Posts Tagged ‘Florida’

Photo: Father and son at first and last Space Shuttle launches, 30 years apart

12 Jul

"Father and Son: STS-1 and STS-135," a photo by Chris Bray, who is the younger of the two in these side-by-side captures from the very first shuttle launch thirty years ago, and the final one, last Friday. "The picture we waited 30 years to complete."

(Flickr, via Reddit and Laughing Squid.)


How Google’s Refusal To Pay US Taxes Means US Taxpayers Fund Its Innovation, Resulting In A Benefit Of $100/Share

21 Oct

We first discussed the topic of cash repatriation (or lack thereof) about a month ago. Since then, more and more seem to be waking up that of the over $1 trillion in cash on the corporate "balance sheet" not only is most of it unusable domestically (without being taxed at the marginal tax rate upon repatriation), but that companies are effectively boosting earnings by not paying taxes (money which should be going to the US coffers to pay for the same corporate friendly policies enacted by the government, that is currently being funded almost exclusively by individual taxpayers, and the Fed of course). And massively so. An expose in Bloomberg details how courtesy of various, perfectly legal, tax avoidance schemes, Google's effective tax rate is 2.4%, which has resulted in $60 billion in less taxes paid to the US, and which has boosted the company's stock price by a whopping $100/share!

Per Jesse Drucker:

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.

“It’s remarkable that Google’s effective rate is that low,” said Martin A. Sullivan, a tax economist who formerly worked for the U.S. Treasury Department. “We know this company operates throughout the world mostly in high-tax countries where the average corporate rate is well over 20 percent.”

How does Google go about legally sheltering essentially all of its net income from the IRS?

Google, the owner of the world’s most popular search engine, uses a strategy that has gained favor among such companies as Facebook Inc. and Microsoft Corp. The method takes advantage of Irish tax law to legally shuttle profits into and out of subsidiaries there, largely escaping the country’s 12.5 percent income tax. (See an interactive graphic on Google’s tax strategy here.)

The earnings wind up in island havens that levy no corporate income taxes at all. Companies that use the Double Irish arrangement avoid taxes at home and abroad as the U.S. government struggles to close a projected $1.4 trillion budget gap and European Union countries face a collective projected deficit of 868 billion euros.

As a strategy for limiting taxes, the Double Irish method is “very common at the moment, particularly with companies with intellectual property,” said Richard Murphy, director of U.K.- based Tax Research LLP. Murphy, who has worked on similar transactions, estimates that hundreds of multinationals use some version of the method.

The high corporate tax rate in the U.S. motivates companies to move activities and related income to lower-tax countries, said Irving H. Plotkin, a senior managing director at PricewaterhouseCoopers LLP’s national tax practice in Boston. He delivered a presentation in Washington, D.C. this year titled “Transfer Pricing is Not a Four Letter Word.”

And with the hypocricy of such ethical stalwarths as Warren Buffett now having been exposed for all to see, it is only time that the company's which "does no evil" is exposed for its own "do as I say, not as I do" practices:

Google’s transfer pricing contributed to international tax benefits that boosted its earnings by 26 percent last year, company filings show. Based on a rough analysis, if the company paid taxes at the 35 percent rate on all its earnings, its share price might be reduced by about $100, said Clayton Moran, an analyst at Benchmark Co. in Boca Raton, Florida. He recommends buying Google stock, which closed yesterday at $607.98.

The company, which tells employees “don’t be evil” in its code of conduct, has cut its effective tax rate abroad more than its peers in the technology sector: Apple Inc., the maker of the iPhone; Microsoft, the largest software company; International Business Machines Corp., the biggest computer-services provider; and Oracle Corp., the second-biggest software company. Those companies reported rates that ranged between 4.5 percent and 25.8 percent for 2007 through 2009.

Google is “flying a banner of doing no evil, and then they’re perpetrating evil under our noses,” said Abraham J. Briloff, a professor emeritus of accounting at Baruch College in New York who has examined Google’s tax disclosures.

“Who is it that paid for the underlying concept on which they built these billions of dollars of revenues?” Briloff said. “It was paid for by the United States citizenry.”

Of course, when US citizens, especially those who have never been in Congress, decide to pursue various tax shelter loophole, the result usually ends up being jail.

And here is where the tax repatriation issue comes in:

Technically, multinationals that shift profits overseas are deferring U.S. income taxes, not avoiding them permanently. The deferral lasts until companies decide to bring the earnings back to the U.S. In practice, they rarely repatriate significant portions, thus avoiding the taxes indefinitely, said Michelle Hanlon, an accounting professor at the Massachusetts Institute of Technology.

Which explains why as we noted a few days ago, the vast corporate lobby is already begging for a huge tax amnesty so it can repatriate its massive cash hoard from abroad on promises it will be used for what it should have been used in the first place. Surely, we can believe these honest tax evaders... But at least we can finally put the topic of the "vast cash on the sidelines" lie to rest. 

Mure more here.

And here is a interactive graphic representation of Google's tax evasion (after the jump):




World’s Most Powerful Magnet Under Construction in Florida [Magnets]

02 Sep

You have probably heard stories about patient injuries or deaths occurring when someone introduces a heavy metal object into the same room as an MRI machine. Obviously, we are talking about some seriously powerful magnets here. However, the $10 million magnet currently under construction at the National High Magnetic Field Laboratory in Florida is expected to reach 100 tesla when finished—about 67 times more powerful than a typical MRI machine.

That is just the kind of power needed to test the properties of high-temperature superconductors like iron oxyarsenide, which may result in better, cheaper MRI machines and high-voltage power lines. It could also be used for certain zero-gravity experiments and magnetic propulsion systems that could eliminate the need for traditional rockets down the line. Researchers have been able to create magnetic fields over 100 T for years, but if successful, this would be the first magnet that could repeatedly hold up to the strain. According to Greg Boebinger, director of the Magnet Lab, the magnet will have to resist Lorentz forces “equivalent to the explosive force of 200 sticks of dynamite packed into a volume of space the size of a marble.” [IEEE Spectrum Online via New Launches via Dvice]

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