Alphabet CFO supports higher taxes, global minimum tax

Diving letter:

• The global minimum tax on businesses and tax increases for millionaires proposed by the Biden government should be supported. Ruth Porat, CFO of Google parent Alphabet, said Wednesday at the Washington Post’s Women in Tech conference. “We have to do our part,” said Porat, whose 2020 salary was just under $ 51 million.

• The intent behind paying more taxes, according to Porat, is to provide a much-needed infrastructure program that Google is committed to supporting.

• “Sustainable growth that is positive for everyone must be inclusive growth, and we must all do our part,” said Porat. “I think that applies across the board to everything we do as business leaders … and I feel the same way now as an individual.”

Dive Insight:

Porat has been Alphabet’s CFO since 2015 Crises are not alien. She began her career at Morgan Stanley just weeks before the 1987 stock market crash.

According to Forbes, she was “the chief architect behind the debt financing that saved Amazon from near collapse during the dot-com crash in 2000”.

During the 2007-08 recession, Porat directed Morgan Stanley’s global reporting on financial institutions and governments, advising the Treasury Department and the New York Federal Reserve Bank.

“From 2008 I saw very clearly that you need a team that has already gone through a crisis and has a lateral vision,” said Porat on the panel. “In a crisis, the facts are not clear and you try to sum things up.” So you essentially have a tapestry with all these different points – none of which alone tells the story. ”

Porat said it takes a strong team to be successful in the face of challenges. Google’s “coordinated approach was key” to responding to the pandemic, she said. “It is this side vision that interweaves what is going on in the States. And these types of lessons are important. Unfortunately, this will not be the last pandemic we will have. “

If you have an experienced team, you know your vulnerabilities, protect yourself from them, act quickly and be aggressive, she said. “These are the lessons.”

Taxes required

Biden Has suggested Raising the federal maximum rate for long-term capital gains and qualified dividends from 20% to nearly 40% for the top 0.3% – taxpayers with annual income above $ 1 million.

On the business side, tThe Biden government’s Made in America tax plan would increase taxes on US multinational corporations by 81% to $ 104 billion in 2022 and 72% to $ 1.2 trillion in the next decade, according to a Study of the tax foundation.

It would also impose an average surcharge of 9.4% on overseas operations by US multinational corporations in excess of the taxes they pay overseas, among other changes aimed at keeping more corporate money in the US.

Porat said both she and Alphabet support paying more corporate taxes, as proposed by the Organization for Economic Co-operation and Development and supported by US Treasury Secretary Janet Yellen.

Google supports the OECD “a lot,” she said. “We believe this creates a sustainable solution and ensures that we are doing the right thing in the US.”

“Google is already one of the largest taxpayers in the US. In fact, we pay taxes on average across the OECD, ”she said. “We have our international one [intellectual property] back to the US a few years ago. So we have a good structure. “

As for the series of stimulus checks granted to households during the pandemic, Porat believes they are making a meaningful difference and “throwing a lot of liquidity into the market”.

“I was very concerned at first about how deep [the pandemic] she said. “Continuous support – especially for small and medium-sized businesses and the most marginalized companies – was critical.”