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Ballmer, Bezos Fund Effort To Undermine Bill Gates 866

Posted by CmdrTaco
from the rich-get-richer dept.
theodp writes "You know what they say — it takes money to avoid paying money. TechFlash reports that Microsoft CEO Steve Ballmer and Amazon.com CEO Jeff Bezos have contributed $100,000 each to an effort to defeat an income tax on individuals in Washington state making more than $200,000. The backers of Initiative 1098, which is set for the November ballot, include Bill Gates (Sr.), who has emerged as one of the most vocal proponents of the income tax. Under the proposal, which has drawn the ire of the Bezos and Ballmer-backed Defeat 1098, no tax would be due on the first $200K of income, 5% tax would be owed on income between $200K and $500K, and everything above $500K would be subject to a 9% tax (cutoffs are doubled for joint returns)."
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Ballmer, Bezos Fund Effort To Undermine Bill Gates

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  • by Geoffrey.landis (926948) on Tuesday September 21, 2010 @10:19AM (#33649412) Homepage

    Living in a state that does have an income tax, I have to say that I don't have much sympathy for the billionaires who are crying over the fact that they might get taxed on the part of their income over $200,000 per year. Aw, isn't that just too bad.

    • by LifesABeach (234436) on Tuesday September 21, 2010 @10:37AM (#33649756)
      The pressure of being a multi-billionaire is immense. Maybe these tragic ones could find peace in some other climate. Maybe a place where Monsoons are spelled with accent marks? But why there? Well, that was were their wealth came from of course. There's good times there, and everyone knows their name.
      • Re: (Score:3, Interesting)

        by paeanblack (191171)

        "A democratic government is the only one in which those who vote for a tax can escape the obligation to pay it."

        --Alexis de Tocqueville, Democracy in America, Vol. I, 1835

    • Re: (Score:3, Insightful)

      by FooAtWFU (699187)
      I dunno about "billionaires". I bet many of their better software engineers are making close to that much, and many of them in 2-income families (I assume the threshold there is higher but still present). That marginal rate is half of California's. And unlike Seattle, Silicon Valley has pleasant weather. All of a sudden Seattle is going to look a little less attractive, and a little less competitive a location to do business.
      • by NewbieProgrammerMan (558327) on Tuesday September 21, 2010 @11:29AM (#33650818)

        I bet many of their better software engineers are making close to that much...

        You mean actual, non-management, I-write-software-all-day people making near $250k per year at M$ and/or Amazon? I've worked at one of those companies, and I seriously doubt it--I would be really surprised if more than 1% of software engineers make more than $150k.

      • by vux984 (928602) on Tuesday September 21, 2010 @11:58AM (#33651350)

        I dunno about "billionaires". I bet many of their better software engineers are making close to that much

        a) I bet very few of them make close to that much. The average rate for software engineers is not 6 figures. Most don't make 100k. Some small fraction make 6 figures. And some tiny fraction clear $200k. If anyone is doing significantly better than that its likely from 2ndary income from investments that are paying off... rental income on the condo, stock options, etc.

        b) I don't know tax options at all in the US, but around here one can usually qualify for several tax deductions before calculating tax rates. There is often a substantial difference between gross income and "net taxable income". I would expect a person making $220k gross income could likely easily have a taxable income down at $190k, and still not pay this tax.

        At $250k, suppose you get it down to $230k, and then have to pay this 5% tax on income over 200k. Oh noes you make a quarter million dollars, and a tax bill of $1500 is going to send you packing.

        and many of them in 2-income families (I assume the threshold there is higher but still present).

        Doubled so not relevant as you noted yourself in a follow up.

        That marginal rate is half of California's. And unlike Seattle, Silicon Valley has pleasant weather.

        Right. Move to california, the bankrupt state. I'm sure they won't raise taxes any time soon. Meanwhile you can enjoy a myriad of other things like electricy that costs twice as much...

        All of a sudden Seattle is going to look a little less attractive, and a little less competitive a location to do business.

        Good riddance. I'm sure the people who stay behind will be happy to pay a couple thousand bucks in taxes and fill all those piles of 250k/year software engineering jobs that get left vacant. ;)

    • by catchblue22 (1004569) on Tuesday September 21, 2010 @12:20PM (#33651716) Homepage

      The top American marginal income rates from 1944 to 1963 were 92%. Yes, 92% of income made over the top amount, went to taxation. In 1944, if you made over $200,000, 92% went to the government. In 1963, it was $400,000. And yet, this was a period of profound economic expansion and middle class comfort. Kind of makes you want to question the "conventional wisdom" that all taxes are bad.

      This is a list of American historical tax rates: http://www.taxfoundation.org/files/fed_individual_rate_history-june2010.pdf [taxfoundation.org]

  • Just pay the tax (Score:5, Insightful)

    by commodore64_love (1445365) on Tuesday September 21, 2010 @10:19AM (#33649420) Journal

    >>>"contributed $100,000 each"

    It would be cheaper for them to just pay the tax.

