The Biden administration’s proposed global minimum tax on corporations and millionaire tax hikes should be supported, Ruth Porat, CFO of Google parent Alphabet, said at the Washington Post’s “Women in Tech” conference Wednesday. “We need to do our part,” said Porat, whose 2020 salary was just short of $51 million.
The intent behind paying more tax, Porat believes, is to deliver on a vitally needed infrastructure program, which Google is committed to supporting.
“Sustainable growth, which is positive for everyone, needs to be inclusive growth, and we each need to do our part,” Porat said. “I think that’s true across the board in everything we do as leaders of companies ... and I feel that same way now as an individual.”
Porat, who has been CFO of Alphabet since 2015, is no stranger to crises. She began her career at Morgan Stanley just weeks before the stock market crash of 1987.
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 led Morgan Stanley’s global coverage of financial institutions and governments, and advised the Treasury Department and the New York Federal Reserve Bank.
“I saw very clearly from '08 you need a team that's been through a crisis before, and has lateral vision," Porat said on he panel. "In a crisis, facts aren't clear, and you're trying to piece things together, so you essentially have a tapestry with all of these disparate points—none of which alone tells you the story.”
Porat said it takes a strong team to succeed in the face of challenges. Google’s "coordinated approach has been key" to its pandemic response, she said. "It's that lateral vision, weaving together what's going across the states. And those kinds of lessons are important. This will not, sadly, be the last pandemic we have.”
Have a seasoned team, know your source of vulnerability, protect against it, move quickly, and move aggressively, she said. “Those are the lessons.”
Biden has proposed raising the maximum federal rate on long-term capital gains and qualified dividends to almost 40%, up from 20%, for the top 0.3%—taxpayers with an annual income exceeding $1 million.
On the business side, the Biden administration’s “Made in America” tax plan would increase taxes on U.S. multinational corporations in 2022 by 81%, to $104 billion, and by 72% over the next decade, to $1.2 trillion, according to a Tax Foundation study.
It would also impose a 9.4% average surtax on foreign activities by U.S. multinational companies above the taxes that they pay abroad, among other changes intended to keep more company money in the United States.
Porat said both she and Alphabet support paying more in corporate taxes, as has been proposed by the Organization for Economic Cooperation and Development and supported by U.S. Treasury Secretary Janet Yellen.
Google “very much” supports the OECD, she said. “We think this creates a sustainable solution and ensures we’re doing the right things across the U.S.”
“Google is already one of the largest taxpayers in the U.S. We actually are paying taxes in line with the OECD average,” she said. “We brought our international [intellectual property] back to the U.S. a couple of years ago. So, we've got a good structure.”
As for the string of stimulus checks given to households during the pandemic, Porat thinks they’re making a meaningful difference, “throwing a lot of liquidity into the market.”
“I was very concerned at the outset as to how deep [the pandemic] could go,” she said. “The ongoing support — in particular for small to medium-sized businesses and the most marginalized, has been key."