Spanish authorities raid Google offices over tax
reuters.com
reuters.com
These companies play in an absolutely different league than employees, self employed and small companies in Europe where they make you pay strictly all the taxes to mantain our social structure. They have big teams of lawyers, financial experts and advisors specialized in tax havens just to make grow their revenues in billions avoiding to pay taxes in the countries they have presence.
Totally unfair for regular people like me.
http://www.uspirgedfund.org/reports/usp/offshore-shell-games...
1. Fiduciary responsibility - Corporations have a financial objective to minimize their tax burden, in order to maximize shareholder value. Sure.
2. Legality. There are numerous loopholes that are technically legal. And it's remarkable how much gray area there is when it comes to tax law. This is why you have the big teams of lawyers to figure out how to best game the system and avoid taxation, while just barely staying on the legal side of the line.
3. Legal Consequences. And if they go to far and get caught breaking the law? No big deal. They can go to court and then settle. Sure, there will be a fine, but they knew that was a risk.
4. Jurisdictions and Multinationals. Countries can only make laws that take effect within their borders. But MNCs operate across multiple countries, and can effectively play jurisdictions off against one another.
5. Spirit of the Law. While lawyers may argue what they're doing is technically legal, it is certainly against the spirit of the law. The law did not intend for corporations to shift all the profits from where they are made to low tax haven jurisdictions.
Governments are trying to address these issues, as corporations will be doing their best to stay one step ahead of the law. This is why the OECD has started the BEPS movement to come up with a coordinated response. One of their initial goals is to create some transparency, so they can at least get some visibility into what's going on. That seems like a good first step.
2. The fact that you can "game the system" and remain squarely in the "legal" column makes the system broken.
3. Considering that fines are typically a fraction of what they should be, again the system is broken. Consequences should threaten the ability of a company to remain afloat, not be a slap on the wrist that doesn't even dent the bottom line.
4. You perform business in a country? Pay the taxes for all revenue factually originating in that country, not technically based on loopholes. If revenue originates from a customer/client/subsidiary in country X, you pay taxes in country X; you don't get to have customers in country X, but pretend like your business in country Y really took their money. Simple as that.
5. Exactly this. The fact that it is not intended, but is possible, makes the system broken.
Governments need to crack down on this sort of thing - HARD. The laws need to be rewritten from the ground up, but this will never happen because of another ugly facet of capitalism - at least in the US - lobbying. Also, self-interested politicians - how many of the politicians who could rewrite the laws have their own businesses that are avoiding taxes which implies a conflict of interest? Large companies that threaten to abandon doing business because state X or country X makes them pay tax? Farewell, we don't need you. This also applies to incentives, which some states are famous for. Individual states should not be competing for companies' business by reducing taxes or offering reimbursement programs.
Ignoring that who will enforce it? If say a Russian owes taxes to the US how will they get the payment if the person doesn't want to pay?
But even then why should the taxes go to that country? All the infrastructure to allow your business to operate in the first place is in your country. The roads to get your employees to work etc.
That being said if your going to open factories or offices in another country than I believe you should be required to have a corporation in that country and pay taxes in that country for the revenues those entities make. But even that is challenging. It's honestly a very hard issue to resolve...
Basically all I'm saying is that it's not an easy problem and there are no easy and obvious answers :(
Clearly the tax has to be paid somewhere, and I'll bet every jurisdiction has an argument why theirs is the right place to collect it. No wonder tax or trade treaties take so long to negotiate.
The same justification could be made for accepting international credit card payments online, but companies like Stripe are happy to provide you with a service that takes away the hassle. If they can do that, then I'd say they would be perfectly willing to solve the local tax problem for you.
You seem to be wanting a consumption tax rather than an income tax. This is known by economists to be the least distortionary tax, for the exact reason you argue.
It's also highly criticized by left wing types since it taxes people in proportion to the benefit they receive from society rather than what they produce for society. Typically poor people consume more than they produce, while rich people produce more than they consume.
Large companies that threaten to abandon doing business because state X or country X makes them pay tax? Farewell, we don't need you.
Except that very often, we do. Just look at Austin - as a result of their little feud with Uber/Lyft, they are now providing below sub-developing world level services.
But the rest of the points are accurate. They are doing nothing illegal and it's stupid to expect people to pay more tax than they owe. If countries want them to pay more tax, then change the law. It's silly this is even a discussion.
It's very clear who lawmakers are looking out for.
Just to clarify, did you mean TPP, TTIP, both, or something else?
https://en.wikipedia.org/wiki/Trans-Pacific_Partnership
https://en.wikipedia.org/wiki/Transatlantic_Trade_and_Invest...
I have never heard of a successful shareholder lawsuit over corporate leadership failing their fiduciary responsibility because they didn't find all the loopholes for limiting their tax liability.
26 U.S. Code § 7201 - Attempt to evade or defeat tax:
"Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law"
I have worked at companies performing the "double-irish". True, they aren't prosecuted. But legal? Because a british lawyer says it is? 26 U.S. Code § 7201 is extremely easy to read and meant to be very vague. It isn't complicated. They "could be viewed as" breaking the US law and that is enough for some IRS investigators. Why they don't? <- I feel, it is more profitable to tear apart thousands of small local businesses using algorithms and automated mailing. If there was any kind of left leaning shift in US politics I would assume a few congressional hearings. Sure Google,Facebook,etc got away with many years of tax evasion, but that doesn't mean the governments find it in anyway legal.
Further: https://upload.wikimedia.org/wikipedia/commons/c/c3/Double_I...
The above info graphic clearly shows an attempt to defeat the US the 26 U.S. Code § 7201. This is not only illegal but morally reprehensible.
Intuitively, it feels bad. But until the profits actually come back to the U.S., the USG doesn't have much of a case.
I do think that EU countries, the EU parliament, and the European Council have a responsibility to their citizens to close these loopholes. It is not fair for Ireland to have a minor advantage (a few thousand jobs) at the cost of depriving other EU countries of billions of Euros of tax receipts.
Why should that tax revenue instead go to a different country that didn't contribute to it?
Whether that's true or not is a task for the courts to decide, but considering that there is a long history of the US government not taxing overseas profit until it comes to the USA, I'd say that this is an indicator that the government has, to date, agreed with the corporations on this.
Since these are felony allegations (criminal not civil) IRS investigators should sit a few of these CFOs down in a cement room and ask: "Does any of this money come back to the US?"
Then the CFO has a few options: 1) lie to a federal agent (not a good plan) 2) plead the 5th (not a good plan) 3) state to a federal officer that none of the money is used, transferred, or used to pay employees of said corporation by proxy.
