Anyone who thinks hiking tax rates, as President Obama wants to do, is a wise way to raise government cash should ponder Google’s fancy tax footwork in Bermuda.
Bloomberg News last week reported that the Internet search-engine company shifted $10 billion in revenue last year to a shell company in the British territory.
The move cut Google’s tax bill in half, saving it $2 billion — and infuriating officials in numerous European countries.
Those countries, obviously, would love to get their paws on the now-vanished tax revenue, especially since their markets generate much of Google’s profits.
Britain, France and Italy are probing the shift. A European Union official, Algirdas Semeta, called it “scandalous” and “an attack on . . . fairness.”
But what do they expect folks to do when their tax rates range from 24 percent to 35 percent — and Bermuda’s is . . . zero?
“We [moved funds] based on the incentives that the governments offered us,” says Google boss Eric Schmidt (whom Team Obama was once said to have been eyeing for treasury secretary).
Obama and other wannabe tax-hikers should admit it: Steep levies have consequences. And while the marquee issue in the fiscal-cliff talks is individual, not corporate, tax rates, the same principle holds.
Actor Gérard Depardieu became the latest wealthy Frenchman to make that point recently when he joined a wave of his fellow well-off countrymen hopping the border after President François Hollande boosted France’s top rates to 75 percent.
Here, meanwhile, numerous small businesses set to be hit hard by Obama’s hikes say they’ll trim payrolls to stay afloat.
Great news for the unemployed. (Not.)
Obama says he wants to sock the rich for the sake of fairness. But if that spurs the rich to tear up their tax bills (legally or not), how “fair” — or wise — is that?