Microsoft Tax Dodge At Issue In Washington State 681
newscloud writes "With Washington State facing a billion-dollar biennial budget deficit, the spotlight again shifts to Microsoft's software licensing office in Reno, Nevada. 'Although the majority of its software development is performed in Washington State, Microsoft records its estimated $18 billion in licensing revenue per year through a corporate office in Reno, Nevada where there is no licensing tax. Just by enforcing the state's existing tax law from 2008 onwards, we could reduce Washington's revenue shortfall by more than 70 percent. Alternately, we could pursue the entire $707 million from Microsoft's thirteen years of tax dodging and cover most of the expected deficit going forward.' We have discussed Microsoft's creative capitalism in the past."
Disappointing though it may be... (Score:5, Insightful)
...I can't see how anyone could expect Microsoft to act differently.
There appears to be a legal loophole that has allowed Microsoft to hang onto $707 million over the years. Until a judge rules otherwise, they're going to exploit that loophole. When the loophole is closed, Microsoft is going to look for a new one. Can you say you'd act any differently?
What's that? You do act differently? You pay your taxes, you say? Well then... it sounds as though Washington would have better luck recouping its money if it simply raised the state income tax. Presumably all of the employees at Microsoft's Redmond campus file taxes in the state, yes?
MSFT will bully the state... (Score:3, Insightful)
... and threaten to move out. If MSFT leaves or even reduces force, greater Seattle's retail and real estate would be crippled, not to mention sales tax and property tax revenues. I'd like to see those taxes paid too, but unfortunately MSFT has the greater bargaining chip here.
Prepare for the usual comments (Score:3, Insightful)
Among my favorite are "but Microsoft will just move outside of the U.S." Like hell they will. You think all those C-levels, VPs and billionaire executives will want to move? And the interruption of process? The huge shift in culture? And the public opinion of Microsoft will surely enable any Microsoft competitors. And finally, if they moved out of the U.S., they wouldn't stop selling to the U.S. and you can bet there would be LARGE tariffs imposed on the import of Microsoft Software and could you imagine the new problems they would have to face being a "foreign business" selling critical systems software and infrastructure products to sensitive areas of government? Bad enough they are local, but a foreign company selling the US government crappy software?
The various problems and changes that would result are too many to imagine.
Probably best that Microsoft pay their damned taxes like everyone else.
Tax and Jurisdiction (Score:3, Insightful)
Well, I guess the Washington government could try to pass a law that taxes a company for a subsidiary whose primary location is in a tax-free zone. If it stood up to the inevitable legal challenge, I have no idea what the unintended consequences would be for the tax landscape.
Re:Dodgy statesmen (Score:4, Insightful)
Re:Disappointing though it may be... (Score:2, Insightful)
Yes, that's exactly what I would do and I have no problem with any company that does that or moves overseas to avoid our Byzantine and asinine tax system.
It WOULD be nice, would probably help most states. (Score:3, Insightful)
2. I single out Microsoft because it's, by far, one of the biggest offenders, but I would like to see the uniform enforcement of state tax law to all corporations using out of state facilities to minimize tax payments.
I definitely agree. Would be great. But as someone stated above, you can't expect one company (in this case Microsoft) to be forced to follow a rule and then not force the rest of the companies. Well, I suppose you could, but in all fairness, should Washington, or any other state, be able to single out one offender, leaving others to get away with the same? Uniformality in this would be best.
If it was legal, what can they do? (Score:2, Insightful)
Re:Disappointing though it may be... (Score:5, Insightful)
Have you left yet?
Re:Disappointing though it may be... (Score:3, Insightful)
... and, in fact, Washington already drove Boeing (HQ) away with their high tax rates. Incentives matter. Companies aren't just a piggy bank to be raided at will.
If you want to tax software development... (Score:3, Insightful)
...why don't you just do so?
Re:MSFT will bully the state... (Score:3, Insightful)
The government simple cannot and should not "roll over" for business. That has simply got to stop. If Microsoft had to move, it would be EXTREMELY painful and it would probably be an active news story for the next months following that. Government needs to finally and at last stick to its guns and push for it. Let'm go...if they actually would go. Other states will see this and, if they manage to grow a pair, will also tax them... though they'd probably end up in Texas where the law says all you have to do is put some animals on your site and you get taxed at the agricultural rate.
I really don't think they would move. I really don't.
Microsoft Is the Epitome of Evil (Score:3, Insightful)
If these companies are so hell bent not to pay taxes--then why don't they move to Russia? When I lived there, zero taxes were taken from my pay. Companies paid hardly any taxes. Oh yeah, they had to pay the Russian Mafia because the tax-starved government had no power.
So, we see the most anti-American behavior imaginable is some hugely wealthy company like Microsoft scamming the taxpayer. I hope that the state of Washington hits M$ for their entire back taxes. Microsoft could pay it out of petty cash.
