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As Long As It’s Legal, Corporations Will Act Selfishly

(image) There’s a hubbub in the press this week about Google employing a “Double Irish – Dutch Sandwich” tactic to funnel profits from Europe over to Bermuda, where there is no corporate income tax. Reuters reports that the company saved around $2 billion in taxes by employing the structure, which, as far as I can tell, is perfectly legal.

Of course, there’s a difference between that which is perfectly legal and that which seems, well, unseemly. Creating multiple shell companies across four nation states so as to avoid paying taxes may make shareholders happy, but it sure has pissed off a bunch of (revenue starved) countries in the EU. The article mentions the UK, France, and Italy as all investigating Google (and Facebook, among others) for potential abuse of the tax code.

To which I must say this: What else did you expect?!

Corporations will act exactly in their own best interest, period end of sentance. When it comes to saving billions of dollars, corporations won’t “do the right thing” or “step up and pay their fair share” – certainly not if there is *any* legal possibility that they can get away with avoiding doing so.

I very much doubt anything is going to change here, for any number of complicated reasons. The Irish have their own competitive reasons for ignoring US IP transfer law, the Dutch have similar reasons for allowing their corporate structures to exist. And Bermuda? Please. Google (and many other companies like it) is simply acting like a corporation – which at times feels like an excuse for a bunch of humans to act in very un-human like ways. Behold what we have created, and wonder.

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