Big Business Buying Influence With Democrats: Google Pays 2.4% Federal Taxes
Posted by iusbvision on October 24, 2010
This post is another in our series of how big business loves big government. As we have shown you so many times before in our “Corporatism” category it is not the Republicans who are favored by large corporations. In spite of the constant rhetoric from the Democrat Leadership it is Democrats who receive overwhelming favor from Wall Street, the banks, and international business:
And who says that spreading the cash around doesn’t buy influence; the Goldman Sachs guys and lobbyists are all over the White House. In fact after making promises to reign in the corporate lobbyists in the 2008 campaign, Obama and the Democrats relaxed the restrictions on them. Of course this influence peddling and kick backs was all over the mortgage crisis as well:
Corruption You Can Believe In: Failed Sub Primes and Mortgage Fraud Lenders Funneled Money to Dodd & Obama the Most. Fannie & Freddie Gave $200 Million to Partisans-Most Went to Democrats! Dodd, Obama Among Top Recipients. Republicans Attempted to Pass Reforms-Blocked by Democrat Leadership!
Fannie Mae and Freddie Mac has faced no scrutiny in the new financial regulations even though it was the single largest reason for the economic collapse. After already receiving $148.2 billion of your money Fannie Mae/Freddie Mac is now set to receive another bailout of between $154 to $215 billion. Democrats are expected to pass the bailout during the upcoming lame duck session of Congress after the election. And of course do you remember the how AIG was using YOUR bailout tax dollars to pay their execs big bonus cash:
Democrats put language in the ‘Stimulus Bill’ to protect AIG executive bonuses. Dodd and Obama were the number one recipients of money from AIG. Distraction in full swing & Congress’ plan to tax the bonuses at 100% wont pass constitutional muster.
Of course the Fannie Mae/Goldman Sachs lobbyists revolving door in the White House continues.
And do you remember how British Petroleum got all those safety waivers for that oil platform from the Obama Administration leading up to that big oil spill? Obama was top recipient of BP-related dollars in 2008 receiving almost double what John McCain received.
Tobacco and Food Giant Philip-Morris lobbied Democrats for on got new regulations and taxes on tobacco, but they were done in such a way that Philip-Morris benefited. You see the narrative from politicians and leftist academics is that “regulation is done for the benefit of the people to prevent the excesses of unrestrained capitalism (freedom)”, the reality is that like in this case, the Google case we write about below, Fannie Mae, banks etc etc the regulations are designed to pick winners and losers, they are slanted to help those who make donations and wield influence. The result is corrupt “Chicago Style” regulation that leads to the very excesses that the Democrats used as an excuse to do more regulation and pick more winners and losers which results in more excesses.
Case in point is the new “Wall Street Financial Regulation Bill” and Democrats went on and on about how they “clamped down”, its pure nonsense. The new law gives the government new powers to shut down businesses without judicial review (no one should have that kind of power and it will not be the big donors who will be shut down, it will be there competition or those who donate to “the wrong side”. The new law also creates an ongoing, endless bailout fund that benefits Wall Street where as smaller businesses will not have access to it.
Caught: White House Political Collusion in SEC Investigation. White House Wants Unlimited Bailout and Siezure Power. Can anyone be trusted with that much power? UPDATE – All the president’s Goldman Sachs men
This brings us to Norton’s First Law:
Big business loves big government, which is why big business loves domestic taxes and regulation because it keeps the small and medium sized competition out of the competition. A result is higher prices, so ultimately it is you who pays and the poor who are hardest hit. (Big business often gets loopholes written in the laws for themselves such as Nancy Pelosi trying to get a part of the tuna industry exempted from the minimum wage law).
Ok so now onto our friends at Google.
Google brings in billions of dollars in revenue and odds are you pay a higher tax rate than they do. Bloomberg News:
Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes
Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.
Google’s income shifting — involving strategies known to lawyers as the “Double Irish” and the “Dutch Sandwich” — helped reduce its overseas tax rate to 2.4 percent, the lowest of the top five U.S. technology companies by market capitalization, according to regulatory filings in six countries.
“It’s remarkable that Google’s effective rate is that low,” saidMartin A. Sullivan, a tax economist who formerly worked for the U.S. Treasury Department. “We know this company operates throughout the world mostly in high-tax countries where the average corporate rate is well over 20 percent.”
The U.S. corporate income-tax rate is 35 percent. In the U.K., Google’s second-biggest market by revenue, it’s 28 percent.
Google, the owner of the world’s most popular search engine, uses a strategy that has gained favor among such companies as Facebook Inc. and Microsoft Corp. The method takes advantage of Irish tax law to legally shuttle profits into and out of subsidiaries there, largely escaping the country’s 12.5 percent income tax. (See an interactive graphic on Google’s tax strategyhere.)