Doesn't make sense (MS not doing anything wrong) (Score:5, Insightful)
Re:MSFT will bully the state... (Score:4, Insightful)
No. Other states will see this and say "gee, I'd love just 1% of Microsoft." And lower the tax rate just to attract them.
If you don't think they would move, then riddle me this. Why did they set up the Nevada shop in the first place? If not motivated by tax.
Re:Dodgy statesmen (Score:5, Insightful)
Basic Economics. (Score:2, Insightful)
This is exactly the kind of thing tax raisers refuse to understand. When taxes are too high, people will change the way they do business. It's perfectly legal to do this.
The term "Tax Dodger" is thrown around like it's a bad thing, it's not. It's smart to dodge taxes. In fact, many people do it. We use online retailers to avoid state sales tax. People who live near state lines will drive to the other state to make big purchases if there is a sales tax savings to be realized. I have cousin who travels from MD to DE to do just that.
If they make the tax too burdensome, we can watch Microsoft pick up and move from Washington to some other state that's not so arrogant as to assume that all money is theirs.
LK
Re:Dodgy statesmen (Score:1, Insightful)
Way to blame MS for using state resources without contributing to that cost.
So, you really think they've used $707 million of state resources that their employees aren't already paying for in income tax?
No Corporation Pays Any Taxes... Ever (Score:5, Insightful)
Basic economics. Corps don't pay taxes. Taxes are a cost. Costs get passed on to customers, shareholders and employees. They get passed on to you. You who buy any products made by corporations. You who has money in a 401K, Roth or any form of interest bearing account. You you work for a corporation.
There is no one else. Get over it.
America's new strategy (Score:2, Insightful)
Soak the rich.
We need to quit being assholes. Tie taxes to consumption and be done with it. Quit trying to rob the successful to pay for your shitty entitlement programs.
Re:Tax and Jurisdiction (Score:5, Insightful)
The word is "Value Added Tax" boys and girls. This is why states like Michigan have them. Companies can "move the cheese" all they want, but each organizational unit has to account for it's "productivity" i.e. the added value of their step, not just whether they made "cash profit" in order to satisfy SEC and GAPP rules. Manufacturing states learned long ago that the parent company will always make manufacturing into "cost centers" that always lose money on their operations because they don't "sell anything", both to stiff workers and the taxman. They learned to make each part of the company rate the "value" of it's incoming raw goods versus the "upstream" items. The numbers have to add up on "somebody's" books so it's easier to get the tax money where the work is done.
VAT is closer to what we plebs pay as "income tax" rather than just pure "profits tax".
Re:Disappointing though it may be... (Score:5, Insightful)
In my experience, they aren't, and empirical evidence seems to suggest they're at least not the deciding factor, given how large a percentage of the productive live in high-tax states likes New York, California, and Massachusetts.
Re:Prepare for the usual comments (Score:5, Insightful)
As though all of their competitors aren't essentially doing that already. Even MS has development in India now (and other countries, not all of which count as third world). We (on slashot) got all up in arms over IBM offering employees the chance to keep their jobs by moving to india, the main architecture for intel desktop CPU's was developed in Israel. Sure, moving out of the US would get them bad press in one place, but it would get them really good press elsewhere. Everywhere outside the US assumes the US is using MS to spy on them (which it probably is) and the US assumes everyone else is trying to inject people into big companies to spy on them (they are).
The nature of the modern world is that at least half of anything worth having is made somewhere other than where you are. Want to buy fighter jets? Good luck getting electronic control systems and displays that aren't made in east asia. Want to buy software? There are developers contributing code from all over the world.
As it is RIM (blackberrry) is a foreign company selling critical systems infrastructure in the US. And the US has a plethora of free trade agreements, MS could very smartly move its official HQ to somewhere cheap (Switzerland), with free trade to the US and watch the government cringe as it has to fight through years of losing court cases on whether imposing tariffs are legal.
As the guy above says, they could just move to a more tax advantageous state too rather than jump ship entirely.
Re:Prepare for the usual comments (Score:5, Insightful)
Or they could just move 140 miles north to Canada. Very minor shift in culture, no language barriers, no tariffs, and the US government already uses a proprietary Canadian OS on some of their devices [rim.com].
Or they could just move to Nevada.
In any case, the article doesn't provide any evidence that Microsoft is doing anything illegal, though they heavily imply it. The article links to a couple of other sites (written by the same author, how original!) that basically spew the same nonsense, but there is no indication why Microsoft can't do exactly what they are doing.
Re:Prepare for the usual comments (Score:3, Insightful)
Microsoft has already started moving/building data centers out of Washington state, which is both perfectly legal and bound to hurt the shortsighted WA state govt that thought it could just start changing tax laws on companies without any repercussions.
