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."

Comments

Bill's Sponsor Also Ex-Microsoft Employee

[eldavojohn]

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 ...

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Anonymous Coward]

As a Washington state resident who also considers the amount of the state's budget deficit, I can't figure out how even a representative with MS ties could figure that this move should be viewed favorably. Let's shoot this down folks.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Cryacin]

There's so much back scratching going on here that these guys must sleep on their stomach. I'm sick to mine.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[rtfa-troll]

X: They are shooting little children.
Y: So what? Under the last administration they shot little children too.
X: oh; that's okay then. Sorry I mentioned it.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Attila Dimedici]

The poster I replied to was clearly implying that Haliburton got their contracts during the Bush Administration because Dick Cheney used to work for them. However, Haliburton was getting the same type of contracts before Dick Cheney was Vice President, so I was pointing out that his case was not made.
It is important when trying to fight government corruption (or other wrong doing by the powerful) to clearly make one's case and to not get sucked into edge cases that have an appearance of serving a partisan agenda. This is because there are many who will use corruption fighters for partisan advantage and then promptly abandon the cause when their group is in power.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Anonymous Coward]

I don't get why people don't understand that corporations don't pay taxes. Taxes are just another expense that gets added into the final price of the product. It doesn't matter that they actually write the check, you pay Microsoft's corporate taxes every time you buy one of their products. We should eliminate them entirely. Nearly every company in the world would want to be headquartered in the US if we had no corporate taxes, imagine how many jobs that would create. The end result would be a wash for the average United States citizen, prices would drop across the board, but we could add in a federal sales tax to make up for the revenue shortfall and our goods would be competitive in the world market again.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[stephanruby]

However, Haliburton was getting the same type of contracts before Dick Cheney was Vice President, so I was pointing out that his case was not made.

Yes, but they were not getting no-bid contracts under Clinton. In my opinion, that's a huge significant difference.

Not that Clinton doesn't help his own friends out, he does too. Cronyism does run rampant in both parties.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Alex Belits]

I don't get why people don't understand that corporations don't pay taxes. Taxes are just another expense that gets added into the final price of the product. It doesn't matter that they actually write the check, you pay Microsoft's corporate taxes every time you buy one of their products.

Product prices will be the highest the market can bear, regardless of expenses. Software already has massive profit margins, so taxes merely eat into those profits, thus depriving the company from money they can use to buy other companies, run ad campaigns, pay bribes and manipulate market in other ways.

We should eliminate them entirely. Nearly every company in the world would want to be headquartered in the US if we had no corporate taxes, imagine how many jobs that would create.

Corporate headquarters are only considered useful for locals because THEY PAY TAXES. The local employment they provide mostly consists of secretaries and janitors.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[fuzzyfuzzyfungus]

It's simple, really: Corporations pay taxes because, legally, they are distinct entities carrying on whatever their business is. That is the basis on which the "limited liability" thing hangs.

If corporate taxes were such a crushing burden, you'd see a lot fewer LLCs. Apparently, though, limited liability is quite valuable.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Duradin]

X:How can you shoot women and children?
AM:It's easy. You just don't lead them as much.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[iluvcapra]

Regardless of how you may feel about taxes, it really isn't at issue. Here we have a company breaking the law, and using its influence to avoid the consequences, and to seek special treatment under the law.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[iccaros]

ahhh.. no Halliburton Received No-Bid Contracts During Clinton Administration For Work In Bosnia And Kosovo. “Halliburton has also gotten some no-bid jobs in Iraq, just as it did in Bosnia and Kosovo in the 1990s, and for the same reason: Not a lot of other firms have similar expertise in supplying the U.S. military, and with a war on there’s no time to stage a lengthy bidding process.” (Max Boot, Op-Ed, “Don’t Blame Halliburton,” Los Angeles Times, 4/22/04) During Clinton Administration, Halliburton Received $2.2 Billion From US Government For Work In Kosovo. “Between 1995 and 2000, while Democrat Bill Clinton ran the country and Republican Dick Cheney ran Halliburton, there was no talk of favoritism or political ties as the Houston-based company billed the government $2.2 billion for its work in Kosovo.” (James Rosen, “Is Iraq’s Reconstruction Rigged?” The [Raleigh] News & Observer, 10/5/03) Halliburton’s Performance Praised By Former Vice President Al Gore’s “National Performance Review.” “[V]ice President Al Gore’s National Performance Review mentioned Halliburton’s performance in its Report on Reinventing the Department of Defense, issued in September 1996. In a section titled ‘Outsourcing of Logistics Allows Combat Troops to Stick to Basics,’ Gore’s reinventing-government team favorably mentioned LOGCAP, the cost-plus-award system, and Brown & Root, which the report said provided ‘basic life support services – food, water, sanitation, shelter, and laundry; and the full realm of logistics services – transportation, electrical, hazardous materials collection and disposal, fuel delivery, airfield and seaport operations, and road maintenance.’” (Byron York, “All Smoke, No Fire: The Administration’s Critics Are Wrong,” National Review, 7/14/03)

Re:Bill's Sponsor Also Ex-Microsoft Employee

[AvitarX]

Wouldn't it be great for residents of WA state, if they could stealthily raise taxes on the entire world though?