    • by hibiki_r (649814)

      It wouldn't: After you take into account all their income, they are both probably over 7 figures, making the tax cost them a whole lot more than 10k.

      That's the CEO life for ya.

    • by loshwomp (468955)

      It would be cheaper for them to just pay the tax.

      No it wouldn't. A 9% tax on ~$1.1 million would break even in one year. I have a sneaking suspicion those guys make more than $1.1 million in a year, and they will probably do so for more than one year.

    • Re: (Score:3, Interesting)

      by Barsema (106323)

      While CEO of Microsoft in 2009, Ballmer earned a total compensation of $1,276,627

      so that would be 5% of 300.000 = 15000 dollar + 9% of 776627 = 69896 making a total of 76779 in taxes, so he would more than recoup his 100.000 in less than 2 years....

      and of course in relation to his fortune of roughly 14.5 billion the 100.000 is peanuts but so is the tax....

      • by c++0xFF (1758032) on Tuesday September 21, 2010 @12:51PM (#33652180)

        Assuming your math holds, that makes this an incredible investment. Where else can you put your money that will break even in 2 years, especially in this economy?

        No wonder the rich dump so much money into politics. It's probably the best investment they've ever made, collectively.

  • Seattle COL (Score:2, Insightful)

    by mark72005 (1233572)
    If you live in the metro, own a home, and your wife stays at home with the kids - making $200,000 hardly qualifies you as "rich". Especially if you are a small business owner.

    But then again, the government will stop at nothing to take all the money it can away from the people and organizations who create jobs.
    • Re:Seattle COL (Score:5, Informative)

      by SirGeek (120712) <sirgeek-slashdotNO@SPAMmrsucko.org> on Tuesday September 21, 2010 @10:26AM (#33649520) Homepage

      If you live in the metro, own a home, and your wife stays at home with the kids - making $200,000 hardly qualifies you as "rich". Especially if you are a small business owner.

      From the Summary:

      (cutoffs are doubled for joint returns).

      The way I take this is they'd have to make 400K before they hit the tax.

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        If you live in the metro, own a home, and your wife stays at home with the kids - making $200,000 hardly qualifies you as "rich". Especially if you are a small business owner.

        From the Summary:

        (cutoffs are doubled for joint returns).

        The way I take this is they'd have to make 400K before they hit the tax.

        Also note that the small business owner doesn't pay himself a $400k+ salary, he pays himself $30k-$100k or so and reinvests the rest in the business, hiring workers and increasing the value of his assets (the business) - which lets him sell it for a profit and pay just 15% capital gains tax and 0 income tax on those gains. His car? Company property, he pays no personal tax on it it - ditto for the insurance on that vehicle. Don't you wish you could deduct the cost of your car insurance too? Ditto for medica

      • Re: (Score:3, Insightful)

        by nine-times (778537)

        I also have to say, $200,000/year might not qualify you as "rich", but it sure as shit doesn't qualify you as "poor". If you make $250k, then you have to be $2.5k in taxes. I think you can afford it.

    • Re:Seattle COL (Score:4, Insightful)

      by killmenow (184444) on Tuesday September 21, 2010 @10:30AM (#33649610)
      Except that if you're married and she stays at home and you file jointly the cut off is $400,000. Personally, paying 5% state income tax on the portion of my household income that exceeds $400,000 sounds like a good problem to have.
    • Re:Seattle COL (Score:5, Insightful)

      by AnonymousClown (1788472) on Tuesday September 21, 2010 @10:31AM (#33649646)
      Speaking of creating jobs, what's taking them so long? Unemployment is just hanging there at 9.5+% and yet corporate profits are have surged [businessweek.com]

      Oops, my bad, they're creating the jobs overseas. I correct myself.

    • Re: (Score:2, Informative)

      by mjwalshe (1680392)
      $200,000 is 10 times the median salary of $21,587 for the USA so stop whineing about making 10 times more than the average Joe does
  • I would imagine I'd be too busy swimming in pools full of ultra rare money bills and antique coins to care that someone wanted a cut of my 500 million a year salary.
     
    Seriously, you'd think these guys would have some sort of hobbies that would be more interesting than political lobbying.

  • You're doing good in this economy, pay your fair share, you privileged prats. Or go live in India or China where you outsource all your jobs to.
  • by 140Mandak262Jamuna (970587) on Tuesday September 21, 2010 @10:31AM (#33649636) Journal
    Following the Citizens United decision of the Supreme Court, the corporations are people too with full and unmitigated free speech rights. It also ruled spending is speech. There are no disclosure laws, and next year they will make sure they will create corporations for the exclusive purpose of donating money to election campaigns. Thus you will never know who is funding what campaign, which journalists are on the pay roll of whom, which professors are writing academic papers funded by "research" dollars from those with vested interests. So it is just a blip. Next year when strange ballot initiatives come from nowhere and get enormous media play and succeed you will never know what hit you.

    BTW, if corporations are people too, then isn't stock market really buying and selling people? So owning stock of a corporation makes you a slave owner?