I would assume these wouldn't go well at all.
I agree it's unfair, but I can't fault anyone for trying to legally minimize their tax burden. Tax law should just be simple enough that anyone can do it themselves.
However, the direct and indirect pressure large companies exert on governments to promote/create these loopholes is absurd. I recently went to a latin american country which is promoting foreign investment. Guess what tools they are using to promote such FDI? Correct, tax credits, tax agreements with tax heavens, zero withholding taxes on dividends, etc. I won't go into more detail, but I've seen obscene (but legal) tax structures were little-to-no corporate taxes nor capital gains taxes have been paid in +billion euro transactions.
IMHO, this is unfair to everyday citizens. Citizens end up taking the burden of supporting the govt budget, at the expense of higher tax rates.
Unfortunately in the EU, there is very little interest from countries like The Netherlands, Ireland, and Luxembourg in implementing a common fiscal policy, with no loopholes, as this would considerably damage their "competitive" economies.
This is not the end all solution but it at least makes everything far, far simpler.
Most corporate tax avoidance strategies take advantage of laws intended to prevent different countries from taxing the same dollar of profit, and those rules will still exist in any reasonable tax structure.
The real problem comes when these deals disadvantage local businesses competing with the big foreign conglomerates. But often these deals are really only necessary because the government has set up ridiculously high trade barriers, so the only way to get investment is with ludicrously generous deals. Brazil seems to be a classic example of this. The entire economic system is tangled mess of massive market distortions.
You're mixing up terms here. Tax avoidance is minimizing your tax bill within the law. Tax evasion is what you do when you pay less tax than your legal obligation.
It might be rational to hire a big team of tax lawyers to find loopholes. It might be rational to launch PR campaigns to misinform the public about your tax affairs. It might also be rational to hire private investigators to dig up dirt on politicians and blackmail them. Or bribe them, or otherwise corrupt them.
UK tax law is complicated partly because the large accountancy firms have become deeply entwined with the policy making process [1]. This is used as a way to introduce and then milk advantage from the complexity. This goes way beyond just playing the tax game by the rules.
I do think the government has a responsibility for allowing these abuses to occur. That doesn't make the abuses OK though.
[1] https://www.theguardian.com/business/2013/apr/26/accountancy...
Maybe we can blame people for behaving unethically instead of believing this shlock?
You would quite literally see revolt / insurrection in the western world, especially America and other former anglo colonies, at the idea of a One World Tax Authority, which would rightfully be seen as a part of one world government, the so-called New World Order that conservatives have maintain DEFCON1 fear of for decades.
Even if it did exist, if if you had a global tax authority with the weight of a global government to enforce it... that doesn't necessarily solve the problem.
There are plenty of tax havens in American states despite a national legislature that could squash them.
On big reason Americans were unrepresented in the Panama Papers leak is that Americans used on-shored havens. They had far less need of an offshore haven when current corporate tax rules allow you to incorporate and tax dodge in Delaware or another friendly state without leaving the country.
If the US can't or won't control domestic tax havens, I'm not so sure a global government would have better luck.
Plus, one world tax authority means one single target for corruption. The Googles of the world, with literal billions to spend, they'd hyper-focus on corrupting that authority to their desires.
Saying we can tax them globally is like saying we can tax them domestically. We fail on the latter, so i can't imagine we'd succeed on the former.
And while i do agree that blame alone is of little use, blame is often the precursor to action. You have to decide who is at fault and or what to focus fixes on, via blame, before you can actually fix them imo. When i see blame discussions like the above, i just assume (perhaps foolishly) that it's the discussion prior to the fixing stage.
Not that the above discussion will fix anything, of course.. but if we can't decide on what is to blame, how can we decide what is to be fixed?
spot on. this.
But that is the political class, and they are the ones driving the train for companies to pay more tax. Which doesn't make any sense if all that is truly required is for them to fix their own laws and unethical behaviours. Right?
I think what you're missing is the fact that the Tax Office is pursuing Google for an apparently grounded belief that they were, in fact, acting illegally. (That is, making false representations as to the true functional roles of its local subsidiaries, so as to make its locally-generated revenue appear much smaller than it actually is, per a recent El País article).
Not simply for being "clever" and minimizing their tax burden within established guidelines.
Google and Facebook grew their profits by advertisements, traditional media (that did not innovate anything) lost all this revenue.
So they(traditional media) are terribly biassed against Google and make everything they can to harm the company. They destroyed Google News for example.
Rational != Ethical
First, the legislature often decides that raising or lowering specific taxes is a good way to encourage some behavior or other (i.e. mortgage tax deductions or extra taxes on cigarettes). Most of these are actually pretty justifiable individually, but eventually you end up with too many exceptions and special cases for any nonspecialist to keep them all in their head.
Second, there's a huge body of caselaw and regulatory rulings that crop up around the actual tax code. Dozens of courts somewhat haphazardly decide that this weird edge case counts as income, but that weird case doesn't. Again, almost all of these are pretty reasonable taken in isolation, but you end up with a swiss cheese of arbitrary and contradictory rules.
Finally, wealthy entities will inevitably try to game the system. They will try to find a few well-intentioned but poorly thought out edge cases and alter their finances to try and intentionally fit a huge percentage of their income into them. By the time this happens, it's often very difficult to fix without hurting the innocent bystanders that the edge cases were put in place for in the first place.
Wealthy individuals and companies do lobby for favorable tax provisions, and politicians do sometimes pass laws specifically to benefit those entities. But the reality isn't that simple. International tax law is an emergent phenomenon, and it's really only going to bend to systemic incentive changes.
The reason politics is full of vapid stupidity is that powerful entities want it that way. If the population wasn't distracted by guns, abortion, and gay sex they might actually be paying attention to issues that matter.
A business can't tell their landlord that they owe no rent because they are "unprofitable" ? Why then do we accept this excuse from the businesses who benefit the most from our public systems.
We do? Why? Because, by one interpretation, they pay lip service to it by saying "Don't be evil"/"Do the right thing"? I take those as marketing (both to the public and to their employees).
Even if we take their mottos as honest statements of intent, how do you know that their definitions of "evil" and "right" match yours? Or that their definitions won't shift to fit the situation?
I can definitely fault them for trying to minimize their tax burden. Taxes shouldn't be seen as a burden, they should be seen as an opportunity. A way to contribute to the society that created that opportunity to pay taxes in the first place, since every dollar paid in taxes represents several earned on top of society's foundation.
Justice like secret FISA courts and no-due-process restrictions on travel?