I agree with a previous poster that trying to blame Microsoft (a company that is probably one of the biggest sources of economic growth in the Seattle metropolitan area) for their budget problems is idiotic. All companies by nature will look for ways to get breaks and increase their bottom line. Consider Boeing, which received over $3B in TAX BREAKS (yet, officially given away by the WA govt) to keep manufacturing plants in the state - which they are barely living up to, anyway.
Only a couple of problems with that. (Score:3, Insightful)
#1. Sales taxes are the most regressive form of taxation.
#2. The state does not get a cut of the money that you spend out of state. Which is an issue when you're talking a large number of millionaires or better.
Re:Disappointing though it may be... (Score:5, Insightful)
There seem to be an awfully high number of people who commute from New Hampshire to work in Massachusetts because of the lack of personal income and sales taxes in NH. There are also a number going the other way to shop because of the lack of sales tax.
Washington keeps an eye on its borders because neither Oregon nor Montana have sales taxes. I've seen roving police patrols stopping motorists coming in who have what looks to be a vehicle full of new consumer goodies. Idaho, at that point, is more of a speed bump than a State. The panhandle is only about 85 miles across on I-90.
How many California companies actually incorporate in Nevada? How many companies from almost every other State incorporate in Nevada for just this purpose?
Lots of people cross the borders from Florida and Tennessee into Georgia to buy gasoline or cigarettes because of the drastic difference in taxes.
Taxes are a big factor when you start making decent money. It is the reason the various States have differing levels of property, sales, corporate and income taxes.
You sound unbelievably greedy (Score:3, Insightful)
How much of Microsoft's software did the state of Washington write?
There are plenty of places to do business where you don't have to pay a huge tribute to satisfy the greed of the local warlords. Some of them are even in the United States.
The State of Washington should try being less greedy. They should do less and ask the dependent class to do more for themselves.
As always, my first suggestion is for anyone on government housing assistance to be required to live with a roommate to share housing expenses. It's good enough for college students, it should be good enough for welfare recipients.
Re:MSFT will bully the state... (Score:5, Insightful)
Microsoft the 3rd largest employer in WA (Score:3, Insightful)
So help me understand this:
1. Microsoft is the 3rd largest employer in your state
2. You are in a recession
3. You have a 9.2% unemployment rate
4. You want to raise taxes on business.
So that your government has more money to redistribute to people who are not working, who lost their jobs because companies like Microsoft couldn't afford to keep them on in the first place.
Let me propose an alternative.
Reduce your spending and reduce taxes so that you can afford to pay your bills, and Microsoft can afford to rehire your residents.
Re:Dodgy statesmen (Score:4, Insightful)
And if you're seriously suggesting that a sales tax is better than an income tax of similar income, then you really need an economics lesson, badly.
Two great quotes from Oz (Score:5, Insightful)
"I am not evading tax in any way, shape or form.
Now of course I am minimizing my tax and if anybody in this country doesn't minimize their tax they want their heads read because as a government I can tell you you're not spending it that well that we should be donating extra."
I've already given you the answer on this subject, I have told you that I pay whatever tax I am required to pay under the law, not a penny more, not a penny less, and the suggestion that I am trying to evade tax, which is what you're putting forward, I find highly offensive and I don't intend to cooperate with you in the blackening of my character.
Utter Nonsense + Economic Fail (Score:5, Insightful)
A tax on profit != a cost of production.
Products and services are already priced to maximize revenue. If Microsoft (or any other company on the planet) can charge customers more money without consequences to their bottom line - they'll go ahead and charge their customers more.
Re:more of the same, apparantly (Score:4, Insightful)
Microsoft is DOING NOTHING WRONG
They're doing nothing illegal, which is quite a different thing--as you pointed out earlier in your post.
Re:Disappointing though it may be... (Score:4, Insightful)
Microsoft does great things for Washington (Score:2, Insightful)
And the Gates' too. Why think of all the construction wages and taxes they must have paid on the new Gates Foundation Campus [nwsource.com]. This lavish facility, costing $2 Billion - a mere 5% of the foundation's capital - will be a magnet to the great humanitarians of our time. They'll fly in from all over the world on their private jets to this quiet 12 acre parklike sanctuary in the heart of Seattle where they can serenely contemplate how to best relieve the plight of the world's poor while their needs are supported by 1,200 employees. In between spa treatments and lavish dining they'll confer with other great minds, and hopefully the breakthrough thinking that has evaded us all these centuries can finally occur! At their leisure they can view the historic 15,000 square foot museum that tells of the Foundation's work. Naturally armed guards will discreetly keep them free of distraction caused by the 7,000 homeless people [wikipedia.org] living only a few blocks away.
Why, look at this vision:
Sinclair said the two intersecting, light-filled, V-shaped buildings with a private, landscaped courtyard symbolize the organization's connection to Seattle and its efforts to reach out to the people around the world.
"When I look at the building I think they're like boomerangs that you throw out and they come back," she said.
