s general hell-bent anti-intelligence, neglects reality.
Nearly everything that worstall cites as fact is plainly masturbatory nonsense.
except his little pets.
it’s verse if you’re too stupid to realise.
Arnald I always love your posts. For the fantasy element of any comments I just look for your name.
Here on a planet called ‘Earth’ things are somewhat different from what your imagination can conjure.
Nurse, Mr Arnald’s room, the meds !
Its interesting to note that Arnalds diatribes in the comments here often contain insults using phrases related to masturbation.
One tends to conclude therefore that this activity plays a significantly large role in his life.
Jim, now if he truly valued his insults he’d learn to give them properly. Rather than the tantrum and crying out which pretty much any 2 year old has learnt to do.
As long as google has decent future projects it makes sense for them to hold on to the cash they generate, assuming that they will need the cash to reinvest. If google was a mature low growth buiness then they should be looking for ways to return the cash to shareholders. Even then if the tax take is very high, a sensible management might choose to hold the money offshore until there is a more tax efficient way in which to repatriate the money. Indeed I believe there have been several tax breaks for overseas cash for US firms (last one in 2004), making this a tax efficient (and shareholder friendly) decision.
Yup, Murphy not understanding tax, economics, finance or anything much of anything really.
Yes, companies can choose to wait until such time as another amnesty occurs (and it will occur unless the law changes), then pay out dividends.
In the meantime the cash, properly invested, generates more money for the company.
Ritchie is now attacking Google in 4 posts, one of which links to a YouTube video. Words fail me.
I’ve made a comment about it on his blog. There’s no chance he will approve my post.