Also, I don't entirely buy that a tax increase on a monopoly would inherently increase the price of their product correspondingly.

And MS has a monopoly (protected and enforced with tax money) on selling MS software. That monopoly is was keeps the price over a few USD a copy.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[ElectricTurtle]

That explains why MS software is so sub-par and MS advertising is so laughably terrible... it's all being written and designed by secretaries and janitors...

Re:Bill's Sponsor Also Ex-Microsoft Employee

[gethoht]

Clinton also didn't start a war in Iraq making for oodles more (bid or no-bid) contracts. So you sir... Try again

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Jane Q. Public]

If the tax rate on their revenue is 0.484%, as OP states, that is hardly an amount that will affect Microsoft very much, or increase their prices very much. Figure it out yourself: what is 0.484% of the price of any Microsoft product you bought lately?

Any tax breaks for large corporations at a time when they are proposing to increase taxes on citizens is unconscionable. Hunter should be ashamed.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[hedwards]

One of our chief problems here in Washington is that we don't have any personal income tax at all. Meaning that right now to make up our budget deficit we're left with far less appetizing choices. We can increase sales tax, B&O tax, property tax, gas tax and that's about it. All of those are more damaging to the state economy in the current recession than a minor bump to the income tax would be. But the residents of that state, myself included, are very much concerned that we'll end up with our current tax burden plus an income tax. Trying to figure out how to give us an income tax to replace some of the other taxes is a really tough problem as people on both sides of the aisle are pretty skeptical that it would be a replacement rather than add on tax.

An increase to income tax is dollar for dollar more effective at raising revenue than raising the taxes that we have available. Plus you get a subsidy from the federal government that we don't really get. Technically we do often get a sales tax write off, but it sucks and is a serious pain in the ass to actually get back as you have to do a lot of paper work to substantiate for it.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Jane Q. Public]

"One is the fact that Washington cannot really tax an entity based on business practices outside the state."

That is complete nonsense. If their primary base is in Washington State (it is), the state has every legal right to tax them on their total revenue (known in Washington as the "B&O tax"). This tax has been active in Washington for many years now. If it were illegal, someone would have challenged it long since. (Actually it has been challenged, and it's still there.) If you think they "cannot really" do that, I suggest you talk with a Washington State tax attorney and find out why you are wrong. Here are some hints:

"The constitution forbids it unless congress agrees to allow it."

Again, complete nonsense. What is prohibited by the Constitution is charging sales tax for sales in other states. The B&O tax is neither a sales tax or an income tax.

Also, Washington State probably would NOT lose if that were taken to court, because again B&O is not a sales tax, and Microsoft's primary base of operations is in Washington State, regardless of where they are incorporated. The B&O tax is not an income tax either. You are mixing apples and oranges.

"It's sad when government is in a weak bargaining position against a gigantic corporation..."

That may be so, but that is not the case here. Corporations (including some large corporations) have already challenged in courts, and the B&O tax has been upheld. It is not bound by the laws regarding either income or sales taxes, since it is neither. I strongly suggest you do a little research about the subject before expounding on it so "authoritatively". It is obvious that you know very little about the real situation.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[ClosedSource]

"I don't get why people don't understand that corporations don't pay taxes."

That's why corporations never lobby against corporate tax increases .. oh wait.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[bondsbw]

Product prices will be the highest the market can bear, regardless of expenses. Software already has massive profit margins, so taxes merely eat into those profits, thus depriving the company from money they can use to buy other companies, run ad campaigns, pay bribes and manipulate market in other ways.

Which costs more, $9.99 worth of gas, or a video game priced at $9.99 on the shelf? The video game, of course, because tax is included in the price of gas but not the price of software. You're not wrong, but perception is key. There's a reason that game doesn't cost $10.00; it's the same reason that $999 is a magical price point for many desktop/notebook makers.

Let's go to a different world for a minute, where all sales prices include tax... do you think a laptop would still go for $1078? Probably not. Maybe $1049, but $999 would draw enough attention to be worth the loss of some per-unit profit. In either case, there is an overall loss of some profit.

