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Microsoft To Get $100M Annual Tax Cut and Amnesty
reifman writes "Despite a $2.8 billion deficit, Washington State's House Bill 3176 would provide Microsoft with an effective $100 million tax cut annually and possible amnesty on its $1.27 billion Nevada tax maneuverings. Under current law, all of Microsoft's worldwide licensing revenues of approximately $20.7 billion annually are taxable at .484 percent. Under the new law, only the portion of software licenses sold to Washington state customers would be taxable. Ironically, after slashing Microsoft's tax burden, HB3176 directs the Department of Revenue to crack down on 'abusive tax transactions' like those in Nevada — except for a loophole that may provide Microsoft amnesty on its twelve year practice. The bill's lead sponsor is Ross Hunter of Medina, home to Bill Gates and a number of current and former Microsoft billionaires and multi-millionaires, and other areas around Microsoft's corporate campus."
The bill's lead sponsor is Ross Hunter of Medina ...
The article's update notes:
Update: Rep. Hunter is a former Microsoft general manager.
As does his bio:
PROFESSIONAL EXPERIENCE:
I retired from Microsoft in 2000 after 17 years of service ranging from program manager for Microsoft Access to general manager of the Microsoft Commercial Internet System.
At this point apathy consumes the rage that would normally well up inside me ... Halliburten got contract after contract with a former employee as vice president of the United States ... should this sponsorship surprise me? I guess it doesn't fall under conflict of interest though a large part of me feels it should ...
My work here is dung.
every state does this to lure companies and jobs to their states. every company including Google, Apple and all the slashdot favorites take advantage of this. one reason why Silicon Valley and the movie industry are in California and don't move their industries elsewhere is because California gives out big tax breaks to tech and the movie industries. in the last few years they talked about taking them away and everyone involved told the idiot legislators that it would result in an exodus out of the state. just like the home contractors left after the idiotic workman's comp rules went into effect a few years ago.
I see the authors are using the phrase "Microsoft to get" to mean the less-common "Microsoft may get if a bill proposed by one Representative is passed by both Congressional bodies in its current form which is not going to happen."
Scintillating!
Politicians get into power by getting corporate sponsorship, once they are there they quite naturally pay back the favour. Really, the Politicians are not much more than Corporate Representatives in Government. There is the minor formality of convincing the public to vote for the company candidate but you just throw money at that and hire good advertising companies.
The US has the best politicians the corporations can buy.
Sadly up here in Canada, its no different as far as I can see. I still believe in democracy, but I am no longer sure we still have it :(
"The first time I got drunk, I got married. The second time I bought a chimpanzee, after that I stayed sober" Arian Seid
Ofcource Washington state is going to do all it can to please the biggest and most successful software company in the world. When you have a company that employs tens of thousands of higly paid engineers, you'll get special favors too. This isn't specific to MS (well only on slashdot) every large company enjoys this advantage.
Even Mozilla dodges taxes because they are a "non profit" and get PAID millions of dollars from google as part of a business deal. But I guess if you pay a tiny percentage of that money to pay for nerds to work on open source, you're immune from criticism on Slashdot.
To play devil's advocate, giving tax breaks to attract/keep major businesses is a normal thing for state governments. After all, these businesses bring in major direct (income taxes) and indrect revenue (local employees' property taxes, sales taxes etc) to the state. Nine years ago, Boeing ditched Seattle and moved to Chicago partly because of tax breaks offered by Chicago.
I can't help but notice that this article comes on the heels of the OK of corporate personhood status.
I can't find the words that compares the figures from TFA to those on everyone's recently received W2s.
Pathological kinda promises Path + Logical - but instead, you get stuck with pathetic.
Democracy is a compromise, not something that requires or benefits from belief.
"I used to believe in forcing my neighbors to do things, but then they started forcing me to do things."
Nerd rage is the funniest rage.
I mean, if the summary is right that this dude's district is chock full of Microsoft people, isn't it basically his job to propose legislation that his constituents favor?
Now, if the rest of the state's representatives actually go along with it, you have a different story.