Human rights like free speech? Good job Merkle, Ergodan is proud. Due process? Haha. Protection from unreasonable searches and seizures? "Civil asset forfeiture" would like a word.
Quality of life? You mean the thing I get from novel technology, but that is constantly hindered by IP law and overregulation?
> as a society we have chosen to collect through taxes
Huh, I don't remember being privy to that decision... In fact, as best I can tell, most people are compelled to pay taxes by the threat of violence!
>A way to contribute to the society
And a way to contribute to droning of US citizens, and the funding of Israeli weapons programs, and corporate subsidies, and a way to pay for massive surveillance apparatus... Great!
You're right; society created many of the opportunities we have today. The government isn't society.
What a load of garbage. Taxes are theft at the end of a gun and we have little choice in how they are used. It's downright ignorant to believe that most taxes are used for the betterment of society rather than to line the pockets of select constituencies. Your conflation of "society" with "government" is fictitious.
That's a big reason why democracies became popular (see for example the french revolution, or the boston tea party). A democracy is a system in which the residents of a country (directly or indirectly) decide on matters of government, like which taxes should be collected and how they should be spent.
And really, it's human's that guarantee the state's rights, not the other way around. The state is an abstract concept that exists only because humans gave it that right at some point.
I lived for 6 months in Damascus. It was an incredible city with lots of History. It breaks your heart to remember people younger than you that you know are dead now. The country is devastated and everything stops working.
You go to Servia, normal people could barely survive, long after the war. A few guys made themselves rich at the expense of normal people.
You go to Congo(old Zaire) and experience so much pain over the war there.
In Congo it is about Cobalt and coltan, diamonds, gold. In Syria it is about strategic position, natural gas. In Libia it is about energy resources.
A couple of powerful countries decide to plunder weak countries and war is the way they do it. If their leaders are not ok about plundering their own country you just give millions(or billions) of dollars in weapons to the opposition.
Once a war is started, it is like a drug, both sides needs weapons just for survival and they will do anything for getting them, basically selling their country for almost nothing.
A huge business at the expense of entire families dying and loosing everything they have, women being raped and the state collapsing, infrastructures destroyed.
If legal, corporations are just doing what is allowed. I hate them for it, but ultimately, i hate that it is allowed. If the law was put into place via illegal bribing/etc, then yes, both parties are to blame. But if it's all above board, then it's entirely on the Government imo.
Take America for example. Lobbying is an utterly disgusting practice in my eyes, yet i can't blame the groups doing the lobbying. I would too if i had the resources. I blame the government for enabling lobbying, and not shutting it down as it stands now.
Corporations have invaded Government, but ultimately the Government is what needs to be fixed to not allow corporations to get away with this.
edit: And of course, you could just continue with the blame train, saying people are to blame, etcetc. I'd agree with you there too. We all need to do something, to fix this damn Government(s).
Again, the key focus of the Spanish investigation is not into whether Google rationally took advantage of "loopholes" -- but whether they made false representations as to their business structure and the activities of their local subsidiaries.
See today's El País article for an explanation of the authorities' reasons behind the raid.
Your business does not deserve my money, my support, or my respect if you are not proud to pay your fair share for the common resources that are the foundations of its success.
So if a company, instead of staying well within the boundary decides to skirt it (and I'm sure that they take into account the probability of being caught on the wrong side in their minimization process), it is only fair that they get a visit from the tax man.
I think the current chase after big companies is mostly a change in the interpretation of the spirit of the law. One could argue it creates a dangerous climate for business and it's probably right, but at the same time no one ever argued that what those companies did was moral in regard of the law, only that it followed it's wording.
(I personally think our laws should change, but at the same time it's obvious that countries like Ireland, Latvia, Netherlands... Would veto it at the EU level)
However, I don't think a legitimate argument can be made that companies should pay what amount to optional taxes (taxes they could avoid but don't). Lawmakers are free to change the laws, but large corporations will always pay the minimum allowed by those laws.
Governments have the ability to levy taxes. If they need money they should levy a tax. It's that simple. There is no 'right amount' that a company should be paying that is more than the law requires them to pay.
No it doesn't. It implies that the correct fix is to eliminate tax loopholes, not attempting to guilt a corporation into paying more, which is about as effective as guilting the sun into cooling down.
Are you arguing that companies have a responsibility to change laws to maximize their profits? If a company could get a law passed that let them, say, remove all environmental restrictions, are you arguing that they should do that?
Do their fiduciary responsibilities trump their social ones?
If a company attempts to abolish environmental restrictions, in order to, say, get to sell food with carcinogenic substances, and in that way make more money — then one viewpoint can be, that the company attempts to make money by killing people. I.e. attempted murder.
Therefore the executives and people at the company, responsible for lobbying / bribing politicians, in order to remove all environmental restrictions so that the company can sell poisonous food — they should go to prison.
Right now I think that's what I wish would happen.
Tax evasion (= money "only"), though, is very different from removing environmental restrictions (= killing people).
Frankly, in this picture you've painted, I'm not sure what the point of this bribe accepting party is. This is like having a body guard that might shoot you if there's a higher bidder. The whole point of the body guard is to protect you from killers, but now he's shopping around for contracts on your head. It's almost like the State having a monopoly on violence is paradoxical to it's alleged end goal.
Imagine a company and a few lawmakers that via bribes/lobbying remove regulations around asbestos (which is very carcinogenic) and start building houses with asbestos (because asbestos is inexpensive). Now people are going to die in cancer, almost for sure. The company and lawmakers are, in my opinion, killing people to make money. So, they should go to prison.
So I think I want laws that prevent companies _and_ politicians/lawmakers from suggesting-to-remove and removing important environmental restrictions meant to save people's lives.
Perhaps it sounds weird with laws about what regulations/laws might be canceled. Some kind of "meta laws". One way to think about it, could be a defense-in-depth. Now it gets even harder for some evil company, to make money by destroying the environment & hurting people.
I'm not sure all this would work out well in practice though.
Lawmakers exist specifically to serve the public good. If they are allowing lobbyists to affect this responsibility, then they should be voted out of office.
So yes, corporations that can afford to do so have a responsibility to try to get laws passed that favor them, and elected lawmakers have a responsibility to the public to ensure the laws that they pass are in the public interest.
Doesn't matter -- when the principals signed documents agreeing to incorporate, they simultaneously agreed to abide by the what the law says in regard to paying taxes due as the law requires. If they thought these laws were "unethical"... well, that was their chance to make a principled stand against them.
0: http://michael-hudson.com/2016/04/laundering-havens-for-war-...