So, taxes really don't eat into profits as much as you seem to suggest by asserting that the corporations directly pay them. In other words, the market can "bear" the taxes a little more simply because perception of the pricing structure tends to pass more of that burden on to the naive consumer.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[mysidia]

Your argument is basically a fallacy. Without any basis whatsoever, you've magically created some sort of line between a software company's tax rate, and the consumer price of goods.

The consumer price of goods isn't based directly on taxes MS pays though, it's based on what the consumer is willing to pay, and what the demand is for the product. Software publishers charge the highest price the market will bear within their desired sales volume (i.e. number units available) in order to maximize their profit.

The great thing about software is the costs to produce are very very low (on average) per unit, and the profits are extremely high. But to get those extreme profits, they are already charging as much for it as they felt they could charge, and increased costs do not change the retail price. Only changes in pricing pressure do that.

Here's the thing... since they are taxes they haven't already paid.. charging them now doesn't retroactively increase the price of already-purchased copies of Windows.

Also, due to competitive pressures in the marketplace, Microsoft can't simply raise the prices of their existing products. They would kill Windows 7 if they decided to raise the OEM price to $300 for Home Premium.

They can't increase the price in the past, so there's only one thing that can give their past profits get reduced.

This reduces the value of their company, and works against developing new products in as cost-effective a way, but it doesn't make the old products more expensive in practice.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[mysidia]

Actually.. I think it's being designed by secretaries, and written by armies of trained monkeys.

Which explains the bugs.

The janitorial work was outsourced to a contracter that is (secretly) owned by a competitor, a long time ago.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Anonymous Coward]

Oh you silly billy if high tech corporations moved to where taxes are lower Apple would be in Mississippi and Google would be in New Hampshire. Instead these companies need intellectual talent which is drawn by the availability of educational, cultural, medical, etc. infrastructure supported by high taxes. This is yet another case of the law of unexpected consequences, lower taxes saps the infrastructure which ultimately decreases the quality of the available labor pool.
In my view corporations have a duty to maximize profits for their owners but governments have a duty of build a civilization. Too often politicians forget this.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[demonlapin]

It's a pretty ridiculous tax that claims that all income that Microsoft earns is Washington income. (It's on par with the US government's claim that all money earned by US citizen is taxable, no matter where earned.) But yeah, other than that, you're right.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[demonlapin]

There's no reason that Microsoft has to have its headquarters in Washington, and I imagine that they have enough money to fund a bevy of extraordinarily intelligent lawyers for an indefinitely long period of time. Therefore, they do have the option of moving the corporate operations elsewhere while keeping development in WA, and expending a great deal of court time to make sure that the income doesn't occur anywhere in WA. This is not without cost, but corporations can do extremely expensive things when doing so will save truly staggering amounts of money.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[Toonol]

Troll? That's correct.

For the cost of the stimulus package, personal and corporate income tax could have been HALVED for three years. That would have actually worked to help the economy; but it doesn't give the state power, so it wasn't an option.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[ahabswhale]

Ffs, they are paying pennies on the dollar for the taxes that ANYONE else would be paying. Cry me a fucking river. They'll get my sympathy when the government offers me the same deal.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[ahabswhale]

"Actually, the SS program is _not allowed_ to build up coffers... by design (IIRC)."
Actually, that's incorrect. Although I will agree with you that its coffers are barren "by design". :)

"So that's why I give the example of me investing my own money in government bonds: More return AND more security."

I can assure you that if they can't afford to pay SS, they won't pay your bonds either. You might get more return on your bonds but US government bonds have a very, very low return. The ONLY reason people buy them is that they are safe -- never for their return.

"Come up with a real argument based on fact rather than partisan buzzwords."
I wasn't trying to hit you with "partisan buzzwords". Most people don't realize the state of things at the time. It's a fact. Research it because it's a very interesting period in history.

"But, honestly, the role of government is not to take care of you (other than for thing such as the common defense). The best government is one that gets the hell out of your way and lets you take care of yourself... or fall on your ass if you fail to do so."

I use to believe as you do. Truely. In a perfect world, that's how it should go but unfortunately most people are too fucking stupid to take proper care of themselves or their finances. Without SS, you would have shitloads of old homeless people all over the fucking place (like we did in the 30's) and people live to a very old age these days so it would be even worse. People don't like to see homeless all over their neighborhoods. SS is a reasonable compromise between homeless everywhere and a total nanny state. Ideal worlds just don't exist my friend. You have to forget ideologies and do what's practical.

