Earlier today, Gawker’s Valleywag blog expressed its outrage that Google is still paying barely any taxes on its revenue. The piece appears to be part of a concerted campaign by Gawker to shame wealthy tax dodgers. On Tuesday, writer Hamilton Nolan wrote an essay attacking those who avoid tax as “unpatriotic.”
Much as it pains me to agree with anything on Gawker, their implied argument is a compelling one. If companies and entrepreneurs want to enjoy the huge opportunities that America offers then surely those companies and individuals have a moral obligation to pay taxes on that money?
As Pando alumn Farhad Manjoo wrote when one of Facebook’s founders announced plans to give up his US citizenship to avoid taxes on his Facebook riches:
Would Eduardo Saverin have been successful anywhere else? Maybe, but not as quickly, and not as spectacularly. It was only thanks to America—thanks to the American government’s direct and indirect investments in science and technology; thanks to the U.S. justice system; the relatively safe and fair investment climate made possible by that justice system; the education system that educated all of Facebook’s workers, and on and on—it was only thanks to all of this that you know anything at all about Eduardo Saverin today.
Fortunately my discomfort at potentially agreeing with something on Gawker is somewhat mitigated by the fact that Gawker’s published words about taxation bear absolutely no relation to the company’s actual beliefs on the subject. In fact, Gawker’s coverage of corporations dodging US taxes comprises some of the most breathtaking hypocrisy ever to render meaningless the word “journalism.”
As today’s Valleywag post completely neglected to mention, Gawker Media has done everything it possibly can to avoid paying US taxes.
Back in 2010, the New Yorker wrote a lengthy piece exposing Gawker’s use of companies in Hungary and the Cayman islands to avoid paying US taxes. The normally staid New Yorker likened Denton’s operation to “an international money laundering operation.”
Gawker is organized like an international money-laundering operation. Much of its international revenues are directed through Hungary, where Denton’s mother hails from, and where some of the firm’s techies are located. But that is only part of it. Recently, Salmon reports, the various Gawker operations—Gawker Media LLC, Gawker Entertainment LLC, Gawker Technology LLC, Gawker Sales LLC—have been restructured to bring them under control of a shell company based in the Cayman Islands, Gawker Media Group Inc.
The National Review was quick to point out the hypocrisy of Gakwer attacking Mitt Romney’s “tax-dodging Cayman schemes,” albeit through the Review’s conservative, anti-tax lens…
U.S. tax practices create very powerful incentives to pursue avoidance strategies. Gawker’s owners apparently know that, even if its writers lack the guts or the intellectual capability to acknowledge as much.
Of course, Gawker being grotesquely hypocritical is nothing new. This is the publication which, when not calling out tax dodgers from its fake headquarters in the Caymans, attacks companies which underpay their interns while being sued for paying its own interns zero, and started a class war against well-off tech douches while being populated by an army of the same.
What is new is that apparently one of Gawker’s senior staffers is finally willing to admit that his colleagues are full of shit.
Previously Gawker staffers and execs have stayed silent when asked to account for their hypocrisy on their own company’s tax dodging. Apparently not everyone got the memo. A few days ago, James Del, Executive Director of “Studio@Gawker,” the company’s native ad department, took to Gawker comments to post this bizarre explanation of why, yes, his bosses are a bunch of tax-dodging hypocrites but… well.. they have no choice…