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Is Google’s tax policy evil?

By Sheyna Steiner · Bankrate.com
Tuesday, May 13, 2014
Posted: 5 pm ET

Up for discussion at the Google annual meeting on May 14 is a shareholder resolution asking the company to adopt a set of principles to address the impact of Google's tax strategies on society, according to the resolution filed with the Securities and Exchange Commission.

Domini Social Equity Fund was the lead filer of the resolution on corporate tax avoidance. This is what it says:© weerapat kiatdumrong/Shutterstock.com

  • The proposal asks Google to establish principles guiding its approach to tax -- this is not a vote on tax reform, or on how much tax Google should pay.
  • Corporate tax avoidance threatens economic growth and innovation.
  • Even if they are within the law, aggressive tax minimization approaches pose regulatory, reputational and financial risks.
  • Adoption of tax policy principles is a recommended responsible tax action.
  • Other companies have adopted tax policy principles.
  • Google's tax strategy should be consistent with its stated objective and policies on social and environmental sustainability.

Last year a story on the Bloomberg website quoted a professor who was able to quantify the cost of multinational corporations who somehow manage to legally get away with paying little to no tax.

The headline declared, "Google joins Apple avoiding taxes with stateless income."

The shifting of profits by multinational companies is costing the U.S. and Europe at least $100 billion per year in lost tax revenue, according to Kimberly Clausing, an economics professor at Reed University in Portland, Oregon.

A petition started by the consumer and shareholder activism group, SumofUs.org, asked Google to pay its taxes around the world.

"Corporate tax avoidance threatens economic growth," says Lisa Lindsley, senior shareholder advocacy manager with SumOfUs.

It should be of concern to shareholders in general because "countries are going to have better tax enforcement and more coordinated tax enforcement. Companies won't be able to continue shifting their revenue around the way Google has been doing," she says.

The question is, how deeply do Google shareholders value transparency, tax justice and corporate responsibility in their investments?

It's one thing to make noise about not being evil, but when it comes down to it, avoiding taxes because you can is objectively less than honorable.

Do you care if your investments are socially responsible?

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Follow me on Twitter: @SheynaSteiner.
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Senior investing reporter Sheyna Steiner is a co-author of "Future Millionaires' Guidebook," an e-book written by Bankrate editors and reporters. It's available at all the major e-book retailers.

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