The nearly transparent structure -- including glass interior walls and fixtures -- is supposed to elicit confidence in the foundation's mission, by making the enterprise inside clear to the outside world, as well as connect the people who work at the foundation, said Steve McConnell, design partner at NBBJ, the Seattle-based architects for the project.
Doesn't it just make you aspire to lend your hands to their noble cause?
Re:MSFT will bully the state... (Score:3, Insightful)
I'm dubious about the concept that Washington state deserves a slice of a cool billion dollars or so from the-rest-of-the-world just because they have developers in the state.
And if you're a Microsoft exec or a major shareholder. If you're not, why do you want to pay more taxes so a corporation with more money than God can dodge their taxes?
Re:Disappointing though it may be... (Score:5, Insightful)
Note that Obama's own budget guys are expecting to run deficits in his first four years (excluding the Stimulus package and bailouts, mind you) that will be larger than the total deficits of Bush's eight years.
Yeah, actually including two wars in your budget will do that.
Re:MSFT moving. (Score:5, Insightful)
They thought the same about Boeing. It's now in Chicago.
You want to keep the seat of leadership where you have some hope of seeing a benefit. (Consider Bentonville, AR.) They can move anywhere, anytime they want to. And they have the fiduciary responsibility to do so, or will be sued into oblivion by their own shareholders.
Re:Only a couple of problems with that. (Score:4, Insightful)
Sales tax is regressive? Is that a problem?
Who should be taxed more? A businessman (lets call him Warren) who earns a huge amount of money, but invests it back (creating more jobs), and lives a normal life; or a rich heiress (lets call her Paris) who earns a moderate amount, but spends a huge amount on consumer goods?
I like consumption tax, because it encourages people to live a balanced life.
If you want to help poor people, there are other ways. Improve buses. Fund public schools and hospitals. Etc.
Apples and oranges. Try comparing one of those people to a poor person (after all, that's supposed to be what makes a tax progressive or regressive...).
Re:Dodgy statesmen (Score:5, Insightful)
Microsoft has to pay other taxes, just not this one, to Washington. There are a slew of taxes that corporations have to pay.
The act of licensing a product doesn't actually use state resources.
If Microsoft licenses 2,000,000 $250 copies of Vista, it doesn't utilize any more state resources than if they had licensed 200,000 copies of vista, or if they had licensed 2,000,000 $100 copies instead.
You might think it implies they hire more support people in Washington, and thus further use state infrastructure... but it doesn't, thanks to outsourcing and call centers in India.
And most copies of Windows licensed are OEM, and volume licensed, which doesn't generate additional support demands.
Re:Prepare for the usual comments (Score:3, Insightful)
You're absolutely right. Microsoft won't be going anywhere. They'll just continue laying off the residents of Washington state.
Then by your logic, Washington state will raise taxes to pay those laid off employees to be unemployed, rather than Microsoft pay them to be productive.
This is brilliant.
Re:Prepare for the usual comments (Score:5, Insightful)
> " Like hell they will. You think all those C-levels, VPs and billionaire executives will want to move?
And I'm sure the locals said the same thing about Boeing as they happily taxed the crap out of them to fund their left coast utopia. Of course they did move their headquarters out of the state. And are building a big non-union plant down south.
Microsoft doesn't have to just pick up it's ball and leave. Just keep building out facilities in multiple States and countries like they have been doing and play each of them against the other for the most favorable tax and regulatory treatement. If Washington gets too aggressive on this issue threaten to move the official headquarters. There ARE a lot of nice places just in the US and many are actually pretty nice to live in. The current location wasn't even the first one ya know.
Even better leverage, especially in this crappy economy, is to just threaten to push all new hiring to more favorable business environments. I.e. threaten the politicians with a terrible press release about a new thousand headcount shop that won't be opening in the state because of the bad business climate. And if they think it is a bluff, do it and do it over until they either get a clue or the center of mass has actually moved to a better place and then really relocate the HQ.
For a company like Microsoft where they are doesn't really matter much so long as it is the sort of place key personnel wouldn't be demoralized living in. They have no ties to a natural resource, no major transportation needs, etc.
Re:MSFT will bully the state... (Score:5, Insightful)
The government simple cannot and should not "roll over" for business. That has simply got to stop.
Okay. Please name several instances where the Washington state government has "rolled over" for Microsoft; please provide references so I can check up on them.
I am not aware of any "rolling over" by the state government. Microsoft is a Washington company. It pays its Washington business tax, its various real estate taxes (and those are freaking huge because Microsoft drove up all the property values remotely close to its headquarters), and the employees of Microsoft live and shop in the state, thus paying real estate taxes, sales taxes, and restaurant taxes. In short, Microsoft has brought a whole bunch of money into Washington state's coffers. I'm sure the state would like some more, but Microsoft is not illegally evading taxes, as far as I know.
