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10% Tax On Custom Software, $100M Tax Cut For Microsoft
reifman writes "Last week, the Washington State House of Representatives passed a bill which would impose a 10% tax on custom software while all but eliminating a $100 million yearly tax obligation that some say Microsoft is wrongfully avoiding by routing large chunks of business through an office in Nevada. 'I believe we've got an issue of justice and fairness here,' said Rep. Maralyn Chase. 'Most of the custom software purveyors are small businesses. It's a question for me of how we fairly distribute the tax burden.' 'It means that a 5 person team of entrepreneurs building a cool custom software suite, or a group of system integrators, would face a 10% tax on their services while keeping the exact same project in-house would not be taxed,' wrote Rep. Reuven Carlyle. 'It would be a massive blow to the entrepreneurial community in our state.' The bill won't become law until the House and Senate work out how best to raise another $300 million in taxes. A sales tax increase on consumers is also being considered."
This is clearly is bad for the individual geek who makes their living selling simple custom programs that do only what the user wants/needs and nothing that they don't, unlike Microsoft omnibus packages. It's a case of government by large corporation over the individual if this passes.
I propose a 20% tax on people who pass stupid laws!
At first I thought ... "that doesn't affect me, I run Linux" ...
But what about paying a developer to work on a FOSS application? Would that be taxed? It is custom software, after all.
The sales tax is a very regressive tax. Why should ordinary people of Washington take the hit disproportionately so that Microsoft can be let off the hook for what is basically equivalent to offshoring?
This is like taxing grocers and restaurants while giving incentives to out-of-state food processors and big-box ultramarkets to bring in more processed pseudo-food.
What, exactly, is the message the legislators are trying to send here? "Tax local, buy global?"
Welcome to the Panopticon. Used to be a prison, now it's your home.
first cut should always be to government offices furniture budgets, then look at the "perks" elected officials get and cut those
arent you already taxing the income that is generated as a result of that software ? and applying any kind of sales tax to the software, if there is a sales tax in the state ?
Read radical news here
Andrew Stack would be upset at having to pay any taxes. He was also a loony. The selective 10% on custom software is a supremely stupid thing, but invoking the name of an anti-government crackpot isn't helpful.
Or, they could be honest and raise the money though an old-fashioned income tax, or sales tax. But I'm sure they'd rather hide the tax burden from the people who are ultimately paying it. Gotta love the government.
Just so you know, the state of Michigan tried a 3% tax on gross receipts on physicians... It got shot down in the state senate after the house passed it. They're trying it again in by hiding it in a new budget bill.
I bring this up because it's in the same idea of trying to find new tax sources, that affect a small population to make it not unpopular... And it helps if that particular group is perceived to be "well off." It's poor policy to make one profession bear the burden of the masses (IMHO). It's a great way to try to drive business out of an area. It's also a great way to pass the burden onto the consumer without and claim that taxes have been raised.
Fortunately my little corporation isn't in Washington. I know first hand that there are many states more conducive to small business. Unless there is some specific reason for remaining there, it isn't be too hard to move. 10% is no small increase, so it's definitely worth looking into a change of locale.
I don't suppose anyone in the WA government considered reducing expenditures enough to make up the difference. Too radical a concept I guess.
If you're going to write to your representative, you might want to mention that the average government worker makes 45% more than their equivalent in the private sector (30% more if you only include salary). I don't know the precise situation in Washington, but in most states with deficits, if the workers pay was cut to the same as they would in the private sector, the deficit would be more than closed.
My representative likes me to provide cites when I make pronouncements like that.
This is why tax policy should be re-evaluated. We should not be taxing things we want people to do, we should be taxing the things we don't want people doing.
If we, as a society, value something, taxing it is the most assured way of destroying it. Let us legalize drugs, prostitution and every other "victimless crime" we have now, and tax it.
I have never understood the idea of taxing things people need like income.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Obviously if the man said 2+2=4 he must automatically be wrong... The man was crazy but the idea that our government and tax law as a whole have also gone batshit isn't that crazy.
