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Keeping Microsoft Happy
Jeff writes "In Citizen Microsoft, I report on Microsoft's use of Nevada corporations to avoid approximately $327 million in Washington state taxes while telling voters they need to pay more to fund education. I also contrast Microsoft's attacks on the open source community with its in-state lobbying efforts and its recent promise to get more involved in local politics. The cover has Gates in a gorilla suit."
Seven years ago, Microsoft opened a small office in Reno, Nev., to collect the money it got from PC manufacturers that installed Windows and Office on the computers they sold. In the years since, Microsoft has sheltered more than $60 billion in royalty revenue in Nevada, a state with no corporate income tax, costing Washington an estimated $327 million in unrealized tax revenue.
That should be easy to verify, contact the SecState of Nevada
If they wanted to evade $350 million in taxes, all they had to do was threaten to leave the state. It worked for Boeing. In fairness, WA state has a very, very messed up B&O tax... In fact they maintain the most regressive tax structure in the nation.
From the article:
"Every time Microsoft hires someone in Washington, it creates 3.5 new jobs here. According to the company, Microsoft created an estimated 117,620 new jobs in Washington between 1990 and 2001. But while Microsoft promotes the positive impact of success, all this growth has placed a heavy burden on our schools, roads, and overall livability."
Wow - How could Microsoft be so insensitive as to create jobs.
However, this also raises the BS meter. I always love when I hear "We create xx jobs for every one we hire". Sounds good... but it doesn't add up. To even out, there has to be a job somewhere that causes -1.5 people to be hired. Other than the 435 CongressPricks, and the one in the Oval Office, there aren't too many jobs like that.
If you want to close these loopholes then every state needs to have consistent incorporation statutues and laws. The only companies that incorporate in their own state
Oooh! Oooh! I've got an idea, howabout we make companies incorporate in their own state?
Just to be sure, we can define "their own state" too, by making it the state the majority of their employees are in. If they're too spread out to get a majority, make it the state with the most employees.
Huh? I live in WA state and pay tax on each purchase from Amazon, regardless of where fulfillment comes from.
We already have multi-state tax codes, maybe the states should get together to work on closing the "Nevada" tax gap.
BTW, if Microsoft didnt get tax breaks here, I'm sure some other state would gladly offer it. Corporations are already playing states against each other, really shows you how much power Corporations have.
So, while there are answers, nothing will change.
Business as usual. [pun intended]
Ultimately this is a major reason I think we should move to VAT or sales taxes and just get rid of everything else. The fact is major corporations always have a cadre of lawyers to find ways around taxes. And even if they didn't, it really wouldn't matter because the government really can't tax corporations, it can only use them to help collect taxes from individuals. Whatever taxes corporations actually end up paying are just another expense and get taken care of by boosting the cost of their goods and services to cover them. The rich have very high nominal tax rates but considerably lower effective tax rates. Of course I don't actually expect sales/VAT to every become a reality. Tax prepartion and advising is a billion dollar industry. Politicians wouldn't turn their backs on millions of dollars in lobbying money, and the complexity of the tax and budget system is a main source of their power.
Vote Quimby.
Probably a more realistic system would be to require a corporation to state its "home turf" (much as a ship states its home nationality). The corporation would then have to obey the laws (including tax laws) of its home turf AS WELL AS the laws of wherever any outposts were.
So having a branch in Nevada would mean Microsoft had to pay Nevada taxes AND Washington taxes.
This isn't unusual, and is how many countries elsewhere work income tax. Those from Britain will remember the Ken Dodd trial, where the British Government successfully argued that overseas earnings - even those where he had paid tax overseas - were ALSO taxable in the UK.
Yeah, you could argue that this is unfair, but the problem is that a lot of big-name celebrities and corporations have moved to tax havens. As tax exiles, they get to keep all of their money. The consequence of that is that, in order to maintain any kind of level of service, everyone else has to pay more.
Eventually, what you end up with is the very rich being wholly and completely subsidized by the very poor. Welfare in reverse. Such a system is inherently unstable. The poor - by definition - don't have much in the way of resources, so the greater their burden, the greater the chances of the system collapsing.
