This is what we are dealing with folks.
|brotherhood of LAN|
Foolish, I'm sure there are government bureaucrats who would be more than happy to wipe the smirk off their face.
Tonight Margaret Hodge, chairman of the powerful House of Commons Public Accounts Committee, which recently cross examined Google UK on its tax affairs said Mr Schmidt should be ashamed rather than proud of his company’s tax bill
“For Eric Schmidt to say that he is ‘proud’ of his company’s approach to paying tax is arrogant, out of touch and an insult to his customers here in the UK,” she said.
“Ordinary people who pay their taxes unquestioningly are sick and tired of seeing hugely profitable global companies like Google use every trick in the book to get out of contributing their fair share.
Google should recognise its obligations to countries like the UK from which it derives such huge benefits, and pay proper corporation tax on the profits it makes from economic activity here. It should be ashamed, not proud, to do anything less. ”
Google's unpaid taxes in the UK amount to a fair few new hospitals, wages for thousands of nurses and teachers, and a whole load of stuff the government are telling us they can't afford any more. So, Google's actions are directly hurting their customers. Profits of a million dollars every 7 minutes are obscene.
I certainly don't hold up a candle for Google but it ill becomes politicians to make so much noise about this. They are the ones who set the rules and if Google and thousands of other companies didn't try to find ways of mitigating their tax burden (which they have done since time immemorial, quite legally, might I add) the shareholders would soon be in revolt. If these governments don't like it then let them pass the necessary legislation to enforce higher taxes on multinational companies, then those same companies could decide whether to trade in higher tax countries or not. Simples.
It is down to the politicians to sort out the legislation, but there still is a PR aspect here and Google just failed at it.
Starbucks were also criticised about their tax spend and came out promising to pay more tax - and they still got slammed for it. Ended up showing weaks sales for the quarter in comparison to Costa.
That, however, shows how the public feel about it - making some effort to vote with their money. That approach doesn't really work with Google though, does it? That would need businesses to not spend their money with Google and I can't see that happening anytime soon.
The market is crying out for some decent competition - Bing, FB and Linkedin combined can barely compete with Google in terms of ad spend in a lot of markets. And I would fully expect analytics to move to a paid model next year, there are loads of changes coming out (Google wants your offline customer data, not just the online stuff...).
Politicians may make the rules, but SEOs have handed a lot of the market(s) to Google on a plate by jumping all over Adwords, Adsense, Analytics, Gmail and so on.
Google may have shot themselves in the foot with this one, it brings even more attention to the issue. It may be legal but is it right ?
What is forgotten is that they are also not paying US or local state taxes as well, causing closure of community services in parts of the US due to less state income, it's not just a UK issue.
I actually emailed Margaret Hodge pointing this out and mentioning another US company they missed.
Amazingly I actually got a reply - even though she had a Google email address :)
<added> have a newspaper article in front of me.. Beware of being deluded by Power</added>
Google just bought 2 billion worth of love, but from the wrong group.
If they want to be "stateless", why don't they go find an asteroid to mine and build their headquarters there?
My local (UK) hospital has a big sign in the foyer: "Do Not Use Google". They have an arrangement with Yahoo for their own website to carry a Yahoo search box and they get commission for every paid click. Good business for them but a headline like that would have been unthinkable only a few months ago.
Every newspaper I read says at least something about G's tax avoidance. This will not go away and could hurt them badly, we are pretty good at boycotts over here (H**l, we invented the word!).