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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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