Let's take an admittedly extreme example. Let's say that the economy rested virtually entirely on the shoulders of minimum wage workers. It is physically impossible to work more than 3 shifts in a day. Given all that, and given the State and Federal income taxes at that level of income, how many minimum wage workers would you need to cover the average State budget and a typical Federal budget?
If the answer exceeds the population of the US, then neither the States NOR the Federal Government can afford to support tax exiles.
(In an ironic twist, those who do live in tax exile are often the most influential in Government, inverting the age-old critisism that there should be no taxation without representation. Here, they have no taxation, but often all the representation.)
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
Sure. Maybe they owe the use tax, if Washington has a use tax, but quite frankly, how can it be enforced? I can imagine Washington being able to successfully collect use tax on new automobiles, which have to be registered with the state, but there's no way they can determine what a Washington resident bought in another state without a full-on anal probe audit. Does the California Franchise Tax Board know about the brand new Ecco europeon-size 46 boots I bought for 35 bucks on eBay from a seller back east? Nope. Maybe John Ashcroft does, but he's not telling.
144l. ph34r my 133t l3g4l 5k1lz!
There is a serious question of how to regulate companies like Microsoft when they have such concentration of wealth they can basically afford to buy congress and the leadership of major political parties. It really does sound like these companies are destroying the very people and institutions that allowed them to become successful.
Sales tax = regressive taxation = hurts the poor much more than the rich
Poor Boy buys a $20,000 car pays $1000 or 5.0% of his income.
Rich Boy buys a $60,000 car pays $3000 or 1.0% of his income.
Conservatives love this, too. When the Republicans took over the Iowa Legislature 10 years ago (and things were good) they cut income tax by 10% across the board (giving a massive break, in terms of real dollars to the rich).
Years later, when things weren't so good, they raised the state sales tax 1%, which had the same affect: hurting the poor in terms of both real dollars and % of income.
Let's clean up our existing tax laws first--eliminate the subsidy on SUVs, make it harder to create tax shelters in the Caribbean.
A speech...
it would start to pass certain powers to the Federal Govt
I guess that whole "United STATES" thing just went over your head in high school history class, eh?
There are certain areas that make sense to be centralised;
And those areas are enumerated in the Constitution. Try actually reading the document to see what they are. Pay particular attention to the 9th and 10th Amendments.
not only would it make complying with the law easier
Since law for everyone, everywhere would be set at the federal level, and local concerns would never hold any weight or water. Might as well do away with the idea of statehood altogether.
but it would save the taxpayers a lot of $$$ in not having to employ fifty sets of state legislature and bureaucracy...
Clearly you've never worked for government. The larger the bureaucracy, the more inefficient it becomes. You'd still need approximately the same amount of government, only now it'd be under control of the feds and cost much, much more to operate. Worse, that government no longer answers to the locals who pay for it.
I'll pass on your test-bed version of one-world government, thanks.
Max
My god carries a hammer. Your god died nailed to a tree. Any questions?
I was recently involved in setting up a corporation and rather than set it up in my own state, there were advantages, other than taxes, for setting it up in Nevada. You will notice, for example, that many companies are incorporated in Deleware or elsewhere, often for the better legal protection provided by that state's laws. For example, trying to sue a Nevada corporation may be more difficult than many other states.
In our case, taxes were not the intent at all. We still pay local state taxes as well, so the savings are not that significant. There is some tax savings since some of the taxes are paid to Nevada instead, but nothing significant.
Now what I do feel bad about is how some companies set up their offices offshore in places like the Caymen islands to avoid federal income taxes or other federal laws. If a US based company does this, then they should not get the benefits of being a US company. I also feel that the federal government should not be allowed to sign contracts with companies that do this. I.e. why should my tax dollars go to Haliburton when the company sets up offices (usually just a mail stop) in places like the Caymen islands or elsewhere to not only avoid paying US taxes, but to also circumvent US laws and do business in places like Iran.