Back in the 90's when MS was in trouble with the DOJ they had an epiphany. Hire lobbyists and donate to campaigns to get the feds off your back. It hasn't failed them since.
Perhaps if Toyota could field some candidates, or buy a few, they would get rid of their latest headache.
Except that this is WA--where there is no state income tax. So WA state isn't getting all that much from MS employees (who probably buy quite a bit online and dodge the local sales tax too).
"Doubt your doubts and believe your beliefs." -- Switchfoot, Ode to Chin
I have no problem with this. The state of Washington is not $2.8 billion in debt because corporate taxes are too low or because Microsoft makes too much money. The state government is in debt because they insist on spending vastly more money than they actually have available. The state could take every single penny MS owns and they'd soon find themselves back in the exactly the same situation, looking for someone else's money to take.
Creating a hostile environment for employers only encourages them to leave your state and set up shop somewhere else. Like another state where they're not punished for being successful.
The problem isn't whether companies will make smart business decisions (e.g. moving to friendlier tax areas), it's that this is a highly visible example of "he who has the gold makes the rules".
Everybody knows that wealthy people receive preferential treatment in our society, but nobody likes having their nose rubbed in it. A situation like this one with MS, coming at tax time, just feels like a big middle finger.
Literalism isn't a form of humor, it's you being irritating.
Individuals get taxed on their gross income so why is it so absurd that the poor starving corporations be taxed the same way? As things are now, individuals don't get to deduct anywhere near what corporations do.
Sigs are too short to say anything truly profound so read the above post instead.
You do remember that the AIG bailout happened way back in 2008... right? Obama wasn't on watch at the time, that was all Bush Jr (and the congress, mostly democrats).
If enough people do not believe the system is fair, it will end violently.
It absolutely depends on belief-- partially belief that was brainwashed into us from the time we were in 1st grade and partially belief from propaganda constantly delivered by all the media sources ( "liberal", "conservative" -- no real difference- all are owned by extremely wealthy individuals and corporations and serve the same brainwashing crap).
She was like chocolate when she drank... semi-sweet at first and then increasingly bitter.
No, but pretending that "chosen few" are not really in power is something relatively recent (18 century recent, to be exact).
Contrary to the popular belief, there indeed is no God.
You obviously know nothing about business. Taxing revenue instead of profit is idiotic; this means that a company that has a very high profit margin because their operating expenses are low has a big advantage over a company that has high operating expenses.
For instance, look at Boeing, a big WA state employer. They build big, expensive planes. These planes aren't expensive just because Boeing decides to set the price on them at $250 million. They're expensive because it costs a lot to build a big plane: parts, materials, labor, safety testing, etc. That plane might cost a quarter-billion dollars, but only a small portion of that is profit, the rest is money they have to pay out for labor expenses, for raw materials costs, for parts from their suppliers, etc. Why should they pay taxes on all of that? You get to deduct your student loan and home loan interest from your taxes, as well as other things like medical expenses, and other unavoidable things.
Whereas some company that just does, for instance, motivational speeches, is almost pure profit (except for the rent for conference rooms or wherever).
Only a moron would think it's OK to tax companies on gross income. The effect of this is that companies will do whatever they can to reduce operational expenses, including cutting labor costs, outsourcing, cheapening their parts and materials (leading to poor quality), eliminating testing (leading to people dying when airplanes crash), etc. Every decent governmental entity does not tax on expenses; in fact, companies don't even normally pay sales tax for anything which will be used for resale.
Illinois is set to become the next California. This post points out that Cali gave huge breaks to tech companies.
Giving 'tax breaks' doesn't seem to be sustainable long term for states.
Seriously, this entire state is one huge cluster fuck dictated by a single geographical area. It needs to be roped off, along with Gary, and made its own state.
They should then be required to where corporate logos on their suits just like they do in NASCAR...
Bush and Obama are exactly the same. Why people keep trying to bash the other when someone bashes one is beyond me; it's the stupid two-party mentality at work, and what's keeping any real positive change from happening. Point out how bad the current party is, and get everyone to vote for the other party, which is in reality exactly the same.
