THURS 7pm IMS

Isaac Miller

Google Globalization Grievances: Corporate Taxes

With the expansion of google into a multi-billion dollar global search engine
powerhouse, one must ask how, with multiple American companies such as these, we could be
in such financial peril. According to the New York Times, $506 billion is forecast for U.S. deficit
in the current fiscal year ending in September 2014. According to Bloomberg News, Google Inc.
cut its taxes by $3.1 billion in the last three years by moving most of its foreign profits through
Ireland and the Netherlands to Bermuda. The actual process is as follows: Irish operating
company sells ads with their actual physical employees working from Dublin. Continuing from
Dublin, payments are made to a smaller- scale, Dutch branch with no physical employees on
site .The process continues, duplicating the last step to a Irish-owned company at their
Bermuda-headquarters, again with no employees. This drops the US imposed 35 percent
corporate tax on Google Inc., listed headquarters in California, United Stated, to 2.4 percent;
less than 7 percent of the original US tax rate.
Googles 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. (Bloomberg.com)
Googles substantial global earnings have also been reported to have increased the
deficits in the UK as well, where the corporate tax is 28%. Instances such as these have been
said to be the primary factor in European Union countries collective deficit of 868 billion euros

THURS 7pm IMS

Isaac Miller

to date. As mentioned in International Business: The Challenge of Global Competition, the five
drivers of globalization are political, technological, market, cost, and competitive.
Googles globalization operations, particularly within the cost driver encompassed with
Googles convenience and popularity ultimately have a negative effect of the international
environment as a whole. To negatively affect the economies of multiple countries through
completely (and unfortunately) legal tax dodging is an entirely unethical practice adopted by
most of the large corporations you and I would recognize by something as slight as a color
scheme or even the shape of their company logo. The top five technology companies (Google
Inc., Apple, Microsoft, IBM, and Oracle) all have similar tax strategies keeping them in the legal
realm.
Politically, Google has contributed $1,885,783 in campaign contributions and
$9,310,000 for lobbying in 2014, ($15,800,000 in 2013). 91 out of 114 Google Inc. lobbyists in
2013-2014 have previously held government jobs, so the people Google rallies to protect their
interests arent amateurs. Are these contributions given to people interested in community or
to people willing to protect Googles interests? In the patterns Ive recognized, the Google
contributions are made by seven or eight google employees, so as to avoid suspicion of buying
politicians. An Example, Ro Khanna, was accused of working for large corporations to increase
outsourcing and decreasing corporate taxes. His convenient response was "There should be
some linkage to investment to create jobs and bringing back dollars at a reduced corporate
tax." The mailer accusing Ro Khanna had many underlying racist themes and the only response
he felt necessary was to address the stance accusation on corporate politics. This, to me,
showed his priorities, clear as day.

THURS 7pm IMS

Isaac Miller

Another example is Sen. Cory Booker. The campaign contributions are disguised far more
cleverly in this instance. This, in my opinion, shows Googles indomitable political influence. The
political globalization driver is not only an affect to companies, but companies can affect the
political driver to set the stage for their most profitable global platform.
The bulk of Senate candidate and Newark Mayor Cory Bookers personal wealth, according to
a blockbuster New York Times expose, comes from a previously unknown company called
Waywire, which styles itself as a socially conscious alternative to YouTube. Waywire counts
Oprah Winfrey, Google CEO Eric Schmidt, and Lady Gagas manager Troy Carter among its
investors, but the tiny company (2,207 total visitors in June compared to YouTubes 160 million)
looks more like a multimillion dollar gift to Cory Booker than a real business. Given Google CEO,
Eric Schmidts involvement in Bookers campaign, its reasonable to speculate the plan was for
Google, the parent company of YouTube, to buy out Waywire and provide Booker with a
massive windfall at some point in the future.
The quote misses the Lady Gaga mother monster: Paws Up campaign by Google or that
Google shifted search algorithms to monetize blogs and social media, making the OWN Oprah
Network increase viewership by 28% in the 12 months, delivering most-watched quarter in the
networks history. It all ties to google.

I believe the globalization of companies as popular as Google, operating with no regulation on

corporate tax evasion imposed that bans practices such as mentioned above, allows the
corporations that largely affect the international environment to operate on a substandard set
of ethics and community obligation; consequently damaging the global economy.