This post is encrypted twice with ROT-13. Documenting or attempting to crack this encryption is illegal.
Linux also fills the niche of a half decent operating system on the cheapest hardware, which may cut the margins but I think those saying it is a threat just want to see themselves as being important and part of some movement bringing MS down. MS will bring itself down if it happens, and I don't care one way or another so long as I can use a good *nix clone on cheap, relatively powerful hardware. Linux could be better, and is becoming so - and I still see features being added to the latest breed of WinNT that were present in the version of linux I was using eight years ago.
We have to keep in mind that we use computers to run applications, so we have to run an OS that runs the applications we use. With a lot of new things being cross-platform (even compiling on a Mac) Microsoft may end up being the odd man out instead of their old role of being the only game at the cheap end of town (or think of it as T-Fords vs Bentleys). Most decent new commercial software that needs to run on a server has a web front end now anyway, so the client is cross-platform.
Ok MS is evil but to blame them on seattle's ills is obsured...you should know that the head of boing has been quoted as saying that it was easier to design and build a new boing 777 then it is to get a permit to build a house in seattle...also you should know that the seattle city commision once cast a vote to remove the dams in eastern washington...the vote passed then in relpy eastern washington counties and cities made similar resolutions to remove tha ballard locks...needless to say the locks and the dams still remain, but what this does show is the complete lack of resposibility king county and the city seattle has demonstraited in the afairs of running thier city...oh yeah did i mention the mariners stadium mess in which the mariners threated to leave unles they got a new stadium, it went to a public ballet twice which was struck down twice then going past the voters the city made it anyway but it doesn't stop there they wrote the contract so badly and ineptly that they ended up being sued by the mariners....so much for the democrates who run seattle being democratic.
this new article by the seattle weekly is just another atempt by the inept local media to blame the city's problems on outside forces instead of its inept government.
Seattle's problems are becouse of its government who choose to focus on dams, baseball stadiums, and MS rather then cutting waste and taxes, fixing pot holes and implementing sane land planning that encurages development rather then scares it away.
I left seattle 4 years ago becouse it was unlivable...and i see no reason to move back.
stendec@gmail.com
What's despicable about it? Why should I not decry behavior I think is wrong?
I'll tell YOU what's despicable. Having the audacity to tell the State of Washington how to spend tax dollars, knowing full well that every state in the Union is strapped for cash. The audacity part comes in when you realize that Microsoft doesn't even PAY any taxes.
Want the situation to get better? Start destroying these megalith corporations that flaunt the law. Put commerce back in the hands of the people that really run this country's economy: Small businesses.
Why yes, I AM a rocket scientist!
The Demise of Microsoft
In the long saga of the battle between the world and its detested adversary,
the Microsoft corporation, everybody is dying to see how the movie end.
Everybody also knows that in the movie the antagonist always dies at the end,
but the question is how? To most who detest Microsoft vehemently they would
like to see a quick and horrid death and those who detest even more so would
only find a sadistic pleasure in seeing nothing less than having Microsoft being
slowly skinned alive on a burning stake.
An IT Fairy Tale
Once upon the time, there was a computer software company named Microsoft,
whose craftiness in marketing made it become one of the most popular software company
on the planet. However, once that company attained its dominant position
in the marketplace, greed and fear filled the unsettled soul of Microsoft.
The company then aggressively pursued and eliminated almost all of its contenders,
names that once were legends one by one fell to Microsoft's sword, WordPerfect,
Borland, Novell, Netscape, Corel and more. Soon, people saw Microsoft for what
it was, a cunning roguish company that had no conscience to stop itself doing whatever
it needs to achieve its ambitions. All the other software companies
realized that there will be no end to Microsoft's unquenchable thirst for power but
none dared to challenge Microsoft until one day a young knight developed an operating
system called Linux. Linux came with a license called Open Source, which represented
to all the other companies a platform from which they can rally together in a
silent treaty to overthrow the software tyrant. One day, Microsoft woke up
and saw a huge army amassed upon the hills, companies that once were shot, wounded,
cheated and humiliated now all carry the same banner, the flag of Linux. Amongst
the valiant warriors, were IBM, Novell, Sun, Oracle, Sony, Fujitsu, Red Hat and CA and
amongst the catapults and shields they used were forged from the power of Open Source,
Apache, OpenOffice, Mozilla, PosgreSQL, MySql, Python, PHP, Samba and much
more. What Microsoft saw shook its heart, however its power to control the market
is still immense and with 56 billion dollars in the vault, its going to put up a very
good fight. This is the year 2004 and the battle has just begun.