Another example of this stupidity by governments is making gambling illegal due to "morals", and then hosting a government-run lottery. Clearly their motives are not morals, but money.
Get involved with politics and get the laws changed. In so many of these cases, the laws are so poorly written that you could drive a truck through them.
I'll bet the anything Google did wrong here (legally) is minor at the most. Check back in a year and down-vote me if I'm wrong.
If the gov't wants to put an end to this behavior, they can. They just need to change the laws.
When a bunch of companies start misusing tax laws the tax authorities will tell them that it's wrong, announce how they'll regulate that bit of tax law in future, and reclaim a bit of unpaid tax. The companies can challenge it in court if they wish.
Non-payment of tax exists on a scale, with normal and expected tax planning at one end, probably legal (the accountants and lawyers claim it is) tax avoidance through to outright tax evasion.
“Google has paid €8.8 billion in fees to Bermuda,” S&D group MEP Peter Simon complained. [1]
The irony being that the current president of the European Commission, Jean-Claude Juncker, was Prime Minister of Luxembourg when his administration was organising the low tax environment. [2] [3]
And now the EU claims that "the Anti Tax Avoidance Package is part of the Commission's ambitious agenda for fairer, simpler and more effective corporate taxation in the EU." [4]
[1] http://www.euractiv.com/section/public-affairs/news/google-f...
[2] https://en.wikipedia.org/wiki/Jean-Claude_Juncker
[3] https://en.wikipedia.org/wiki/Luxembourg_Leaks
[4] http://ec.europa.eu/taxation_customs/taxation/company_tax/an...
The current state of tax law is that a billion dollar company pays almost no taxes but a million dollar company pays a lot. That can't be good for anyone (apart from the $1B company).
Are countries, simply put, afraid to put an end to tax schemes like this, because it would just mean that Ikea or Google would pack up and leave?
In an "odd" application of market-competition, that is precisely what happened. Countries where Google generally did business wanted to tax Google at some X. Then along came Ireland, or Google found Ireland, and saw that they could do some legal paperwork and pay Ireland's tax rate of X-Y instead of X in the "source" countries.
The point I'm making is that Google did pack up and leave, and it will happen again unless really drastic actions are taken against them. I don't think anyone wants to do that, at this point.
You either bully all countries from allowing loop holes such as this, even though they don't want to. Or you disallow Google from operating in your country if they don't pay taxes on the profit from "sales" you deem occurred in your country. Small countries that want/need that tax revenue from Google, even if it is X-Y, won't like it if you compel them into complying and causing Google to "pack up and leave". It also puts the "bullying" nature of whatever international body is tasked with enforcing this into light.
No they did not. There is a Google Spain and a Google France. They can't escape the Spanish law or the french law if they have an office in these countries, no matter where Google trully is incorporated, and there is an obvious reason why they have officies in these countries.
So what Google Spain and Google France do is that they pay huge fees to Google Ireland for the use of Google brand, so they never make a profit officially, then the money is ex filtrated from Google Ireland to tax havens.
But they did not leave Spain nor France.
If Apple sells an iPhone (developed in the US and built in China) to retailers in Paris, should they have to pay French income tax on the entire profit of the phone? Of course not, that's ridiculous, even if the retailer is an Apple subsidiary.
Neither they are developed in Ireland, but they chose to pay their tax there. Perhaps that's significant.
This is utter nonsense. The problem is US tax repatriation laws introduced during the Clinton administration that allow US companies to leave their profits offshore in countries such as Bermuda or the Cayman Islands. Since they are only taxable on repatriation to the US, they pay no tax on them. Instead, they pressure Congress to introduce 'one-off' tax amnesties that allow them to repatriate at a much lower rate. This problem could be solved tomorrow if US politicians rescinded those tax laws. Ireland has no legal right to tax those profits, since they are earned by parent US company e.g. Google US. Which is perfectly correct, since the foundation of most of those profits are the intellectual property created primarily by the parent company. Don't let US politicians pull the wool over your eyes that this is a problem over which they have no control. In case you're interested, here's a good article that gives more background: http://www.rollingstone.com/politics/news/the-biggest-tax-sc...
While I'm sure it can be minimized, the US doesn't have a particularly low corporate income tax rate.
> And if they paid that tax in the US [...] how would that help Spain and France?
Companies like Google not having to pay tax on revenues outside the US is essentially a government subsidy. One that creates a "slush fund" for US companies to acquire their European competition. We're essentially in a trade war, just that Europe hasn't realized it.
Getting some stronger wording in the tax legislation on EU level should be doable, but of course the Netherlands would squirm a bit.
Maybe in order to do business in jurisdiction X, where "doing business" == "selling ads" in Google's case, you have to pay taxes to X.
How would that even work? The costs are actually costs.
Imagine it was actually a dozen different companies. One of them is in California and it develops software on contract, one is in Germany and it develops hardware on contract, one is in China and it manufactures hardware on contract, one is in Ireland and it has the original capital which it pays to the first three in exchange for copyrights, hardware designs and hardware, one is in Spain and it buys product/services from the Irish company and sells local advertising, etc.
It turns out the company with that owns the copyrights makes the most money. That's how it honestly works whether the companies are separate or not. If you made the Spanish company liable for taxes on the profits of the whole supply chain, every company in Spain that uses Google ads would owe taxes on the money paid to Google (and the same for anything they buy from anyone). In other words you would have enacted a sales tax. Which is fine, but isn't an income tax and isn't a tax on Google.
What you seem to want to do is to identify that the companies are actually owned by the same party and do something different in that case. But five seconds after you require that, they would separate. Specifically the company that exists in a jurisdiction that cares about that would become independent. You don't need to own the stock of a company to capture all of its profits when you're its only viable supplier. So now there is an independent contractor in Spain that pays Google Ireland for ad space and resells it for just enough money to pay its own bills and makes no profits.
The problem is fundamentally that income tax makes no sense across borders. People will move whatever it is you're taxing into the country with the lowest taxes if the cost of moving that thing is less than the cost of the taxes. The cost of moving profits is very small. You have to tax something which is harder to move, which is then no longer an income tax.
It kind of is, though, isn't it? The online ad market is theoretically super efficient - if the market clearing price for an ad is $1, and then you add a 10% sales tax, it no longer makes sense to bid / pay $1 for that ad, knowing that you will be out of pocket $1.10. Instead you would bid about 90-91 cents, knowing that it would get marked up to $1 with tax. Net effect is that Google only makes 90 cents on that ad instead of a dollar, even though they aren't directly paying the tax.