Re:Bill's Sponsor Also Ex-Microsoft Employee

[boxwood]

Remember when the government had to spend a trillion dollars bailing out corporations because they completely screwed up the financial sector?

Here's a tip for you: There are only so many good investments out there. When there is too much money in the hands of the corporations they run out of good things to invest in. But they have all this money laying around so they start investing in things they shouldn't. And when those investments fail, what inevitably happens? See 1929 and 2009.

Learn some basic economics, son. Cutting taxes in a bad economy doesn't help. Wow I paid less taxes this year, what do I do with it? The economy is bad right now so I better not spend it, I'll save it just in case. So you've just given more money to the bankers who have already proven themselves to be completely incompetent. Good job there buddy.

Stimulus is required because the government is the only player that is willing to spend as opposed to saving money in a bad economy. Corporations don't spend in a bad economy. Individuals don't spend in a bad economy. Only government is above the individual microeconomic decisions and is capable of making decisions on a macroeconomic level. More spending improves the economy. When the economy is good everyone is willing to spend, so the government can cut taxes, pay off debt, or whatever it wants. But when the economy is bad no one except the government is willing to spend.

Think of it like building a fire. Cutting taxes is like putting more wood on the fire. Stimulus is like throwing on some kerosene and lighting a match. When the fire is going good, throwing a couple of more logs on it helps. When the fire is out throwing more logs on it doesn't help. It just makes a higher log pile, and if yo keep throwing more logs onto it, it gets too high it falls over.

The best government

[Anonymous Coward]

Our system of government may not be the best, but it's the best that money can buy!

I can understand these being sponsored but..

[Maxo-Texas]

the obscene things is that the reason these get passed is that every other member of congress gets the same or better for their wealthy constituents.

every state does this?

[alen]

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.

Re:every state does this?

[Rich0]

Ok, I can get how tech companies can relocate if they don't like your local taxes, but home contractors?

If you want a home built in California, you're going to have to have somebody do the work under California law. So, how would home contractors have any leverage, unless CA wanted to impose regulations on their activities out-of-state?

Sure, maybe some would choose not to do business there any longer, but I doubt that in a recession that anybody is going to have trouble finding somebody to take their money to build a house.

Re:every state does this?

[Concerned Onlooker]

"Ok, I can get how tech companies can relocate if they don't like your local taxes, but home contractors?"

Absolutely this can happen. I contracted to have a house built for me on the west side of Los Angeles and in the middle of it all my contractor just up and moved out of the state. But really, it hasn't been a problem. Except that my house ended up in Iowa.

just a proposal

[SoupGuru]

Has this been voted into law as the summary and title suggests?

Or is this a proposal that us Washingtonians get a chance to contact our representatives about and make sure they understand how important it is to us?

I like representative democracy. It sometimes works.

Re:just a proposal

[Jeng]

http://apps.leg.wa.gov/billinfo/summary.aspx?bill=3176&year=2009

Doesn't look like its passed yet.

I don't see what the trouble is...

[calmofthestorm]

I have no objection to the government taxing my income at 0.484%

Re:I don't see what the trouble is...

[thatseattleguy]

True...but just to be clear (and I speak as someone who owns a business in Washington), the specific tax in question is the state "Business and Occupation" tax, which (for manufacturing activities, at least) is a tax levied at .484% of the gross revenue of the business - not the net income, not the net profit, but the gross total of checks that came in the door . Yes, it's pretty bizarro, but then without a state personal or corporate income tax, they do what they can to keep the lights on in the Capital Building.

All by way of saying that .484% adds up to a pretty tidy sum when levied on Microsoft's gross licensing revenue, worldwide.

/tsg/

Re:I don't see what the trouble is...

[wizardforce]

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.

Re:I don't see what the trouble is...

[Grishnakh]

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.

Re:I don't see what the trouble is...

[QuantumRiff]

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

Re:I don't see what the trouble is...

[JustAClam]

Grishnakh, I know something about business. I worked for Boeing for 11 years. And I had software development and contracting businesses in Washington for 6 years. You would think that what you're saying would be true, but it didn't seem like it in Washington. You see, Washington doesn't have an income tax on corporations OR individuals. They have sales taxes, but not that much more than Oregon and certainly less than California. They have property taxes too, but lots less than in Texas or California. The thing you didn't mention about profit taxes is what a windfalll it is for accountants who get to classify this or that boondoggle as "expenses". A gross revenue tax at a reasonable rate is simple (although there are some deductions) and it works for Washington. Are you really arguing for more dependence on the U.S. Federal Tax Code? Most states piggyback of the feds and then make their own modifications. Have you ever (if you had a business, owned business property or sold investments) been absolutely positive that your federal income tax return was absolutely correct? If so, you're in the minority. Look at the size of the section for accountants in the Yellow Pages for proof.

