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Redmond Tax Dodge

Months ago Google was roundly beaten for avoiding massive amounts of U.S. taxes. The trick, as I recall, is to claim your investment and expenses in America and book your profits overseas.

Under this approach Google pays something less than 2.5 percent, a fair bit less than the 35 percent U.S. corporate tax rate. It's all perfectly legal, and the short-term PR black eye is a small price to pay for savings billions every year. And some of that money goes back into the economy in the form of lobbyist fees and campaign donations!

Microsoft, as a shareholder-owned company, likewise does all it can to maximize profits. And this means the company parks 89 percent of its cash overseas.

However, unlike Google, Microsoft seems to pay its fair share, and last year paid a rate of 24 percent.

Tax thoughts welcome at dbarney@redmondmag.com.

 

Posted by Doug Barney on 09/24/2012 at 1:19 PM


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Reader Comments:

Tue, Sep 25, 2012 Englebart

Citizens should pay taxes. Not corporations. As the long as the CEOs are not dodging their taxes it should all even out. Corporations with more cash will spend more on R/D or try to expand which will hire more employees who will pay taxes.

Tue, Sep 25, 2012 Joe Panama City, FL

Not only is the US hostile via taxes, but also all of the regulatory agencies as well. That's why so many multi-national companies have moved their headquarters off-shore, to the Bahamas and Ireland.

Mon, Sep 24, 2012 Chris

Who is paying these taxes? Not Microsoft. I pay them every time I purchase a Microsoft product, such as when I purchased Office 2010 Professional. It was added to the cost of the product. So please, Microsoft, save us all some money and follow Google's lead. I don't want to pay a dime more for your product just for you to be the middle man for the government.

Mon, Sep 24, 2012 MikeC Kansas

When tax time comes I also look for everything I can do to get the biggest refund check and it’s perfectly legal and acceptable. But when a large corporation does it suddenly it is wrong? The companies aren’t at fault, it’s the tax code!

Mon, Sep 24, 2012 ibsteve2u Commonwealth of Pennsylvania

Perhaps Microsoft "parks 89 percent of its cash overseas" for a reason? I heard a rumor that American financial institutions of a size sufficient to handle Microsoft-ish chunks of change have been having a little problem demonstrating competence in the trust and reliability department ever since a hot little number called "deregulation" hit the Street.

Mon, Sep 24, 2012

I guess MS has higher values than Google

Mon, Sep 24, 2012 Kenneth Southern USA

To the GOP sheep who does not mind Corps screwing U.S. taxpayers. I am sure this is a practice Google only recently started in the last 3 years right? NOT!!!! Keep partisan politics out of tech news.

Mon, Sep 24, 2012 Max Orlando, FL

Hey ... it is what it is! Google is smart. Our tax environment is becoming increasingly business-hostile. If I were Google I'd park my money overseas, too: out of Obama's reach.

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