And I don't hold it immoral for Microsoft to game the system in exactly the same ways that every other company does. As others have noted, how many companies are incorporated in Delaware?
If Microsoft had to move, it would be EXTREMELY painful and it would probably be an active news story for the next months following that.
You cannot use that particular threat forever; eventually the company gets tired of it, and actually moves.
Case in point: Boeing. Boeing did finally get fed up with Washington state, and they moved their headquarters to Chicago. Airplanes are still assembled in Washington, at least for now. Boeing executives publicly claimed that they wanted to be in a different time zone, but I don't believe that; for years, Boeing had been negotiating with the Washington state government, trying to get a better deal, without success; Illinois offered them enough to make it worth the move.
http://money.cnn.com/2001/03/21/companies/boeing/ [cnn.com]
Boeing actually moving their headquarters was a big shock here, and I would not be surprised if Washington state would be willing to do a certain amount of "rolling over" if Boeing threatened to move the airplane assembly as well. That also goes for Microsoft: I'll bet the state government would do quite a lot of "rolling over" if that is what it took to stop Microsoft from leaving the state.
Let'm go...if they actually would go. Other states will see this and, if they manage to grow a pair, will also tax them...
I'm afraid that's not how it works. Other states would go "OMFG we have a chance to get freaking Microsoft in our state" and they would start thinking about all the tax revenues that would be shifting from Washington to their state. They would start offering deals to Microsoft.
And it is just as legal for Microsoft to shop around for the best state to move to, as it is for you to shop around for where you want to live. I, and no doubt many other people, prefer living in Washington state rather than Oregon because Washington doesn't have a state income tax, and Oregon does. Am I a bad person for not moving to Oregon and paying Oregon income tax? Am I somehow cheating Oregon out of the taxes they could have had if only I had moved there? Is Microsoft a bad company for legally shifting money to another state where the tax situation is more favorable?
steveha
Re:Dodgy statesmen (Score:5, Insightful)
Well, I've not seen anywhere on the article, nor on this forum, a listing of what laws were broken.
I mean, corporations do this all the time...many companies incorporate in Delaware for the tax breaks they get, even while most of their manufacturing/business/warehouses are in other states. While you might rightully bitch about the 'moral' aspect of this...if they really broke no laws on the books, then they did nothing wrong legally.
Would Washington be a better place if MS just pulled up roots, and moved to another state? Another country?
I'm just curious...why are tax revenues so bad in the state where a company like MS is employing what I could guess is a good number of people and what I would guess were pretty good salaries/bill rates? What is the state income tax like there? What is the sales tax there? What is the property tax there?
Most states get most of their money from many or (in the case of my state ALL) of these.
I'm just saying...if MS (and I can't believe I"m defending MS here) actually broke no tax laws, then you really can't accuse them of tax evasion. It is not against the law to work within the law. If you don't like the tax laws as they are, change them. Just don't be pissed if they then leave the state. Other states would be thrilled to have the high paying jobs within their borders.
Comment removed (Score:4, Insightful)
Comment removed (Score:4, Insightful)
Re:Dodgy statesmen (Score:3, Insightful)
Perhaps they might look at cutting back on government?
Re:Disappointing though it may be... (Score:5, Insightful)
The system is devised that if you have a lot of money, and know what you're doing, you don't pay a lot of taxes.
That's because the people that write tax laws are usually pretty wealthy. They write loopholes in for themselves to take advantage of. I'm personally of the opinion that dramatically simplifying the tax code to prevent this is more important than "fixing" health care.
Re:Only a couple of problems with that. (Score:3, Insightful)
Warren doesn't fund companies from an altruistic job creation goal. He funds companies to get a return on his investment. The actual creation of jobs is far more demand driven than supply driven anyway. He increases his income by investing his money.
Regressive taxes such as sales tax will hit much harder on the poor. When you have to spend 90% of your income on housing & food you'll pay taxes on at least 90% of you're income with a sales tax.
So what you're doing is allowing those who make/have lots of money to make a lot more money, and making it very difficult for those without a lot of money/income to increase their position. The rich get richer, the poor get poorer, and the divide increases.
Re:Microsoft does great things for Washington (Score:5, Insightful)
"The Bill & Melinda Gates Foundation broke ground Tuesday on its new $500 million headquarters, which the world's largest charitable foundation hopes to occupy in late 2010."
Just how much do you think a nearly million square foot complex in downtown Seattle should cost, capable, as you said, of supporting 1200 employees.
The headquarters are being paid for by the Gates' directly, not out of the $38B endowment they've set up.
Yeah, "using its $37.3 billion endowment to fight diseases like AIDS and malaria, start a green revolution in Africa, improve American high schools and provide Internet access at libraries throughout the world" at a minimum mandated level of $1.5B/year sounds fucking horrible and selfish of them, if you ask me.