You obviously know nothing about Washington's B&O Tax. The rate is different BY INDUSTRY. You pay a different rate if you create software than if you build airplanes and yet another rate if you grow lentils or make wine. And if you don't think Boeing has influence on the rate it pays, you're smoking something. Here is a list of the rates: http://dor.wa.gov/Content/FindTaxesAndRates/BAndOTax/BandOrates.aspx. Please notice the manufacturing rate of .00484 and the "Manufacturing of Commercial Airplanes, Components, or Aerospace Tooling" rate of .002904. In the list, I count 4 classifications specific to Boeing business and 1 specific to PACCAR (Kenworth, Peterbuilt, etc).

"To get"?

[sys.stdout.write]

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!

Re:Hardly Surprising

[Phrogman]

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 :(

Hasn't passed yet

[Jeng]

http://apps.leg.wa.gov/billinfo/summary.aspx?bill=3176&year=2009

Alot of stupid bills get submitted, luckily most don't get passed.

If this one gets enough notice perhaps the bill will be killed.

Its welfare

[ldconfig]

I can not goto a store like best buy and buy a PC without paying the microsoft tax yet microsoft gets out of paying their fair share. (Before anyone wants to accuse me of running a stolen copy of windows we are a 110% Linux household)

Re:The other side

[prakslash]

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.

Corporations are people

[earlymon]

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.

Re:Hardly Surprising

[maxume]

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."

No Income taxes

[Anonymous Coward]

There are no Income Taxes in Washington State.

http://en.wikipedia.org/wiki/File:Map_of_USA_highlighting_states_with_no_income_tax_on_wages.svg

This really doesn't horrify me that much.

[Mongoose Disciple]

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.

Maybe Toyota should take a cue

[eparker05]

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.

Re:Microsoft has a say

[Kostya]

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).

Geese and golden eggs

[5KVGhost]

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.

Re:Geese and golden eggs

[earlymon]

I have no problem with this.

OK - so Microsoft employs how many people in Washington?

Around 40,000, as I recall. Let's give about 30,000 as the number of children and another 20,000 for spouses and significant others. Let's devote around 1300 teachers for those kids, and about 400 administrators for those teachers (up to the state level, and I think I'm being conservative). Let's factor in the infrastructure businesses that exist in Washington whose entire existence is centered around Microsoft.

So, between the load on the roads, the educational system, firefighters, police and other essential services, you're entirely satisfied that Microsoft is giving at least as much as it takes from your state? And that the rank and file employee state taxes fairly offset those for the MS cream of the crop?

You live in Washington, have considered these factors, and still believe that Microsoft is a good corporate neighbor?

Re:Geese and golden eggs

[earlymon]

Oh I see. Government financial mismanagement, corruption and ineptitude is actually the CITIZEN's fault, not the fault of the people actually doing the financial mismanagement, corruption and ineptitude. I get it now.

I'm happy to have given this simple civics lesson - when citizens don't vote, they get what's coming to them.

Please remove yourself from the population so that you can do your part to help curb the deficit!

The times I consider removing myself from the population is more centered around having to live in a world with assholes like you.

Re:Geese and golden eggs

[sparky555]

I have no problem with this.

OK - so Microsoft employs how many people in Washington?

Around 40,000, as I recall. Let's give about 30,000 as the number of children and another 20,000 for spouses and significant others. Let's devote around 1300 teachers for those kids, and about 400 administrators for those teachers (up to the state level, and I think I'm being conservative). Let's factor in the infrastructure businesses that exist in Washington whose entire existence is centered around Microsoft.

So, between the load on the roads, the educational system, firefighters, police and other essential services, you're entirely satisfied that Microsoft is giving at least as much as it takes from your state? And that the rank and file employee state taxes fairly offset those for the MS cream of the crop?

You live in Washington, have considered these factors, and still believe that Microsoft is a good corporate neighbor?

Okay, so I'm a Microsoft employee, so factor that in however you want. I'm also a citizen of Washington, and it seems like your argument ignores that. I pay 9.5% sales tax on everything I buy, I sort of pay property taxes (I pay apartment rent, but the landlord takes some of my money and pays property taxes). I pay gas taxes, I pay to register my car, I pay stupidly high liquor taxes. There's no state income tax, so I don't pay that, but a lot of Microsoft employees have pretty expensive houses, so they pay a ton in property tax. Sure, there are more/bigger roads in Redmond than would exist without Microsoft, but as a citizen those are the roads that are most useful to me - isn't that why I pay my gas & vehicle registration taxes?