As you pointed out, the Democrats were in control of Congress during the AIG bailout. Then Obama took over, and what changed? Nothing. Continuing bailouts, continued wars, etc.
Why are we electing people who bother paying back the people that supposedly paid to put them in office?
There aren't any legal consequences if you take some election funds and then screw those people over, you just don't get reelected (or maybe you do...).
Nerd rage is the funniest rage.
That's really what people are objecting to. It's not that Microsoft is having less of its money stolen, it's that we are still having the same amount of our money stolen. Since we dare not confront the robbers, we do the second-best thing: ensure that everyone is robbed, and go after anyone who finds ways to avoid it.
Parent marries two flawed ideas that don't belong together and then somehow calls this a justification.
1. Local Government is somehow a spendthrift. This is a Sarah Palin explanation. The people with little comprehension of what their government does whip this explanation out to beat down their enemies. My civics class from grammar school taught me that local government provides public services and infrastructure. You know those awful spendthrifts just wasting our taxes on roads, and sewage systems... Let's do away with law enforcement. Courts too. People that use this kind of thinking have one goal, a return of the truck system. http://en.wikipedia.org/wiki/Truck_system
2. Parent makes the leap that a high-tax environment is somehow hostile to business. The goal of the comment is to make the Corporate Welfare State as big as possible. Shift the entire tax burden away from the corporation to the employee. (not the Owner of the business, the employee)
It is much more expensive, and almost impossible for Microsoft to leave. This is true with any giant-sized super-mega corp. facility. I'm not saying it doesn't happen. I'm saying it happens nowhere near the level of fear the remark generates. The goal behind the fear mongering is to complete the Corporate Welfare State.
http://www.maxineudall.com/2010/02/should-economists-be-sued-for-malpractice.html
Um, the parent was asking why its okay to tax people on gross income, but not companies? Either I should be taxed on Profit too, Or a company should be taxed on Gross income. Cause its just as easy to invent all sorts of crap to never have a profit. Go Google Hollywood accounting.
I mean with my income, I have to purchase a ton of expenses that eat at the total too. I have rent, food, medical care, etc. Just like Boeing has to pay for expenses to assemble their big shiny planes! And you can't get away with the "Well, they hire people and then they pay taxes" argument, cause I give income to the Landlord. I give income to Blue Cross, I provide income to farmers, sales clerks, hell, even the lady that cuts my hair. The economy is a network of economic networks..
but I guess its easier to insult their (the GP's) intelligence in the matter. Hooray, you took basic Economics in High School
What are we going to do tonight Brain?
Giving 'tax breaks' doesn't seem to be sustainable long term for states.
It's sustainable as long as the voters don't vote themselves enough "gifts" from other people's money to the point where the state can no longer afford to give tax breaks to attract business/wealthy individuals.
Unfortunately, "Take some damn responsibility for yourself" buys less votes than "I'll give you more gifts from the public treasury!"
The Tea Party should adopt a new slogan: "No representation without taxation" Honestly, if you're not paying for the government you vote for, do you deserve to influence it's direction?
If enough people do not believe the system is fair enough, it may end violently if the powers that be cannot convince a sizable proportion of the people that any any action against said powers is the act of terrorists and another sizable proportion of the people don't remain apathetic.
No, YOU are the one who is wrong. Go read that again. This is NOT an income tax! It's called a B&O tax, and it is on gross revenue, not on net profit. So your expenses are not deductible, nor depreciated assets, etc. It is a tax on the money coming in the door. Period.
The advantages of a B&O tax for the state is that it is not subject to the restrictions (including Federal) that are placed on either sales taxes or income taxes. And yes, it has been challenged in court, more than once, and it's still there.
There's this core assumption in your post that geographical areas are somehow important independent of the people that live there, that somehow a person occupying 100 square miles is more important that a person occupying 1/10th of an acre. Land without people is just land. People without land are still people.
XML causes global warming.
But class warfare is always a good way for the politicians to shirk their responsibility for the financial meltdown of WA State... Blame the MegaCorps, not the budget-busting increases we've seen over the last 5 years...
Browsing at +1 - no ACs, I ignore their posts. So refreshing!