The earnings wind up in island havens that levy no corporate income taxes at all. Companies that use the Double Irish arrangement avoid taxes at home and abroad as the U.S. government struggles to close a projected $1.4 trillion budget gap and European Union countries face a collective projected deficit of 868 billion euros.
Google, the third-largest U.S. technology company by market capitalization, hasn’t been accused of breaking tax laws. “Google’s practices are very similar to those at countless other global companies operating across a wide range of industries,” said Jane Penner, a spokeswoman for the Mountain View, California-based company. Penner declined to address the particulars of its tax strategies.
Facebook, the world’s biggest social network, is preparing a structure similar to Google’s that will send earnings from Ireland to the Cayman Islands, according to the company’s filings in Ireland and the Caymans and to a person familiar with its plans. A spokesman for the Palo Alto, California-based company declined to comment.
The tactics of Google and Facebook depend on “transfer pricing,” paper transactions among corporate subsidiaries that allow for allocating income to tax havens while attributing expenses to higher-tax countries. Such income shifting costs the U.S. government as much as $60 billion in annual revenue, according to Kimberly A. Clausing, an economics professor at Reed College in Portland, Oregon.
U.S. Representative Dave Camp of Michigan, the ranking Republican on the House Ways and Means Committee, and other politicians say the 35 percent U.S. statutory rate is too high relative to foreign countries. International income-shifting, which helped cut Google’s overall effective tax rate to 22.2 percent last year, shows one way that loopholes undermine that top U.S. rate.
Democrats always talk about taxing the “rich billionaires” but the truth is that huge Democrat contributors like Google, George Soros and John & Teresa Kerry will never pay much in taxes. This is why the tax code is 60,000 pages long and filled with loopholes and corruption. So who ends up paying all these taxes designed to stick it to “the rich”? It is small to medium sized business, and the producer class that is soaked. Remember what I said about how big business loves big government? Who can create an upstart company and actually compete with Google when they pay 2.4% tax and you have to pay 39.9%? How can you claim that you are for jobs when you are sticking it to those who employ the most people Democrats? Small business does almost 80% of all hiring in the United States.
I can hear the objection already “so are you saying that Republicans never added to or put a loophole in the tax code” of course I am not saying that, but what I am saying is that one party is way ahead in creating this mess and we all know what party that is. The GOP is the party that has been trying to repeal/reform the tax code or just replace it altogether with a Steve Forbes style flat tax or a Neil Boortz style Fair Tax. It is Democrats who have fought tooth and nail for the status quo.
Google has given Obama over $800,000 and $270,00 to Democrats in this election cycle alone. So while Obama attacks the Chamber of Commerce (2) which represents most small to medium sized business Google skips out on $60 billion in taxes with the Obama Administration not saying a peep.
Of course Google isn’t alone. US News:
Microsoft is the top contributor with 60 percent of its nearly $1.3 million in contributions going to Democrats. This number reflects contributions made to incumbents, challengers, and national party committees. [See where Chuck Schumer’s campaign cash comes from.]
Contributions from those associated with Cisco make it the second highest contributor in the industry with $557,919 in donations, 67 percent of which went to Democratic candidates and committees. Google is next, with $456,119 in contributions, 75 percent of which went to Democrats, followed by Intel, with 57 percent of its $373,205 in contributions going to Democrats. The fifth-most-prominent computer/internet company, Hewlett-Packard, also favored Democrats, despite the fact that its former CEO, Carly Fiorina, is running as a Republican in California’s high-profile Senate race. Those associated with Hewlett-Packard gave $367,460, with only 40 percent going to Republican candidates and parties.
Google’s help to the Democrats doesn’t just go as far as campaign dollars. Google has often delisted Conservative stories and news sites from searches of Google news. Google owned YouTube has removed video’s from conservative pundits including Michelle Malkin. David Zucker had his video flagged as “18 and over only” until it created a big enough fuss where Google relented (LINK – LINK). This very author has been threatened by YouTube as well, which is why I have stopped posting on my YouTube channel which so far as gotten 1.5 million views. I am now posting at DailyMotion and Eyeblast.tv.
McDonalds and 29 other large corporations have gotten ObamaCare waivers because the new law makes health insurance costs so expensive. Where are the waivers for the smaller companies that still have over 50 employees and are getting creamed by this new law?
So lets meet the evil rich shall we?
Lets start with Leland Furniture Company in Grand Rapids, Michigan
Indeed this small business is in the top tax bracket because they bring in on paper over $250,000 a year. Of course most of that money goes back into the business paying his 25 employees, buying material and tools, paying property taxes etc.
On paper most small businesses that employ more than a dozen people hit $250,000 on paper. The truth is that there are few people who make over $250,00 per year in taxable wages, the vast majority who qualify for the top marginal tax rate in this category are small business S-corps that do most of the hiring. Think of a family business that owns 3 pizza shops and works 11 hours a day keeping the business running? With that kind of hard work shouldn’t they have a tax rate that looks more like Google’s?