I don't know anything about this specific tax, and don't want to comment on it. But I'm always confused when I see the argument that Microsoft takes from the state, and that we'd be better off without it. I spend a lot of money in the local economy, pay quite a bit in taxes, etc. If Microsoft left, it'd be a disaster for the economy on the Eastside, and probably all of Seattle.

Your argument about the roads, schools, firefights, police, etc. just doesn't make much sense to me. Microsoft employees are citizens like any other (but since they tend to be pretty well paid, they're going to pay more in taxes), so of course they're going to use state/local resources. I am going to live somewhere, and I'll need roads, firefighters, police, etc, so some state and local government is going to tax me and be responsible for providing those services - because Microsoft employs me here, it's Washington/King Co./Redmond. I don't use the schools, I don't cause a burden to the police, I don't get any assistance from the state. I use the roads, parks and libraries. Like a lot of Microsoft employees, I'm young and have no kids, so I'm not using the schools, but I'm paying for them. I have to think that I pay way more into the system than I get out of it. That's fine, but if Microsoft left I'd probably leave too (I'm not a native Washingtonian, and can't imagine I would have moved to Seattle if not for this job), and from the perspective of state finances I think that'd be a loss for Washington.

Maybe we should kick all employers out of the state. If no one lived here, we wouldn't need any schools/police/firefighters/roads at all. The state budget problems would be solved!

Re:Geese and golden eggs

[earlymon]

Your distaste for corporations and Microsoft in particular have blinded you...

Fuck off.

You've clearly read nothing of the rest of this exchange. Nowhere did I accuse of Microsoft of not contributing, I simply asked if Microsoft had sufficiently.

My distaste for corporations and Microsoft - especially as an economic powerhouse - is entirely non-existent.

You want a soft target to peddle your superiority, pick somewhere else.

Did I mention: fuck off.

Re:Geese and golden eggs

[earlymon]

Please explain your rationale? Considering the sample size of a vote, it's fair to say that the proportion of votes is going to be similar no matter how many voters you pull at random out of the total. If there were more voters, the election result would probably be the same to within a few decimal places.

Rationale is simple - voter abstinence is a symptom of voter apathy and apathy is a symptom of political ignorance.

Your argument is cogent and correct if the assumption holds true that with higher voter turnout, there would be no change in that ignorance.

I would argue that higher turnout would be a symptom contrary to apathy.

Today, people look at shenanigans and say, in essence, "See? That's why I don't vote!" - or- the ones that do vote can't get anywhere with a representative because the representative knows that apathy rules; you can't threaten to not vote for a politician when his going in position is that you might not vote next time anyway.

Were there a high turnout, that situation would necessarily change. Instead of "that's why I don't vote" politicians might then care if votes were threatened.

You may go back to Plato for supporting examples of human nature, but more telling is the early American history - or the early history of any country adopting representative government. People jealously guarded and protected the franchise they fought for. It's not straightforward enough to explain by simple example alone.

Bloodshed is almost never the answer to anything except to answer if you want more bloodshed.

Recalling Churchill, "Democracy is the worst form of government, except for all those other forms that have been tried from time to time."

Anything further would entail hypotheticals of utopianism, on both our parts.

But sure, be short-sighted and continue to think that you are the ONE TRUE VOTER, and everyone else is against you voting for the "wrong" people all the time.

I could not follow your point there, neither taking it personally, nor rhetorically. Kindly clarify, and if personal, OK, but thanks in advance for telling me how that applied to me or what I said.

Re:Geese and golden eggs

[JustAClam]

But Sparky, the restaurants, theaters and shops you patronize ALL pay a portion of their gross revenue to the state to support highways, education, courts and prisons, state parks, etc. Microsoft has basically claimed that all that software you build is being manufactured and sold from Nevada because Nevada's tax structure is more advantageous than Washington's for this particular activity. Living in western Washington is part of the Microsoft employment package - how would you feel if everything at work was the same, but you were located in Elko or Tonopah, Nevada? No ocean, no rainforest, mostly no trees, hardly any water, no skiing, and very sparse entertainment possibilities (besides possibly gambling away your salary). Oh, and legalized prostitution....

Microsoft is gaming the rules in a way very similar those who move their investment money to Switzerland in order to avoid paying income taxes. It's dishonest. Microsoft has this wonderful Windows Genuine Advantage (sic) program to keep me playing by their rules, but they don't want to play by mine (I WAS a Washington resident)? I don't think so. How can a business legitimately argue against software piracy when it cheats on it's taxes.

