Shareholders Urge Google "Don't Be Evil"


| | Bookmark and Share

Many companies claim they are forced by shareholders to dodge taxes in order to maximize profits, but what would a company do if its shareholders insist that it actually pay its fair share in taxes?

A group of Google shareholders, headed up by Domini Social Investments, may soon find out. The group has filed a proposal for consideration at the shareholder annual meeting asking the company to adopt a set of principles regarding taxes. The shareholders are recommending that the principles include consideration of any “misalignment between tax strategies and Google’s stated objectives and policies regarding social and environmental sustainability.”

The proposal comes after several widely publicized stories about Google’s aggressive tax planning which moves billions of dollars annually to offshore tax havens. In 2012 alone, Google dodged an estimated $2 billion in income taxes by shifting an estimated $9.5 billion to offshore tax havens.

Last year Google was called before the UK House of Commons Public Accounts Committee to explain its cross-border tax avoidance. The committee chair called the company’s behavior “devious, calculated, and … unethical.” French tax authorities, having raided Google’s offices in Paris in 2012, just delivered the company a $1.4 billion tax bill.

The shareholder group points out that Google’s tax dodging not only gets it in trouble with tax authorities, but damages the company’s brand and reputation that has long been associated with its motto "Don't Be Evil." Its tax avoidance has other social and human rights consequences that the shareholders urge the company to consider.

Over the long term, the best way to ensure that all American corporations like Google pay their fair share would be to end offshore tax loopholes like the active financing exception and the CFC look-thru rules or to simply end deferral of U.S. taxes on foreign profits. Unfortunately, Congress seems to be moving in the opposite direction, with the House Ways and Means Committee voting last week to make the active financing exception and the CFC look-thru rules permanent.

If this new shareholder initiative is any indication, many tax dodging multinational corporations may soon find that the pressure to pay their fair share is not only coming from the public, but increasingly from stakeholders within the company as well.

Sign Up for Email Digest

CTJ Social Media


ITEP Social Media


Categories