Not if you have to bid against people in other jurisdictions for the same ad spaces. Then the people in the taxing jurisdiction have to bid the market price or lose the auction to someone in another place that doesn't impose the tax. In theory this could have a negative impact on ad prices, but it isn't going to be anything like the entire amount of the tax.
The actual value of Google is in its business concept, IPR and brand name, none of which are substantially developed in Europe.
I'm not sure how it would work. Corporate income taxes don't make much sense in itself of course. The profits could be taxed as cap gains and everyone would be happy - so long as companies weren't multinational.
The problem here is that a company may be making a huge profit in some country by using resources paid for by tax money in that country (such as roads, in the case of Uber) but due to licensing and the ownership structure, the company does little income in the country and no cap gains either because the owners are elsewhere.
The only solution to this problem if you do have corporate income tax is to establish how much profits Uber actually made in each country, and have the profits taxed correspondingly.
The problem is that's not how profit works. There is no "in each country" to calculate. They paid $15B to employees in 20 countries and then made $20B in revenue from 20 countries. There is then $5B of international profit, but how much of the profit belongs in each country is completely arbitrary. There is no objective reason that it should be where the software was developed vs. where the software is used vs. where the owner of the company lives etc.
The standard they try to use for these things is what would be negotiated in arms length transactions, i.e. as if each of the subsidiaries had separate ownership. So one entity pays $1000 to develop software, another can make $1200 in revenue if they buy the software, what price do they negotiate? It's ostensibly going to be something between $1000 and $1200, but whether it's $1020 or $1180 is down to the negotiating skill of the parties. Both numbers are completely reasonable and might be seen in actual transactions. But the difference determines where 90% of the total profits go! It's clearly then going to be quite plausible to arrange for the profits to end up where you want them, which is what happens.
Maybe what it all comes down to is that it makes more sense to tax transactions and charge corporations for services (e.g use of roads) that are tax funded.
To avoid doubly charging companies that do pay taxes for profits one could charge fees for use of infrastructure and count taxes collected against those fees.
Companies like Google and Uber that use public infrastructure could be charged for it, and unless they paid enough taxes they'd owe the difference.
How much of the internet infrastructure Google should finance, or how much the cost of Ubers road use is will be somewhat arbitrary of course, just like the current situation - which is the lesser evil comes down to whether one is more comfortable leaving arbitrary decisions for tax authority bureaucrats or enterprises.
Tax ownership of assets.
It's rather difficult to hide that /someone/ owns a phone, a car, a house, some land. Tax the ownership of value, not it's transfer.
Globally you would see the impact of sales increase taxes most where the profit actually accumulates; assuming that those types of values are taxed properly. In practice I would imagine that this would be increasing taxes on ownership of 'financial instruments'.
I'm making this example up but it's the general process of Transfer Pricing. Tax authorities now make you justify the prices which is why Google negotiated a settlement with UK Chancellor George Osborne, his superbowl seats and job for his son were just coincidences.
The then prime minister and ex-finance minister of Luxembourg Jean-Claude Juncker is now EU Commision president. So either he is incompetent and did not know about this, or he was involved. He claims he is only incompetent.
With the EU leadership being corrupt or incometent, it is no wonder the big companies are dancing circles around the national tax authorities.
Well, it’s more like the EU can not do anything while the national authorities can veto them, and the national authorities still have the competence for that, and the right-populists in the EU are proposing even less power for the EU authorities.
There was this moment during the crisis where I think we could have moved forward with EU bonds, a proper banking union, increased EU budged and debt relief for Greece. But now we are stuck with a deteriorating status quo.
I blame Merkel for lack of leadership but maybe she just knows the limits of what she can push through.
In the United States, one of the biggest powers of the Federal government is its power to regulate interstate commerce. No one in the EU is willing to give it so much authority.
To be fair, if the US is the model, you can imagine why they wouldn't want that. I don't think the people who wrote the commerce clause were imagining federal micromanagement of local schools or the War on Drugs.
So even Germany is less integrated than the US on that. Even after 200 years of every closer integrations.
Other career politicians you should know: David Cameron, Boris Johnson, Hillary Clinton, Barack Obama, Angela Merkel, etc.
They do not have much of an own opinion they want to push – often they couldn’t care much, as both solutions would be okay for them.
So they vote for whatever polls or lobbies say is popular or profitable.
This isn’t necessarily bad – Merkel has been called at times the "walking infratest-dimap poll", specifically because she always pushed through whatever the people considered important according to polls. Kinda democracy, I guess.
But, in general, it’s nothing awkward, or special – in fact, it’s the way most of politics has been in the past decades.
And considering the alternatives of politicians that are still idealistic, which at the moment are only right-populists like Trump, Farage, Petry, Le Pen, I’m wondering if, for now, career politicians might not be the better solution.
Also seconding vmateixeira: Thanks for your research!
Then Google US and Apple US just have to wait for a tax amnesty in the US in order to bring back oversea un-taxed profits.
I've seen you post this several times. Do you have a source that I could read up on this?
The subsidiaries in the high tax jurisdictions then license the IP from the Bermuda entity which siphons off profits.
Without the IP cross licensing deals the French subsidiary would have access to Google's IP at no cost which would inflate their profits enormously. To offset this Google would need to build R&D centers in each market.
While either scenario would likely benefit France it wouldn't likely be beneficial to Google.
Likewise, it makes sense to loan money to your subsidiaries so they can grow. But making large, unnecessary loans of money from tax havens to sink your subsidiary's profitability doesn't sound honest.
Companies will end up in court when their definition of an arms-length price/interest rate is significantly higher than what the national tax authority considers to be reasonable. However, having worked in the offshore tax-haven unit in the Australia Taxation Office (I even went on a tax raid once), and then subsequently worked in tax policy for a few years, I don't think things clear cut with google (and others). I'm not even sure that transfer pricing and thin cap are particularly relevant issues.
In general, I think this issue is much bigger than a simple case of companies crossing the line on transfer pricing and thin cap rules. 'Tech capital' is extremely mobile; it can literally be moved from one country to another in a matter of hours. This creates strong incentives for countries to undercut each others' corporate tax rates to attract that capital. Tax havens (and Ireland) are extreme examples of this. The only way to extract any meaningful amount of tax from tech multinationals is through some kind of international agreement on minimum corporate tax rates (one that is ratified by countries representing a large enough proportion of the world economy). You'd also have to apply trade sanctions to any country, signatory or not, that goes below this minimum threshold.