Oh, and to provide full disclosure, I've been a Microsoft stockholder for 20+ years. How much longer is questionable....

Re:Makes sense.

[earlymon]

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.

Right. Because the income dealings of a non-profit corporation are really just so shrouded in secrecy, loopholes and backroom deals.

In the time it took me to respond, Microsoft just wrote off more in taxes than the Mozilla Foundation is worth.

http://www.mozilla.org/foundation/documents/mf-2008-audited-financial-statement.pdf

Blow me.

Re:The other side

[tsm_sf]

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.

Re:Makes sense.

[david_thornley]

There are legal distinctions between for-profit and non-profit companies that have nothing to do with software licensing. If Mozilla is a non-profit, it operates under a different set of restrictions than Microsoft, but these restrictions do permit business deals. Why do you think the Salvation Army operated a store in our neighborhood, if selling stuff would make them lose non-profit status?

Re:i dont see any problem

[Nadaka]

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).

Re:$100 million? Shit, The Fed Doesnt need my TAXE

[sanosuke001]

I would love to see the fed allow everyone to write off any necessities (living expenses, school expenses, necessary food purchases) as tax free payments instead of having to pay taxes BEFORE necessary payments are made. Then, I wouldn't mind so much about things like this happening.

Or, get rid of the income tax, increase sales tax, and add a fed sales tax. Necessities wouldn't be taxes, as they are now, so for those of you who say a sales tax-only system would hurt the poor too much, tell them to stop buying things they don't need and they wouldn't have to pay any taxes.

Re:Free market? Democracy?

[exi1ed0ne]

What? Sorry, I was too busy watching Jack Bauer kick the crap out of terrorists on TV.

Ooooh, IDeals. Is Apple going into the coupon business?

Re:Hardly Surprising

[Maxo-Texas]

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).

Re:Hardly Surprising

[Alex Belits]

No, but pretending that "chosen few" are not really in power is something relatively recent (18 century recent, to be exact).

Re:The other side

[0100010001010011]

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.

Re:Hardly Surprising

[lord_rotorooter]

They should then be required to where corporate logos on their suits just like they do in NASCAR...

Re:i dont see any problem

[Grishnakh]

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.

Re:Hardly Surprising

[maxume]

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...).

Banks: too big to fail

[NotBornYesterday]

Microsoft: too big to tax?

Being Punished for Being Successful!!!

[mpapet]

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.

Re:The other side

[MrHanky]

Great idea. You may want to take a look at the economy of The Republic of Ireland, Iceland, Romania and a few others before considering it. (Spoiler: it tends to fail spectacularly.)

Re:The other side

[im_thatoneguy]

That would make more sense if Washington actually had income taxes.

Re:The other side

[Demonspawn]

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?

Re:The other side

[CodeBuster]

After all, these businesses bring in major direct (income taxes)

The State of Washington, where Microsoft headquarters is located in Redmond, has no state income tax

red and blue

[zogger]

You are seeing the red state/blue state sort-of lie. We don't really have that division as much as we have red areas, primarily rural and suburban, and blue areas, primarily major metropolitan areas. You can see it on the larger election maps, most fixate on the entire statewide breakdown and how the vote went in total there, but if you look at it state by state by state, the same red/blue split shows up, and it is primarily urban versus "other".

    So what happens is the metro areas in most of the states dominate politics, they have the edge in population a little bit, in most states now, and institute policies and laws that never really fit their *entire* respective states. What you said about Illinois and Chicago is true facts, the same applies to like NYC and the rest of NY, or here where I am, Atlanta versus the rest of the state.

Here is an interesting site that breaks this political split down more with various maps and corrected projections. It is quite interesting and there are links to more detailed analysis. The gist of it is, in the big elections and the general political pull of the nation, it is urban versus everyone else all the time. It fluctuates a little bit, but not much really.

http://www-personal.umich.edu/~mejn/election/2008/

The quickest way to see it on that page is first look at the normal state by state red/blue split (this is a look at the 2008 election), then scroll down to the first "Election results by county" map. The differences are very easy to see there and profoundly obvious.

Causes all sorts of problems all the time, and will continue to do so. And it isn't fair either way you look at it, from either perspective. There really needs to be a different political arrangement, so the major urban areas can have various laws that fit them much better, but without insisting on the same exact laws in the rural areas, and vice versa. As in maybe drop the notion of the political boundaries we have now and switch to what the boundaries really are, smallish city-states and huge "other than that" states as separate political entities.

    We have federal and state governments that keep trying to hammer square pegs into round holes and it just doesn't work very well, there is no real compromise even possible that would work and be more acceptable to all concerned.