Historically, that's untrue (Score:4, Insightful)
"Other states will see this and, if they manage to grow a pair, will also tax them"
They won't. Delaware has been a haven to corporations forever. Florida and Delaware are considered low tax states and thus they benefit by attracting lots of people who pay a little bit of taxes.
We can argue this all day long, but the results are there in front of you. It's already happened.
Re:Disappointing though it may be... (Score:3, Insightful)
I don't know about Washington, but my state, California has plenty of hits when you google "companies leaving California"...
California is one of the largest economies in the world. Companies move around all the time. It shouldn't be surprising that you'll get a lot of hits if you Google for "companies leaving California", since California has so many damn companies in it already.
The more important thing to look for is the growth rate. Are jobs being created in California? Is California's economy growing? The number of companies leaving California is meaningless by itself.
Re:Disappointing though it may be... (Score:4, Insightful)
Re:Dodgy statesmen (Score:1, Insightful)
Regardless of what you think of MS, the above post is not a troll. The mod who modded that needs to never have mod points again.
Re:Dodgy statesmen (Score:2, Insightful)
I'm glad that Slashdot now has a chief economist with such well-considered and comprehensive solutions to the world's problems?
Re:Not surprised. (Score:3, Insightful)
"This isn't a liberal tax and spend issue. "
No, it's not. It's a Tragedy of the Commons issue. Any service provided for "free" (i.e. provided at the expense of non-users) results in over-use of that service. Microsoft should pay for their own fire, water, security, roads, etc., and then they should be free to keep the money they earn for their shareholders.
Who is more evil? (Score:2, Insightful)
I will post in the best slashdot etiquette possible. hmm... two evil empires, the State gov. or MS. In a landslide I would choose MS every time in this situation. I don't have to pay the so called MS tax if I don't want. I don't get that choice at all when it comes to the State. The States (not just WA) spend WAAAY more then the take from us. Yes all you liberal do gooders, I said take. Add up the taxes you pay sometime. Don't forget to include all the 'extra' taxes you pay with your post tax wages. WA crying like a little bitch is the ultimate 'no personal responsibility" claim I have heard.
They, meaning all the States, must stop spending more then they have. Take a hard look at bloated employment roles, excessive pension/health care plans, failed social programs and tighten the belt like everyone else must.
If I were MS, I would tell WA to pound f'ing sand and move my entire operation to Nevada. Then let's see how big their deficit would be.
Re:Disappointing though it may be... (Score:2, Insightful)
Re:Don't blame Microsoft (Score:3, Insightful)
That will help Linux, when the USA Federal Government mandates use and requires all providers to support Linux.
You might want to lay off the crack pipe. They'll be more likely to sign off purchases of Apple computers, designed in California.
Sales taxes are not 'regressive' (Score:3, Insightful)
Rarely do sales taxes cover things like rent, utilities, and food. Since these are most of the 'base load' for the poor, they are effectively only taxed on their bad habits, EG booze and ciggs, for which a strong argument can be made that they should be discouraged anyway.
Rich people buy fancy cars, boats, buy lots of gas, etc. that DO get taxed.
Re:Dodgy statesmen (Score:4, Insightful)
Speaking of tax evasion, you're still required to pay State sales tax regardless of buying it online. The differernce is whether the company is required to collect it on your behalf.
Not claiming that on your taxes is tax evasion, but so far the States haven't cracked down on it, other than a few noteable examples. Search on Michigan going after folks buying mail order cigarettes. Yeah it was the cigarette excise tax they went after, but what's stopping them from pursuing other major retailers for a list of customers who dodged the sales tax?
Re:Prepare for the usual comments (Score:3, Insightful)
Re:Dodgy statesmen (Score:2, Insightful)
I'm just saying...if MS (and I can't believe I"m defending MS here) actually broke no tax laws, then you really can't accuse them of tax evasion. It is not against the law to work within the law. If you don't like the tax laws as they are, change them. Just don't be pissed if they then leave the state. Other states would be thrilled to have the high paying jobs within their borders.
State? You are narrowing the field too tight. With the current administration, simply moving to another state may be short sighted. To pay for all the bailouts, carbon credits, and universal health care, there will me many more companies that are international looking to move headquarters. The states and country can then simply tack on import duty fees and sales taxes to collect revenue from the made in India or China imports.
Have we gone insane? Governments instead of being happy with the glass is half full an it's a big glass are looking at the glass is half empty, we are not getting the full deal and are thus knifing the golden goose to get all the eggs. Many of these geese are flying overseas.
Can we get an administration in office that understands some economics?
Comment removed (Score:3, Insightful)
Re:To hell with BIG GOVERNMENT (Score:4, Insightful)
Why shouldn't they tax licensing? You think it's not a product? Get real.
I also hope they stick it to Microsoft good. With their huge campus in Washington there's no way they should be able to dodge taxes by "selling" out of Nevada, period.