In short, it's unlikely google and others will have to pay their 'fair share' of tax any time soon. This might sound defeatist, but I think countries will need to shift their tax burden on to less mobile (and therefore, more economically efficient) bases, such as domestic consumption and land.
> Companies will end up in court when their definition of an arms-length price/interest rate is significantly higher than what the national tax authority considers to be reasonable.
A second issue I see is that smaller countries will often see certain transactions as "at arms length", whereas larger ones (with higher corporate tax rates) will not. But if a multinational can produce valid evidence from, let's say, 3 different jurisdictions that a transaction is at arms length, this will often be accepted by the court as being at arms length. In most countries, the burden is on the tax authority to prove something is not at arms length.
So yes, countries are often screwing each other over. Add to that that each country wants to stop avoidance (loss of tax revenue), and at the same time attract investment (by granting fiscal deduction for special interest groups) and you end up with a big mess.
This whole tax game is essentially basic arbitrage within a complex framework.
"the background of all these investigations are the lack of tax harmonization in the EU and tax strategy of the company, like others such as Apple or Twitter, for example. Sales declaring these firms in each country are unrelated to their actual billing. Subsidiaries in Spain-and other European countries act as agents of another parent company based in countries with lower tax burdens as Holland or Ireland. National subsidiaries taxed only by the minimum commissions they receive from their Dutch or Irish matrix, most of the turnover recorded paying minimum tax rates."
I think the financial crisis in some of these EU countries have reached a point where they are politically paralyzed (can't move to the right due to strong leftism in the electorate) so they'll just find a way to milk multi-nationals to keep the lights on. This isn't a long term strategy and is a sign of some bad stuff coming up. I believe in the long run the welfare state is unaffordable and without a move to the right these countries will suffer, especially as business moves to more tax friendly jurisdictions and leaves these markets over government abuse, low sales, low margins, etc.
Currently, Spain has 25% unemployment and almost 50% for those under 25. The GDP is falling at the same rate it is for France and Italy. The sudden interest in these countries to raid multi-nationals for tax reasons is no coincidence here. France just raided Google's office last month. I suspect Italy is next.
Google, like many other multinationals pay absolutely minuscule taxes. They have eradicated large parts of national advertisement companies across Europe, who all have to pay normal tax rates, while Google pays close to zero.
You are not a leftwing nutjob just because you want companies to pay taxes for the money they earn in your country. A free market relies on a level playingfield and when multinationals can exploit loopsholes in this manner it distorts the competition.
I am not sure why you single out Euro countries as not interested in modernizing. I can't speak for other European countries but I can speak for Norway where I am from and our taxation system is decades ahead of archaic mess found in the US e.g. The fact that a large part of the American population have to pay professionals to fill out their taxes says something about the complexity and backwardness of the system.
How would you decide what money they earn in your country? It's a tricky question for multinationals.
The internet is a real mess for anything that has to do with jurisdiction, which is the underpinning of taxation. Free flow of capital could be acceptable when goods were eventually involved, since their physical presence decided jurisdiction; as goods become similarly immaterial, new parameters are required. The current "equilibrium" is anything but.
Google (and other on-line operators) have taken market from national advertisement companies because they are much more efficient and offer more value, not because of taxes.
Consider that Europe has had austerity in several countries. The average person was told that they needed to suffer fiscally for a few years (in terms of social services being trimmed and taxes not going down, sometimes going up) in order to redress spending imbalances and show the bond markets that things are under control. Meanwhile, we learn that the very largest, cash-rich, profitable companies in the world are paying little tax compared to other companies and small businesses, all because of special tax treatment in some countries. Is it any surprise that politicians have to act on that? This is the connection.
And someone below said that the HN forum is far left. That's a little rich, pun intended, given that many of the people who contribute are directly related to venture capital, or own lots of stock or are self employed, or just wealthy. Sometimes the world can't as easily be broken into left and right.
[1] http://www.cnet.com/news/spain-says-it-has-arrested-anonymou...
Isn't that backwards?
They also have gear that can splice into the power cord of a live machine without interrupting the flow-- the combination of these two devices allows them to seize unlocked computers and keep them accessible while taking custody of the machine.
I'm not sure if opening a Google Doc from the local file system would work without a connection.
I mean, you could do it it software too, but it would look cool and send a signal to the officers. :-)
Or you could keep the door locked.
https://www.google.com/appsstatus#hl=en&v=issue&sid=2&iid=84...
Not if they have to keep information on paper to comply with the law.
This really means print on demand.
But obviously most ownership is a simple two node thing with a single directed edge connecting the nodes. These are simple to decide if they are legal.
Tax raids are often a symptom of such legislative tradition where laws are written so as to allow authorities to apply loopholes to get their way (as opposed to loopholes for citizens or companies). In my country (Finland) there are practically none, and the tax collection procedure is very effective. This amount of control comes at a price, of course; regulation is predictable but there's a lot of it (and recently the development has been towards more and more rapid and unpredictable changes, often somewhat to do with how to apply EU regulations).
The idea that bureaucrats can make enough laws that we know exactly what action ever taken in the future is "illegal or not" is pure Orwellian.
Most things in life are legal by default. This is no different.
https://en.wikipedia.org/wiki/Everything_which_is_not_forbid...
Every time you pass a new law you have to think about how it interacts with all other current laws, and how it affects how current laws affect each other.
Passing more laws just inhibits small businesses. As said before, big businesses are able to afford the small army of accountants and lawyers to navigate the lawyers, whereas small businesses just kind of have to take it.
Sort of how the super rich are able to pay a lower tax rate than a solidly middle class family.
[1] - https://www.theguardian.com/technology/2016/may/24/google-of...
Edit: Spaniard here.
Last year we started the cycle of these lists. Last year was... election year!
Edit: last year, not two ago.
What exactly is your point? Shaming debtors of the country is not ok?
The problem is that the names are being made public while they are "under investigation", which destroys the basic right of presumption of innocence, and (more importantly) they are being released by a Minister who belongs to an embattled and corrupt government, so it absolutely smells like the tax ministry is being used as a political weapon.
He has, several times, menaced the media (for example, "El Mundo", to "speak out about you")...
I find that dirty.
Edit: And a corruption of justice (presumption of innocence even for fiscal deeds).
(See comments above): he is required by Law (since 2003) to make that list public. However he (coincidentally) started publishing it last year (election year...). From my point of view, this is pathetic.
Edit: sorry, I misunderstood your comment...
This is why there's so much talk over international agreements.