    And it's not like this wasn't anticipated back at the beginning of our Union, this was the original idea with having both senators and representatives, instead of just representatives...That fix didn't last long, primarily I think because they didn't think it through far enough ahead in time to the point where there would be so many multi million person large cities, inside virtually every state in the nation. They thought it would remain like less populated states versus more populated, not realizing the political split would fall inside every single state for the same reasons, that urban realities are just different from the rural and suburban.

Re:red and blue

[scotch]

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.

Re:Ummm.. No.

[Jane Q. Public]

if you buy 1000 worth of wood, and sell the item for 1100, you are taxed on the 100.

you are just wrong.

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.

Who says the government can 't do things right?

[ClosedSource]

1. Accept money from MS competitors
2. Investigate MS
3. Take MS to court and win
4. MS has an epiphany
5. Accept money from MS
6. Profit!

WA is screwed because of Olympia, NOT Microsoft...

[LynnwoodRooster]

Seriously, in the last 5 years State spending has grown by 40%. The State's shortfall isn't from giving Microsoft or other mega-employers (those who employ 100,000+ in the State) tax breaks; it's from growing spending at an insane rate way beyond inflation plus population growth PLUS state GDP growth.

.
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...

Comment removed

[account_deleted]

Comment removed based on user account deletion

Re:Hardly Surprising

[Genda]

Actually we (The United States) are not a Democracy (the closest thing we have, that comes close to it are New England Town-hall Meetings.) Instead we have a representative republic, whose underlying ideal is that everyone get's represented, and that representatives, (wo)men of education and wisdom, manage the gap between mob rule, and sane, prudent and morally just government. As well, our founding fathers in their great wisdom, built a form of government that should have been well hamstrung by checks and balances. The belief being, that this would keep power-hungry monomaniacs from attempting coups.

The problem is, that in the first half of the nineteenth century, a bunch of power hungry, greedy, industrialists, ramrodded laws through our government, creating a new entity, with for all intents and purposes, all the rights and powers of a human being (and our Supreme court just decided this entity has full first amendment rights including the unabridged right to give as much money to politician as sanity or the lack thereof will allow), however, this entity could live virtually forever, amass endless billions of dollars, use that money to fundamentally alter laws, governments, even the fundamental ways that people can raise their children, manage their lives and communicate with one another. That entity is "The Corporation".

Ever since that one decision, we've been struggling to manage the rights of human beings, vs. the rights of businesses to impact human beings. To date, we've done a pretty poor job creating a society that is conducive to the advancement of people. When the nerds among us are inspired by utopian societies portrayed by the likes of "StarTrek", what's present for us, is a society that ultimate put's people first, and human enterprise (pun intended) second. Until we do this, we cannot simply claim to be a civilized society.

A useful first step would be to separate Corporation and State in much the same way we should separate Church and State, and for pretty much the same reasons.

think more about this please

[zogger]

And you have an irrational core assumption that people without land are even able to exist, let alone thrive or be "wealthy". That's scientifically impossible really. You have a lot of land per person, just it is removed a step. You don't have people existing totally on some teeny tiny piece of land, their "share" of the land is removed some geographical distance, but it is still necessary for them to exist. You aren't seeing the huge quantities of land that are necessary to keep big cities functional, and the people "out there" who need to do a lot of work out on that land to provide you with everything you need, nor attaching much importance to what those folks needs are.

  Those people out there and the land out there provide you with 100% of your tangible human needs, all of it, every single bit of it.

  If you keep politically marginalizing those people "out there", as I tried to point out with this red/blue conflict and split politically, eventually they are going to stop supplying you, either from desire to just stop, or because they won't be able to because of imposed political and economic realities. You can look in history books to see what this means exactly and here's a clue, it ain't pretty.

  And this is what is happening today with the political emphasis being counter weighted heavily towards concentrated population centers, and the political minimizing of what the "other" areas really represent in terms of day to day importance, and what the people "out there" think is important and need. You can ignore it or claim it doesn't exist or just isn't that important, etc, but I think that's just silly. And those maps prove this major split exists, it shouldn't be ignored.

    Go back again and read some more history, this problem, identified by some smart guys way way back, was addressed with the combination of both senators and representatives, but it isn't quite working any more, there's a *lot* of fail there and a lot of political disagreement and outright hostility that keeps growing.

  I'm just proposing we take a new and more logical look-see at the situation and try to fix some problems before they hit harder, that's all. We have a necessary social and economic symbiosis that is fractured today, and badly, and that split is widening, and the historical parallel eventual outcome falls into the "this just totally sucks" category. For all of the above, everyone.