Re:Texas has no income tax, just sales tax (Score:3, Insightful)
The problem is these illegals ( rrr undocumented) workers are consuming alot more tax money than they put in which is bankrupting states like California. Especially if the tax payers are paying for each baby and hospitalization costing tens of thousands each.
The problem is poor people do not have that much money to consume and most money is just transfered to their home countries and is not taxed nor re-invested.
They make so little money that they can't be taxed. Sales taxes are part of the problem as I agree they are regressive ... I dislike income taxes too as they encourage CEO's and investors to move out of states to cheaper places.
Re:Only a couple of problems with that. (Score:1, Insightful)
Re:Dodgy statesmen (Score:5, Insightful)
"I'm just curious...why are tax revenues so bad in the state where a company like MS is employing what I could guess is a good number of people and what I would guess were pretty good salaries/bill rates?"
Because Washington has no income tax which is a major reason Microsoft is based there and Bill Gates lives there. They depend on property taxes among other things, which are probably having a substantial shortfall in a crashing real estate market.
Corporate taxes are a lot like the Internet, no one wants to pay for anything, they just want a lot of cool things for free, you know like highways, schools, universities, prisons(so there isn't so much crime). Not sure if they still do but there was a time Microsoft was using prisoners as ultra cheap labor to pack products.
Not versed on tax law enough to say if Microsoft is breaking the law but its a given they are bending it to the absolute limit if they aren't out right breaking it, like most big corporations. They want the middle class working people to pay all the taxes.
I'd seriously like to see Washington put the smack down on them and see Microsoft pull up stakes and move to the nice repressive one party dictatorship that is China and see how Microsoft's execs really like it there if they actually have to live and work there. Or move to India and live in a tiny high tech pocket of affluence in a country with otherwise grinding poverty, serious ethnic and religious tensions and a near perpetual state of war with Pakistan.
Re:Dodgy statesmen (Score:5, Insightful)
Sorry, but it's pretty naive and, as you say, short-sighted, to think that the previous administration was any better, or that the future one will be.
Re:Dodgy statesmen (Score:3, Insightful)
What, 2 replies to you already and nobody stated the obvious? If I license 2,000,000 copies of Windows from Microsoft, it doesn't utilize any more of Microsoft's resources than if I had licensed only 200,000 copies instead. Nor does licensing Vista Mickey-Mouse Edition use any more Microsoft resources than licensing Ultra Enterprise Edition. The vast majority of Microsoft's business is just charging OEMs and enterprises $x for each OS image they clone. Their entire business model is based on charging people whatever they can pay! "From each according to his ability," as it were.
Re:Texas has no income tax, just sales tax (Score:5, Insightful)
Or be the member of a board for a corporation and buy everything except basic food on the Corp credit card, buy a house through the corp then rent it off the corp, own nothing and take a tiny salary. Then send the corporations profits to a shell account in the cayman islands then claim your expenses back as a cost at tax time claiming the corp is not profitable, your offshore account unreachable by the tax man to see if your lying or not.
Effectively paying no tax.
As many thousands of the upper class do.
Oh I forgot, then have misguided middle class individuals argue for your right to continue doing this. While lobbying your mates in government to increase the tax burden on them because your corp needs infrastructure built and a solid and expensive society to exist to continue being profitable in your highly "unprofitable" venture (wink wink).
Then laugh all the way to the bank come retirement.
Re:Microsoft the 3rd largest employer in WA (Score:4, Insightful)
Re:Dodgy statesmen (Score:5, Insightful)
Can we get an administration in office that understands some economics?
So you mean encouraging imports over exports, removing corporate personhood, supporting cooperatives and small scale businesses and breaking up large monopolies? Or do you really believe the last 8 years haven't been completely dysfunctional, too?
Re:Dodgy statesmen (Score:4, Insightful)
You're not versed on tax law so wtf makes you think you can even state they are pushing the bounds? It is either illegal or it isn't, and given that thousands of companies big and small do the same thing MS is doing I doubt its legal status is particularly contentious.
An individual or company is doing nothing wrong by minimising it's tax liabilities in a legal way. If the tax system is either poorly thought out or full of 'loopholes' then get those fixed. Generally, one of the biggest problems with western tax systems is complexity. Simpler taxation tends to be fairer.
In the UK we have an incredibly complex tax system, we get taxed on savings (except ISAs which can only have so much paid in per year, and that quantity varies depending on whether you want to save only cash or cash/shares). If you own sufficient assets it can be worth creating a corporation and gradually transferring ownership to your children to avoid inheritance tax etc. This complexity virtually always benefits the rich, as only experts can understand enough to play the system well.
Re:To hell with BIG GOVERNMENT (Score:3, Insightful)
Re:Ya no kidding (Score:3, Insightful)
Re:Dodgy statesmen (Score:1, Insightful)
although considering the fact that individuals with low income do not have the option of saving
Providing an incentive to earn more. Yes, I mean it, I've heard too many people complain that overtime isn't worth it because of the amount of tax to swallow your argument. Many low income people would earn more if they didn't think the government would just take it.
