Should Google Give Up Its Tax Loophole?

Tim Fernholz says Google is betraying its "don't be evil" motto by minimizing its tax bill:

It's one thing to take advantage of legitimate tax law, but exploiting these loopholes for the sole purpose of paying less tax violates the spirit of the law, if not the letter. That would be fine if Google was content as a typical business, relentlessly pursuing profit with no thought to the public interest. They simply shouldn't pretend they're somehow better than the Exxons and Goldman Sachs of the world.

This seems to imply that the typical business is evil. But even a corporation that wanted to maximize the money it spends on public goods unrelated to its industry would be better off paying as little in taxes as possible and then giving the savings to the charity of its choice. Money funneled through Washington DC is spent partly on things like ethanol subsidies, foreign wars, and interest on the national debt.

It's hardly evil to imagine that putting your dollars to different uses is a better investment in the public interest than feeding our inefficient federal system.

Says Kevin Drum:

There are, obviously, some tax dodges that are egregious enough to qualify as pretty close to evil. But declaring revenue in whatever country gives you the best tax treatment? No matter how many clever names we make up for this, the fact is that virtually every company with foreign operations does this. It's just routine. Google's motto is "Don't Be Evil," not "Don't Be An Idiot."

More generally, I think that taking full legal advantage of tax laws is rarely unethical. We all do it. I think that the mortgage interest deduction is bad policy, for example, but I never miss an opportunity to declare it. Ditto for any other deduction I can get away with, regardless of how I feel about it from a philosophical point of view. I'd be happy to see the tax code changed, but in the meantime I certainly don't feel bad for refusing to be a high-minded sucker while everyone else follows the actual existing law.