  • Is he even collecting one? I think all of his money is in the form of stocks and investments and he's probably already bought about anything he'll need big ticket item wise. Does this tax include capitol gains? I'll fully support a 75% tax on the rich a year after you give me $50M. I wonder what his position would have been 15 years ago.
  • Once you are wealthy an income tax doesn't matter. It's only a problem while you are trying to become wealthy. Income tax helps prevent more people from being wealthy which is why the elite wealthy like it. It's like getting the state to declare the area around your country club a state park so that nobody can build there.
  • by GayBliss (544986) on Tuesday September 21, 2010 @11:17AM (#33650586) Homepage

    In Washington state currently, people earning less than $20,000 pay 17.3% in taxes. People earning over $537,000 pay just 2.9%

    Even with this law, the richest will be paying less as a percentage of income than the poorest in the state.

    This study (pdf) [itepnet.org] gives the numbers.

    • Re: (Score:3, Insightful)

      by Chowderbags (847952)
      That reminds me a lot of how the rich are bitching about having to pay another 4% on their income taxes, despite not having to pay Social Security taxes on income over $106,800 (6.2% from you, 6.2% from the person paying you). That means that anyone in the 25% or 28% tax bracket is actually paying a higher rate of taxes than the top level. Do people not realize this? I'd be more than willing to keep the top marginal rate on income at 35% if the cap is removed on Social Security taxes.
  • by Fringe (6096) on Tuesday September 21, 2010 @11:31AM (#33650858)
    Slashdotters know a lot about technology. And apparently little about politics and how to do even a quick Google search.

    We (Washington) passed Initiative 960 a few years ago, which required a 2/3 vote to increase taxes. Two years later our Legislature simply struck out those provisions... by majority (not 2/3) vote of them, no public ballot.

    The income tax initiative would enable an income tax and limit it to the very rich, but only for two years. Then the tax-hungry reps would almost certainly again overturn the voters and lower the rates by simple majority. They cannot put an income tax in, due to our Constitution, but if WE put one in, they can subvert it in two years.

    For once, the rich are fighting for all of us.

  • I'm opposed to 1098 (Score:3, Interesting)

    by breser (16790) on Tuesday September 21, 2010 @11:31AM (#33650860) Homepage

    I'm not making enough money to have to pay this tax, I live in Washington State and I'm opposed to this. Why? Washington State has no income tax at all right now. Unless you require everyone to file you will have low compliance.

    This initiative may be cost neutral by getting rid of the Washington Business and Occupation tax, which means the resources directed toward that can be used for processing the income tax returns. It does not require that all citizens file. Instead it only requires those that would actually have to pay the tax to file.

    I think it's clear where this is going. The state will end up generating less revenue than expected due to this non-compliance. It will then either have to raise the tax or extend the filing requirement to more people to identify the people who are not complying.

    Finally, it is very likely that this income tax will expand beyond the limits that it has now, either by no action on the part of the legislature as inflation raises the amount of money that people earn over time or by direct action of the legislature to raise more funds.

    Rather, as a former business owner in this state and a citizen I support the state simply effectively enforcing the Business and Occupation taxes we have now. Microsoft has been avoiding paying this tax on a huge proportion of their revenue by running the revenue through an office in Nevada. I'm sure there are other companies in the area that have been evading this tax.

    If the state is unable to force a large and very well known tax evader to comply with tax law, it's unlikely that they'll be able to force a large number of individuals to comply when they don't even have the information to determine who they are.

  • by deepthoughtless (1264016) on Tuesday September 21, 2010 @12:15PM (#33651650)
    I live in Seattle, which has a sales tax of about 10%. That tax system is unbalanced, as it causes the people who make the least amount of money to pay the highest proportion of their income.

    Assuming that the lower class spends more or less all of what it makes, that sets up a good 10% tax on total income (more if they borrow; statistics show that on average, Americans spend more than they earn), whereas someone in the proposed income tax bracket of $200,000+ spends closer to 1-2% of total income on sales taxes. So there's a 10% tax on the $20,000-homeless crowd, and a 1-2% tax on the most well-to-do. Applying a 9% income tax to the upper bracket at least gets it close to an even 10% across the board.

    But I'm playing devil's advocate here. I can't in good conscience support what amounts to a special tax on a minority group, even if that group is better off than I. Skipping the sales tax altogether and just putting a flat 10% income tax across the board would be the most appropriate, I think.
  • by FoolishOwl (1698506) on Tuesday September 21, 2010 @01:57PM (#33653144) Journal

    Imagine a flat tax of 10%. One person has $1 million, and pays $100,000. Another person has $100, and pays $10. Who will feel the greater loss?

  • by poet (8021) on Tuesday September 21, 2010 @03:18PM (#33654216) Homepage

    I am not rich but I do make more than 200k. You know why? I employ people and am an S-Corp. The current tax format in Washington is actually fair. I pay a % right off the top for the business. I don't pay off profit, I pay off GROSS!. An income tax on top of that would literally double my tax burden.

    That is ridiculous.

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