It's a capitalists dream.
Good. You've totally convinced me it's the way to go.
Re:Dodgy statesmen (Score:5, Insightful)
Actually, the studies that I have seen are looking at expenditures on care, and resulting outcomes of the patients that received the care. The outcomes are largely uncorrelated with variations in spending across the US, which vary by almost 100% from lowest to highest, and are universally somewhat worse than similar outcomes from the Canadian, British or French systems for similar cases. They're not horrible, but they aren't the best despite radically higher spending on a case by case basis in the countries with the evil commie plans.
GP talks about government waste. Medicare, the US government run health system for the elderly, has about half the administrative cost load of private insurance companies, and aggressive negotiates for lower treatment costs. It could have been a force for lowered drug costs, but Congress specifically prohibited that. The government waste tends to come from Congress, not the rank and file.
Taxes are not the reason (was Re:Dodgy statesmen) (Score:3, Insightful)
"I mean, corporations do this all the time...many companies incorporate in Delaware for the tax breaks they get, even while most of their manufacturing/business/warehouses are in other states."
That's not strictly true. While it is true that you avoid some state taxes (e.g. franchise taxes) if you incorporate in Deleware, that is not the reason most firms incorporate in DE.
The main reason companies incorporate in DE is to take advantage of favorable corporate law regarding how corporations may be governed. Things like poison pill statues, how boards are elected, limits on management liability, relaxed rules on board composition, etc. Tax avoidance is pretty minor since, you can't use your DE status to avoid any income, property, sales, or use tax.
- Rob
They already do this (Score:3, Insightful)
Think about it. Every dollar someone makes is taxed with income taxes (and sales taxes for a lot of them). That same dollar, keep your eye on it, gets spent, someone else gets it, for producing a good or service that it is exchanged for. They in turn are taxed on it. And again, and again, and again. And it just keeps going like that. Dollars get taxed on themselves several times over what they are worth, and they start as private bank debt notes to begin with and are loaned into existence. And because this is an exchange of debt instruments for debt instruments, the original "fee" that the lender charged can never be "paid off".
It's the biggest complicated ongoing set of economic frauds out there, since they switched from money being representations of past produced wealth (or intrinsic wealth directly), with a natural scarcity that more reflected the real market, to representations of poof created "credit" by some anointed private contractor to the government, which is all the "Federal" reserve is, a private contractor that took over which was legally supposed to be Congress's job on setting the value of the officially recognized and accepted currency.
And that's why we have such an economic mess today, one of the main reasons, they opened up the legal possibility of unlimited future calls on your labor to the banking establishment, "just because", with *no way possible even theoretically* to ever "pay them off".
Re:Ya no kidding (Score:3, Insightful)
Is it fair for a large company to straddle many localities and take advantage of chalking-up all it's business in the one that has the sweetest deal, while smaller companies and individuals are stuck paying where they are?
Sorry, dude. Even if you don't agree with corporate taxes on principle, they have to applied uniformly if they exist. Letting large companies get away with this sort of thing stifles innovation by raising the cost-of-entry for startups and smaller companies.
Taxes aren't based on how much 'other good' you do, they're based (theoretically) on the cost of providing services, divided as fairly as possible amongst the consumers.
I live in a small city where 52% of the real estate is tied up in 'non-profits' (the universities, hospitals, and the state itself are our three biggest employers), and I can tell you, the $26/$1000 property tax on those foolish enough to remain in the city is turning this place into a lunar wasteland.
Re:Only a couple of problems with that. (Score:2, Insightful)
1. Who should be shot for spending the USA into a $12 trillion debt?
We the people.
I don't know that anyone should be shot, but we are all at fault. Your (Our?) impotent rage is built upon decades of indifference by the general public.
Re:Dodgy statesmen (Score:3, Insightful)
The previous administration is the one that got us into this mess, but when you put people in charge of government who think government is always the problem and never the solution you can't expect good, effective government.
It's too soon to tell whether this administration will be any good. I'm both hopeful and fearful.
Re:Dodgy statesmen (Score:4, Insightful)
I bet the politicians in Michigan would be thrilled to offer MS a brand-new building, taxfree status, and other benefits in order to hire their ~15% of unemployed citizens.
You seem to be assuming that the unemployed of Michigan are instantly interchangeable with the existing MS employees. Something tells me that that probably isn't the case for the majority of their employees. Looking at just code monkeys, does Michigan even have residents with the right skillsets? Nevermind the intimate knowledge needed in order to immediately jump into one of MS's projects. If MS were to move, it would probably be far more cost effective to pay for the relocation costs of the current employees, than to retrain new employees from scratch.
Comment removed (Score:3, Insightful)