Sigs are too short to say anything truly profound so read the above post instead.
I have never understood the idea of taxing things people need like income.
Because that way you can pay for other things people need, like roads, hospital, military protection, police, fire, etc. There honestly isn't really anything taxable other than income that can cover these things.
Is Senator Margarita Prentice. According to her bio, she is a member of:
"American Civil Liberties Union; Amnesty International; Democratic National Committee; First Vice President, Washington State Nurses Association, 1968-1972; Labor Officer, Washington State Nurses Association, 1974-1978; Sierra Club; Renton Historical Society; Audubon Society; Humane Society of United States."
http://www.senatedemocrats.wa.gov/senators/Prentice/biography.htm
"The average reporter we talk to is 27 years old......They literally know nothing." - Ben Rhodes
Custom software has to be one of the cleanest, safest, crime-free, low impact industries in the state. You have industries with MASSIVE infrastructure burdens like: Trucking, Logging, Mining/Cement generation, farming. Industries that require inspectors or police protection or heavy truck support, water projects, and electrical projects. These industries cost the state big money to support. Or look for industries that create expensive side-effects like pollution.
Just try to zero the bubble: the industries that take the most out of the state in terms of infrastructure costs and natural resources should have to pay taxes so that their cost to the state becomes zero. But the low-impact industries, ones that cost the state little or no money to support, should not have to have special taxes directed at them.
Yes.
Road Taxes paid by Taxes on Fuel. Not enough roads, raise taxes on fuel, doubles to reduce cars on the roads, and pays for increased roads. Smog increases, then raise taxes on smog producing fuel.
Military can be paid for with taxes on corporations (state created entities), and cross boarder transaction taxes.
Fire and Police are local, and should be paid for by local taxes like property taxes, since they are used to protect property.
The problem as I see it today, we have no balance in taxing and spending. We have big tax/spend (D) and little tax/big spend (R). Nobody is really offering the REAL solution which is to spend what we tax and tax what we spend. Letting the people vote with their wallets on what is a priority with them.
Of course that doesn't sit well with the busybodies and dogodders who love to spend other peoples money and stick their noses in everyone else's business. Yes, I'm talking about both (D) and (R).
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
Here you go! http://www.orthodoxytoday.org/blog/2010/02/09/government-workers-make-45-percent-more-than-private-sector-employees/
Here you go. If you want to get around the paywall, try the first link from this search. It isn't a surprising statistic though if you've ever worked with the government, although I'm sure the pay inequality isn't spread equally. As an example, my brother and I both worked in construction for a summer, me building houses, and him building a prison for the government, and his pay was 2.5 times what mine was. Stories like this are all over if you work in California.
I guess people don't really like this topic (since the original post was modded down), but I think it's one that's going to gain more prominence in the next few years, along with public pensions, as they get more and more expensive. It should be clear to everyone by now that the government is either going to have to cut spending or increase taxes, most likely a combination of both. I see paying employees a sane wage as a reasonable step towards a more balanced budget, but if the rest of the voters disagree with me, that's ok. Regardless, we're going to have to do something as on our present trajectory we're headed towards disaster.
Qxe4
Is repairing infected OS and apps using third party tools at the computer fixit shop a matter of customization? Scenario: The PC owner comes in with the borked machine, it has a state of software level. The tech uses his antivirus and search and destroy stuff and skillz, and customizes the software on the customer's drive, to get it back to a functional level. Perhaps they also add a couple new features, like FF and OO.
With that said, the malware/botnet authors and maintainers could be charged with tax evasion in addition to any other crimes, by customizing software. heh.
This is actually an attempt to make it more uniform, isn't it? Currently, if you write software and start selling it, you must collect sales tax. But if it's custom software, it's common to account for it as part of a service, not a sale of software, so sales tax isn't collected. This bill would essentially add sales tax to all software sales, including those that are done as custom-software deals rather than retail sales.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10