RUSH: ‘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.’ Now, the immediate reaction is: ‘You liberal hypocrites! Eric Schmidt, Sergey Brin, all you guys at Google. Here you are preaching all this liberalism to everybody else. You’re spying on us with your street cameras. You’re denouncing the fact that people don’t pay enough taxes. Look what you do!’ That’s the first reaction. ‘Rich liberals, hypocrites. Liberalism’s good for everybody but them.’
Like Steve Jobs. Look at Google. It’s going to all kinds of obscure, elaborate lengths to avoid taxes, and all of them are legal. And look at Jobs. Look at Apple. He ships everything from China. Nonunion, Foxconn manufacturers, Shenzhen. He ships them FedEx, nonunion. You know what an iPhone…? I read this the other day. An iPhone made in America would cost $5,000, which is why they’re not made here. Nobody could afford them. An iPhone made in America right now, given what unions charge and everything thrown in, is $5,000. That’s why an iPhone costs anywhere from $300 to $500 made in China. No unions involved at any level — shipping, manufacturing — and yet Jobs a big liberal, with Algore on the board, promoting big liberal causes. And yet they don’t go out of their way to be good liberals. They don’t go out of their way to pay more taxes.
Why? Why is this? They’re businesspeople first. Liberalism is a close second. Publicly they’re liberals first. Behind the closed doors of the boardrooms, they are businessmen first. And everything they’re doing is legal. I remember when I openly announced, proudly so, that I was leaving New York to avoid confiscatory taxation. I had people telling me I was not being patriotic. I was being unpatriotic. I had a duty to stay and ‘pay my fair share’ in New York. I said, ‘No, I think I’m being smart. I’m keeping more. I think I do better with my money than some unnamed, unknown bureaucrat and bureaucracy. I’ll do far more for people with my money than the government will do with it.’ That’s my attitude. Now, Google, if you had a chance to only pay 2.4% in taxes, would you take it? The liberal would have you believe he wouldn’t, that he’ll pay what’s his fair share because he’s a good citizen and a good person. But yet there are the laws on the books.
And note where this money is. And this is the second key. Note where Google’s money is that they’re not paying taxes. It’s not domestic. It’s foreign. There’s a column in the Wall Street Journal that’s a companion piece, unintended, of this Google story. It’s a way (government policy-wise, tax policy-wise) to get all this money that American corporations that operate internationally are sheltering overseas. Get it circulating back in America. It’s a way to do it that would ramp up economic growth, that would cause hiring. Imagine if Google could take this $60 billion and pump it into growth of the business rather than pay taxes on it, which is what they’re doing. And look at what’s happening to them! They’re growing by leaps and bounds. I mean, the anecdotal evidence, historical evidence, empirical evidence is there in front of everybody’s face to see exactly what needs to happen to cause this economy to rebound.
Anyway, set the table, I want to get into more detail as the program unfolds. I’m a little long here, didn’t want to stop myself ’cause it was too good in this rant.
BREAK TRANSCRIPT
All right: ‘Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes.’ And of course they’re wringing their hands, ‘$60 billion lost to the government!’ The focus here should not be the 2.4% tax rate; it’s the fact that they’re keeping the money offshore, not bringing it onshore, to avoid double taxes. Forget the fact that they’re liberals. I mean the hypocrisy is what it is. But the tax law here is another thing.
BREAK TRANSCRIPT
RUSH: Google gave the Obama campaign $803,436. You could say that it was foreign money now, given how much foreign money they are not paying taxes on at Google. Google was Obama’s fifth largest contributor, a special interest. Now, here’s the headline again: ‘Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes.’ Of course the story is the poor government is out $60 billion. That’s not the way to look at this. Why feel sorry for a fatted calf? What in the world is there to feel sorry about for the US government? Should they not feel sorry for us? At any rate, I keep distracting myself here and I’m gonna stay focused on this.
‘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.’ Have you ever heard of the Double Irish or the Dutch Sandwich? Do you have tax lawyers advising you of these strategies? It sounds like a Kennedy maneuver, actually, the Double Irish, the Dutch Sandwich, the waitress sandwich. It sounds like a Kennedy, Chris Dodd maneuver. I didn’t know about them, but they’re legal, they’re entirely legal. Here’s Google, big libs, Steve Jobs, big lib, they want you to think that they pay their fair share, when everybody else pays their fair share, and look what they do. Every chance they get to avoid paying taxes, they take it. ‘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.’
From the UK Times, December of last year: ‘Google Pays No Tax on £1.6bn in Britain.’ Google is accused of ducking its social responsibility. ‘Google, the internet giant whose informal corporate motto is ‘don’t be evil,’ did not pay any tax on its £1.6 billion advertising revenues in Britain last year.’ And they’re eschewing their corporate social responsibility. (interruption) How the bloody heck did they get away with it? They bloody heck got away with it because it’s legal. What did I tell you the other day, Snerdley, about who writes the tax laws? What did I tell you about why they’re not going to be changed? What was the point of, you know, all this talk about we need a flat tax, FairTax, yeah, we do, no question about it. Who writes these tax laws? All these liberals who claim the rich aren’t paying their fair share. Really? The rich aren’t paying their fair share; is that right? How does that happen? It happens when loopholes are put in there by liberal Democrats. Democrats have been running the House Ways and Means Committee up ’til 1994 for 40 years, and since 2007 they have been running the Ways and Means Committee.