The Crystal Ball
So my young seer, you wish to see how this battle unfold? First, you have to understand
how unlike previous battles where the companies were easily and ruthlessly cut down
by Microsoft, this time the catapults and shields that the Allies formed from Open Source
were impenetrable, in fact, the more Microsoft attacked the slowly advancing catapults and
shields,
the stronger the catapults and shields became. How can that be? The magic of Open Source.
All artifacts created from Open Source do not obey the laws of the jungle, first of all
artifacts are immortalized by having the source code freely distributed across the
earth, as Microsoft attacks one point more heads would sprout from different places.
Another power of Open Source is leverage, in the old times when a developer was to
write a software, he practically has to write most of the libraries himself/herself or
purchase or license expensive code sets from other companies like Microsoft. Nowadays,
these libraries are all available freely from Open Source, graphics libraries,
network libraries, XML libraries, parsers, compilers, were all there for all to share.
This is the leverage that hasn't been available to developers before, now all the
Davids have slingshots.
Rebellion of the Serfs
Back to that same once ancient period, almost all developers lived under the direction and
command of Microsoft. Their blind obedience contributed immensely to
the growth of Microsoft. They created applications of all sorts of shapes
and sizes which made the Microsoft platform very popular. All these t
If given a choice, I would take Bill Gates over Steve Jobs anyday. Ever watch that TV special with those two in the 80s. Gates was a complete geek, but Jobs was a geek with serious attitude problems toward his own engineers.
They portrayed him as this abusive chief with absolutely zero respect toward everyone who worked for him. Ego trip every day and made his engineers pushed to an unhealthy limit.
Bill Gates made bad software acceptable in the market. Steve Jobs would have made bad corporate culture acceptable.
But as you say, they are doing what a corporation is supposed to do - make money. Any company's ultimate goal is making money. After all, the company is not any good when it stops doing that (something akin to stopping eating). A company that stops focusing on making money will cease to be a company pretty soon.
Why does that fucking surprise you? This part:
I see that as the whole plan from day one. MS software appears to be designed to be just good enough to do the job and run on machines just good enough to keep ticking over while running the software.
How many companies whose entire focus is on making good software survive? NaN is gone. Um, let's see. SCO (the old one) is gone. Hmmmm, so many, I don't even know where to begin. Loki? Who else.....
The fact is, if you want to make money, you have to focus on making money. The other things you do need to be consistent with the goal of making money. Anything not consistent with that goal is going to be an expenditure of resources that will hurt your ability to make money.
Microsoft has many faults, and the fact that they've built such a shitty product is one of them, but the fact that they've focused on making money is *not* one of them. There are many ways to accomplish the goal of making money, some of them are "good" and some of them are "bad" and some are pure unadulterated evil.
As people who spend money in this economy and who theoretically elect our government we should be focused on guiding companies to making money by doing "good" things and punishing or obliterating them for doing "bad" things. But we should never, ever try to stop them from making money, because making money is critical to our economy. It's what defines capitalism.
You don't want capitalism? I'm willing to entertain alternatives that aren't totalitarian in nature.
Like what I said? You might like my music
"Bill Gates made bad software acceptable in the market. Steve Jobs would have made bad corporate culture acceptable."
Does "Bad corporate culture" include illegal abuse of a monopoly position? Does it perhaps include falsifying evidence in a court of law? How about astroturfing? How about all the other crap that Microsoft pulled off?
Plus, bad software thrown into the bargin!
Sorry, HOW exactly would Steve Jobs be better?