In the case of the Spanish subsidiary, the Tax Office is analyzing why Google pays so little tax in Spain despite making multimillion-selling. With this action, the Agency's technical investigators seek to determine if the international structure of the world's leading Internet search engine is not legitimate. Toward this aim they will try to prove that functionality the group attributed to its Spanish subsidiary are less than they actually performed.
The record is linked to an investigation into possible tax evasion. The company, known for its Internet search engine, has spent years in the crosshairs of Finance for its tax system, as part of their income managed through Ireland. Thus, it could be artificially reducing its business in Spain and lowering its tax bill.
Tax Office searches Google Spain and Google Ireland for evidence of tax fraud
http://economia.elpais.com/economia/2016/06/30/actualidad/14...
Ironically the USA is a top tax haven due to anonymous shell corporations you can create in several states. Lots being stashed here due to anomymity and economic safety.
Let's say Google Spain got €100M in revenue and had €20M local expenses (mostly sales, local support and localization). Now, say they owe €30M to US HQ for the service, servers, R&D, IP, support, etc... among other expenses. (For simplicity, let's suppose everything is hosted and originates in California.)
That leaves Spain with €50M in profit, ready to be taxed by Spanish tax authorities. This sounds quite out of proportion. The great value-added is not in Spain, it's in the US.
Google HQ could easily establish Google Spain owes €80M in service costs, thus local profit is nil. To me that's fair: corporate has the right to charge whatever they see fit for their services and collect profits accordingly.
They way I see it, paying fees to the Bermudas is a US, not Spain, tax evasion problem.
Apparently this is regarding Google reporting the bulk of their sales out of Ireland and therefore not paying taxes in Europe? This is based on maybe a loophole where Google makes sure to have Ireland staff conclude all sales contracts...
The irony is that the economic incompatibility thesis claims liberalization of capital tends to undermine free trade, because capital flows make very volatile markets, ultimately making it much harder for trade to take place. So what happens is the reaction to freeing up capital is increased protectionism which is what's generally happened since the '70s.
https://en.wikipedia.org/wiki/Multilateral_Agreement_on_Inve...
Is Google going Galt? :)
Paperwork that contradicts statements the company has made, which would be shredded long before an inspector's arrival should a more formal appointment be arranged.
> Or whether it is just a display of force.
This is usually a factor in such raids too, but it only works if there is a chance something might be found so they wouldn't do it purely as a show of force.
The false statements are saying that "business as usual" is something else.
If BaU isn't something else then the statement isn't false and there is nothing to find (the paperwork will match the statements made).
This is not different from using drugs to win sports which hasn't yet been banned because it is too new. Strictly speaking it is legal, but it is both immoral and unethical.
The problem with depending on every possible behavior being described in the law and closing every loophole is that that would create a very draconian legal system nobody wants.
It is the same as with contracts between two parties. It is easy to screw each other over if one nitpicks about everything and don't follow the spirit of the contract. However the problem with such behavior is that it dramatically increases transaction costs, because one can not trust each other and have to make extremely complicated legal contracts.
I've noticed when dealing with American how the lack of any trust, makes any kind of business deal very expensive. Contracts are completely over the top.
I don't think this is how one wants society to develop. Parties in an economy have to be able to play fair with each other most of the time without resorting to ever more insane details and regulations.
Should I feel bad?
More specifically, does this violate the "spirit of the law?"
Even more specifically, every other rental owner does the same thing, so even if I change my behavior, I'm at a disadvantage with my competitors.
Again, your issues are with the government, not the companies that are following the law.
BTW why do you bother as a shareholder, do you receive any dividends?
There are probably a lot of reasons that people invest in corporations that don't pay a dividend. The "most obvious" is that you believe the company is growing. The organization will reinvest in itself -- instead of paying you a dividend -- and increase share price to a degree greater than you would have gotten with a quarterly dividend.
All of which bought and used the exact same defeat device.
So why is only VW being punished, and why almost 1.5 years after the EPA learnt about it?
And are you seriously surprised that it can take 1.5 years for a massive multi-billion dollar lawsuit to wind its way through federal courts? If you think 1.5 years is long, look at the Exxon-Valdez settlement, parts of which are still unpaid 28 years later!
Also, it was 1.5 years from discovery to investigations being started.
And regarding the claims: They’re not extraordinary. 4 companies have been in the original report that incriminated VW, others incriminated themselves [1], etc.
Germany is deciding to ban GM cars in Germany because they used the same defeat "device" VW used but refuse to fix things, etc.
http://money.cnn.com/2016/04/26/news/companies/mitsubishi-ch...
http://www.autobild.de/artikel/dieselabgas-manipulationsvorw...
It’s everywhere on the news here that all manufacturers did it. I’m surprised you haven’t heard of it yet.
As for the Germans taking on Chrysler, good. If Chrysler did it then they should pay, same as VW has and Mitsubishi is going to. http://www.autoblog.com/2016/05/23/germany-fiat-chrysler-ban... No one deserves to develop lung disease because some stupid manufacturers decided to cheat on tests rather than passing them. I still don't see how this is a trade war, when it clearly looks to me like an environmental enforcement issue.
If I told you that "I can't speak freely because agents of the shadow government are watching my every move via microchips implanted into my brain at birth", would you really take the trouble to respond with a rational rebuttal? By your own standard, would you be lazy not to do it?
I find it seriously hard to believe that you live your life by the motto that "every misguided thought deserves a rebuttal". You'd be an extremely busy person if that were the case.
(Not that I agree with the grandparent)
HN is pretty intolerant of anything that isn't the far left, which is a bit ironic for what's supposed to be an entrepreneurial forum. This change seemed to happen a year or two ago. I suspect HN has been fully "redditized" now with college identity politics being the prominent narrative. The drive-by downvotes are just a symptom of that.
I think reality is what dang touched upon yesterday: that on HN you can't avoid opinions that conflict with yours, and you assume that everyone is out to get you. But if you take a look even within this thread, you'll see plenty of opinions that match your own, and even exceed it. Hell, one person actually questioned the morality of taxation itself.
It's also bone-crushingly tedious and off-topic, so please don't do this on HN.
We detached this subthread from https://news.ycombinator.com/item?id=12008984 and marked it off-topic.
HN tends to downvote any political comments, especially comments that turn the discussion more political, even in a story that already tangentially touches on politics. The HN guidelines more-or-less document the former; the latter seems like a natural consequence. In general, politics is almost always off-topic here; there are many other places to discuss politics.
(Personally, I tend to agree with http://lesswrong.com/lw/gw/politics_is_the_mindkiller/ .)
