Barney's Blog

Blog archive

Google: the Teflon Company

The arrogance that is Google knows no bounds. That is because there are barely any consequences for what it does or what its executives say. It is amazing that Google can talk about doing no evil and not get laughed out of the room.

Here is a rundown on recent news: Google was found to be sheltering billions in profits in Bermuda (among other shelters), allowing it to pay a paltry 3.2 percent in corporate tax. Now let's not forget these profits come from co-opting the content of others -- Google, unlike Yahoo and AOL, produces no content whatsoever.

So what does Google get for this behavior? Reports came out that Google chairman Eric Schmidt was offered an Obama Cabinet post (information probably spread by Google) followed by reports that Google chairman Eric Schmidt declined an Obama Cabinet post (information probably spread by Google).

When we don't pay our taxes we lose our houses or go to jail. Google gets offered a key government positions. And you are not going to believe what the job was -- Treasury Secretary. Having Google run the treasury is like having Bernie Madoff watch your wallet.

After letting the world know that Schmidt was offered and declined the treasury post, the chairman was asked about his own company taxes:

"I am very proud of the structure that we set up. We did it based on the incentives that the governments offered us to operate," Schmidt said. "It's called capitalism. We are proudly capitalistic. I'm not confused about this."

Just because Schmidt is technically right about legally avoiding taxes doesn't make it right.

Posted by Doug Barney on 01/07/2013 at 1:19 PM

comments powered by Disqus

Reader Comments:

Sun, Jan 13, 2013 Dan Canada

It's not surprising the huge majority of people who go to your country (artists, entrepreneurs, wide-eyed optimists, criminals and/or future politicians...) do so to make more money than they are making now.

Tue, Jan 8, 2013

All American corporations are holding billions in profits offshore, while they lobby for a tax holiday before repatriating the profits to America. The last time they were granted such a tax holiday most of the money went for stock repurchases and executive bonuses. Very little went for investment or job creation. What a shame.

Mon, Jan 7, 2013

Seriously??!! Hey, Doug - did you take any deductions on last year's tax return? If so, you "legally avoided taxes". How dare you not offer up every single cent wanted by the tax-and-spend Washington types! Is Google arrogant? Absolutely. And so are you for running around trying to stir up class envy of large corporations.

Mon, Jan 7, 2013 Rob San Jose

Don't hate the playa...hate the game...

Mon, Jan 7, 2013

So if Doug is this angry with Google and them paying 3.2%, how angry is he going to get that Apple paid 1.9%, which is lower than they paid the year before. Or is the malice that Eric was offered the job and turned it down. Also, does anyone know what Microsoft, IBM, Oracle, Cisco, SAP and others paid? This isn't new, and its still be being perfected. Just ask Apple.

Mon, Jan 7, 2013 JC Seattle

Google's motto should change from "Do no evil" to "Evil; it's what we do." though taking advantage of the tax laws has nothing to do with it. Taxes, it could be argued, are immoral so paying more than one has to can hardly be considered moral. American taxes in particular are, I believe, squandered on anti-liberty endeavors. Gov't is getting frantic in its efforts to squelch anyone and anything that doesn't adore it so reducing its theft of productive resources can only benefit those not on the dole. Perhaps the gov't should change its motto to "Plunder; it's what we do".

Mon, Jan 7, 2013

Someone is jealous?

Mon, Jan 7, 2013

Many corporations avoid paying US taxes by keeping their assets offshore. Google is not the first, nor the last. Any business trying to maximize their profits would do the same. If you're going to blame Google for doing this, make sure you list the hundreds of other companies that also do this. Don't single them out unfairly.

Mon, Jan 7, 2013

Bravo to Google! They are under no other obligation other than to comply with USA tax laws. This sounds like more "stick it to the corporations" rhetoric. Our corporate tax rates are the highest in the world. In reality, this type of tax policy only hurts investment in the US (read jobs and investment dollars going to more favorable tax jurisdictions). When are voters going to realize that it is the consumer of a corporation's products and services that really pays this corporate tax bill? So scream for more expensive products and services. By the way, let's stick it to the big, bad oil companies, so we can pay higher gas prices. Nonsense!

Mon, Jan 7, 2013

It's all been pretty much laid out here. It's legal. No matter how grossly unfair (there is on such thing as "fair" in life) or grossly immoral it may be. This is not the world it should be and it never was or will be. Human nature will always see to that. Wanna solve the problems? Obliterate the human race.

Mon, Jan 7, 2013 Bob Virginia

Google was operating under the laws. One could argue that to pay more in taxes when there is a legal way to pay less would be a dereliction of duty as a stock company. It may be that we don't like the tax laws as they're currently set up--then let's get them changed! Getting on a soap box and whining because Google took advantage of the opportunities afforded to it under the law is a demonstration of ignorance. It's probably true that all of these laws are the result of corruption and greed, so let's change them if we think they're wrong!

Mon, Jan 7, 2013 Greg Wisconsin

Agree: a very corrupt Congres has written these laws that allow corporations to take their money offshore and do so taxfree. We keep hearing that Congress approval rating is around 10% but we keep electing these people. Eric Schmidt of course was offered a prestigious post because he donated a lot of money to the Obama campaign. The payoff was in effect.

Mon, Jan 7, 2013 Brent

Really Barney? technically legal? there is no technically legal. Things are either legal or illegal there is no grey area. If you are in disagreement with the law then campaign with your congressman and senators to change the law but don't whine that they should pay more than what is required by the law because you feel they should be more responsible.

Mon, Jan 7, 2013

There are God's laws (such as treat others how you would like to be treated, love thy neighbor, etc) and there are humans laws (usually don't screw others over or you'll be punished, though we have to keep rewriting them to explain, this is bad, this is also bad, etc.). It's funny when people think they can legally get away with things because the human laws didn't exactly specify what they did and then say they are not confused. Then they discover the law of karma.

Mon, Jan 7, 2013

A corporation has an obligation to maximize shareholder return. The fault lies with our Congress that put those loopholes in place, not with the companies (regardless of who they are) for taking advantage of what they are allowed to do. Removal of the root cause of the problem should be the priority.

Mon, Jan 7, 2013 Just Visiting

You sound surprised. Corporations are not allowed by their stockholders to do what is right, only what is most profitable while remaining legal. To do anything less would be to open oneself to a stockholder lawsuit. Schmidt is merely stating the rules under which corporations must operate these days.

To change this one must either change the laws governing corporations or seek unincorporated or non-profit entities to do business with.

Besides, "Don't be evil" is still a long way from "Always be good."

Add Your Comment Now:

Your Name:(optional)
Your Email:(optional)
Your Location:(optional)
Please type the letters/numbers you see above

Redmond Tech Watch

Sign up for our newsletter.

I agree to this site's Privacy Policy.