Now, I want to go to a column that ran a couple days ago in the Wall Street Journal: ‘The Overseas Profits Elephant in the Room.’ It’s co-written by John Chambers and Safra Catz. John Chambers is the CEO of Cisco. They make routers and stuff, another high-tech firm. ‘During last year’s ‘Jobs Summit’ –‘ you know, I’d forgotten about that. Do we not need another jobs summit? Remember that jobs summit? We had a jobs summit in December at the White House, and everybody went away to their study groups, came back in three hours, reported to the leader of the regime, and that was supposed to be problem solved. Well, Mr. Chambers says: ‘During last year’s ‘Jobs Summit,’ President Obama said he was open to any good idea to get the economy moving again. Today he should be especially so, since Washington’s many monetary and fiscal policy decisions have not been able to spur the robust growth or job expansion that we all would like. And yet there is a simple idea — the trillion-dollar elephant in the room — that has apparently been dismissed for no good reason.
‘One trillion dollars is roughly the amount of earnings that American companies have in their foreign operations — and that they could repatriate to the United States. That money, in turn, could be invested in U.S. jobs, capital assets, research and development, and more. But for U.S companies such repatriation of earnings carries a significant penalty: a federal tax of up to 35%. This means that U.S. companies can, without significant consequence, use their foreign earnings to invest in any country in the world — except here.’ Which is what Google is doing. They’re doing it. They are avoiding the 35% tax rate here. If they expatriate the money back they’re looking at double taxation. ‘But, Rush, but, Rush, they’re liberals and they’re good citizens and they care about funding the government.’ No, they don’t. They care about you doing it. They thrive on you thinking they’re good citizens. They thrive on you thinking they’re good people.
Remember the ‘we’re supposed to look the other way’ monologue the other day after Dingy Harry and Sharron Angle’s debate? We’re supposed to look the other way while they drive women off the bridge and kill ’em. We’re supposed to look the other way while they promote abortion. We’re supposed to look the other way while they don’t pay, all because they’re good people, all because they have compassion. We’re supposed to look the other way and really ignore all the rotgut things that they do, because they are good people. They’re liberals. They pay their fair share. They believe in government.
‘The U.S. government’s treatment of repatriated foreign earnings stands in marked contrast to the tax practices of almost every major developed economy, including Germany, Japan, the United Kingdom, France, Spain, Italy, Russia, Australia and Canada, to name a few. Companies headquartered in any of these countries can repatriate foreign earnings to their home countries at a tax rate of 0%-2%. That’s because those countries realize that choking off foreign capital from their economies is decidedly against their national interests.’ By the way, have you checked out Canada’s economic growth rate since 1997? I mean just a few miles to the north of us there is an economic boom going on in what arguably is a socialist country. Check it out the next time you have a chance to check something out. ‘Especially with corporate bond rates falling below 4%, it’s hard to imagine any responsible corporation,’ including Google, ‘repatriating foreign earnings at a combined federal and state tax rate approaching 40%.’ Why would they do it?
‘Many commentators have pointed to the large cash balances sitting on U.S. corporate books as evidence that the economy is still stalled because companies aren’t spending,’ or because small business isn’t borrowing. ‘That analysis misses the point. Large cash balances remain on U.S. corporate books because U.S. companies can’t spend their foreign-held cash in the U.S. without incurring a prohibitive tax liability.’ Now, some people would say it’s only 35%. They get to keep 65%, why would they want to screw the government out it? If there’s a place to spend it where it’s taxed less, that’s what they’re going to do. Remember, a company doesn’t exist to support the government. A company doesn’t exist to give you health care. A company does not exist to provide jobs. A company does not exist to make sure the community remains crime free. A company does not exist to make sure that you don’t eat trans fat. A company exists to make a profit based on selling a product or service that customers want, desire, love, and like, and whose shareholders invest in and are rewarded as their investment increases in value. A to B, simple. And anything that gets in the way of that pattern is gonna harm the corporation, they’re not going to do it, unless they’re scared to death of government, have to pay protection racket fees, bribes, and what have you, in order to operate.
Back to Mr. Chambers’ piece here: ‘By permitting companies to repatriate foreign earnings at a low tax rate — say, 5% — Congress and the president could create a privately funded stimulus of up to a trillion dollars,’ private sector stimulus. ‘They could also raise up to $50 billion in federal tax revenue. That’s money the economy would not otherwise receive. The amount of corporate cash that would come flooding into the country could be larger than the entire federal stimulus package, and it could be used for creating jobs, investing in research, building plants, purchasing equipment, and other uses. It could also provide needed stability for the equity markets because companies would expand their activity in mergers and acquisitions, and would pay dividends or buy back stock. And when markets go up, confidence increases and businesses and consumers begin to spend.’ It’s simple.
‘The $50 billion boost in federal tax revenue, meanwhile, could be used to help put America back to work. For example, Congress could use it to give employers — large or small — a refundable tax credit for hiring previously unemployed workers (including recent graduates). The tax credit could equal up to 50% of a worker’s first-year and second-year wages, capped at $12,500 per year (or $25,000 total per new hire). Such a program could help put more than two million Americans back to work at no cost to the government or American taxpayers. How’s that for a good idea?’ John Chambers, chief executive officer, Cisco Systems. The coauthor, Ms. Catz, president of Oracle, two high-tech corporations, there you have it. A trillion dollars is over there, and over there, up there, and down there. It ain’t here. Could be here. It’s in Canada because Canada only charges 2% tax rate. We charge 35%, and of course with this regime, corporations are evil, they’re the enemy, they’re the target. Anybody suggesting this seriously would be accused of being in the back pockets of the special interests and so forth. And, of course, it is considered immoral for a corporation to only pay 5% in taxes, for some reason it’s immoral.
So why would Google pay 35% when they can pay 2.4%? ‘Because, Mr. Limbaugh, they’re good liberal corporate citizens. Yeah, you dummkopf, that’s what they want you and everybody to believe, Mr. New Castrati. If all corporations are evil, how does Google get a pass just because they’re a bunch of liberals anyway?