Downvotes are a symptom of that: people downvote politics they disagree with and upvote politics they agree with. Politics, more so than many other topics, tends to bring out "downvote = disagree", not just "downvote = not a contribution". That's in addition to the people (myself often included) who downvote any comment that turns the discussion more political, because such comments typically reduce the quality and novelty of the discussion.
This attitude is one of the most damaging flaws in tech culture. There is this idea that engineering, design, and sometimes even business are somehow outside of politics, which is absolutely incorrect.
Politics is simply how humans interact to negotiate the mechanics of society. Creating a good or service has political consequences. Often these consequences are small, but modern technology has had an amplifying affect on political consequences that has grown rapidly. Silicon Valley culture even has a word that recognizes this: "disruption".
As politics is increasingly important in technology, traditional powers have started to fight back. A good example is the current drama over encryption (Apple/FBI, WhatsApp/India, etc); giving people the ability to communicate without government (or other) eavesdropping is not only a political act, it's also a significant shift in power that upsets the traditional political equilibrium. Local tax law is merely the current battlefield.
When you create something that affects people - even in small ways - you are taking a political position. Pretending that your work is somehow outside of politics doesn't make technology and engineering politically neutral. Ignoring politics is still a political statement; you're saying you don't care about the political consequences, which is irresponsible.
> there are many other places to discuss politics
HN is exactly the place that the politics of technology should be discussed.
> reduce the quality ... of the discussion
While I agree that rudeness, personal attacks, and other low-quality rhetoric should be discouraged, remember that attempting to silence political discussion is itself a political statement. You aren't removing politics completely; you're de facto stating that any point of view outside the status quo shouldn't be heard.
--
There is "no neutral ground in a burning world"[1]. Please consider and discuss (politely) the political consequences of technology as we integrate it into our lives. If you don't, someone else will.
[1] https://media.ccc.de/v/30C3_-_5491_-_en_-_saal_1_-_201312272... (transcript: http://opentranscripts.org/transcript/no-neutral-ground-burn... )
This is, by far, the most political site I go to. The top comments are often politicized and the top stories are typical social media "outrage" stories.
I think you're painting a picture of HN that really doesn't exist, but did probably long ago. HN now suffers from the 'eternal September' many popular forums do. Techy forum participants are often high school and college students with far left anti-US views common in youth. Its no surprise that these viewpoints are the dominant narrative here.
I imagine there are people who downvote all politics, but they are clearly a minority here. The downvote button is just a agree/disagree button in practice and shows an obvious political bias.
Not only are your comments utterly predictable, and therefor uninteresting, they are factually incorrect. It's often the right wing that want to protect the local market. The US just forced China to limit subsidies on exports [0]. The UKs exit of the EU is largely a result of the left wing not being able to convince their votes, in favor of right wing conservatives.
That Europe has turned to the left as a result of the financial crisis is also not substantiated [1][2]. The few countries that have in recent years are have all been forced to enact (right wing) economic reforms. Including Greece, France and Portugal. Which is why people are protesting, not because they have suddenly become more leftist.
If you think HN has become leftist it's very likely that you are simply older than most people on HN. Young people today, whether they consider themselves left or right, are forced to care about things like housing, healthcare, employment and other issues that were previously considered left wing because society is changing.
[0] http://www.ft.com/cms/s/0/4f4d1240-024a-11e6-99cb-83242733f7... [1] http://1.bp.blogspot.com/-q8uKkXy8X4I/TjH0passYGI/AAAAAAAAGV... [2] http://ichef-1.bbci.co.uk/news/800/cpsprodpb/1D03/production...
What I do see is a realization that the US is a fairly small minority of the global population, and that globalization and automation are stampeding across labor-based economies, and discussions of solutions to the resulting societal problems.
That's... really not true. Case-in-point: look at any frontpage post that talks about health insurance, wage floors, guaranteed minimum income, etc. There's a clearly dominant opinion, and left-leaning opinions tend to be the most frequently-posted (as well as the most frequently upvoted). This is ignoring tech-politics (ie, net neutrality, digital privacy).
People do use the downvote as a signal of disagreement (which is a problem[0], because it just polarizes discussions even more by driving away constructive, dissenting opinions[1]). But the people who downvote any political sentiment don't outweigh the rest, as evidenced by the end results.
[0] To pre-empt the perennial debate on whether downvoting purely for disagreement is bad, here are dang's thoughts on the matter: https://news.ycombinator.com/item?id=7606517
[1] There are topics on which I have a lot of domain knowledge relative to the typical HN commenter. I used to be more proactive with sharing this information in HN comments when relevant, but I only do this a small fraction of the time compared to a few years ago[2]. There's nothing more discouraging than writing a 500-word comment with multiple footnotes and external citations to primary sources and peer-reviewed articles, only to be downvoted for expressing a contrary opinion, or even simply a more nuanced version of the dominant one.
[2] I won't say whether it's gotten better or worse, but I've certainly learned from those experiences over time, and from my observations, so have other users.
>There are topics on which I have a lot of domain knowledge relative to the typical HN commenter.
I also agree with this. I have domain knowledge in a couple odd places and the top voted comments on these domains on places like reddit or HN are embrassingly wrong. It used to be we'd get a random expert drop some serious knowledge but those people seem to be gone. If you're just a run of the mill Joe and finding your random musings racing to the top via upvotes, chances are you don't know what you're really talking about, but you know how to "work the room."
Experts usually have better things to do and probably get easily discouraged by being downvoted and having to real with disingenuous or ignorant replies. Internet forums have a real problem with Dunning-Kruger suffering participants. Say, some geek does a little light reading and now thinks he's an expert on some topic. The guys upvoting him did the same light reading. So if you disagree with that Salon or Guardian or Huffpost narrative, then you're going to be downvoted because it goes against what the "local experts" think. The problem is that article, even if it isn't biased, certainly has not exhausted the problem domain or touched upon more advanced criticisms or alternative theories. How could it, in an article written for a general audience and often under 700 words?
Its a bit like being in a small town. You don't criticize the local pastor or mayor, unless you want an earful on how "we all know better than you." This is also why certain types of people flee small towns. Its insular nature is same as on internet forums unfortunately. Being mindful of this seems to be the only sane path forward and having serious skepticism of popular internet narratives as well.
I have seen more downvoted content here lately, but it's largely due to it not being very good--one liners, throw-away stuff, etc. I'm glad that's getting shuffled off to the side.
As for any shift in politics, I haven't seen that, but I have noticed that unchecked assumptions about libertarian-leaning ideas no longer get a pass. Still, that doesn't mean the site's becoming a leftist "college identity politics" (I can't even respond to that) thing, just that people expect thoughtfulness.