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Income Tax Quashed, Ballmer To Cash In Billions
theodp writes "Washington's proposed state income tax not only prompted Microsoft CEO Steve Ballmer to spend $425,000 of his own money to help crush the measure at the polls, it also inspired Microsoft to launch a FUD campaign aimed at torpedoing the initiative. 'As an employer, we're concerned that I-1098 will make it harder to attract talent and create additional jobs in Washington state,' explained Microsoft general counsel Brad Smith. 'We strongly support public education, but we're concerned by key details in I-1098. This initiative would give Washington one of the top five highest state income tax rates in the country. I-1098 would apply this tax rate to all income, including capital gains and dividends, and would not permit any deductions for charitable contributions.' Nice to see a company take a principled stand, backed by a CEO who's not afraid to put his money where his company's mouth is, right? Well, maybe not. Just three days after the measure went down in flames, Ballmer said in a statement that he plans to sell up to 75 million of his Microsoft shares by the end of the year to 'gain financial diversification and to assist in tax planning.' Based on Friday's closing price of $26.85, the 75M shares would be valued at approximately $2 billion. All of which might make a cynic question what was really important to Microsoft — public education, or a $2B state income tax-free payday for its CEO?"
A corporation is required to maximize the profits for its share holders. Ballmer is a major share holder. Of course Ballmer's profits matter more than public education.
Palm trees and 8
...something is to be said for unenlightened self-interest. I am just not sure as to what.
Income tax is on income, not capital gains. He wouldn't have been paying income tax on his share sale anyway.
And his argument was that it would hurt his ability to attract talent. Unless by talent he meant himself I fail to see how what he does with his assets has to do with this issue.
Can you be Even More Awesome?!
Why should he pay the bill for the rest of the low lifes in the state who will never pay in as much as he has. State welfare has to end, not fair to punish those who DO PAY.
Just because the CEO then uses the tax free environment he helped create the article questions his intentions? Of course it was going to benefit him greatly, and just because it does, doesn't make any of the prior points against the tax less valid. Its his money, he worked for it. Get over it.
"Cowardice in a race, as in an individual, is the unpardonable sin." --Teddy Roosevelt
Well, folks the public IS getting educated here. Education on how to manipulate the political system for personal gain, that is.
It's not as if Gates's philanthropy is a mantra of MS as a whole. It answers directly to the shareholders most of which could care less what impact things like this have on the state...as long as it doesnt effect their net worth.
Surely income from share sales would be subject to capital gains tax not income tax, or whatever the USA calls it?
I'm amazed that one person would own 75M shares of ANY company. He's damned right he needs to diversify. And since no one else in WA state has to pay state income taxes, I don't see why Ballmer not paying a nonexistent state tax is even an issue. I guarantee no one who lives in WA state is bitching about not having to pay a state income tax. Furthermore, it's not all that uncommon to do a bunch of financial rearranging at the end of the year before new taxes take effect. Any person with at least half a brain does whatever they can to minimize their tax exposure. No, liberals, paying taxes to the government does not count as an act of charity.
Income tax or sales tax. One or the other. Not BOTH.
Personally, I'd support an income tax IF AND ONLY IF the sales tax was ended.
As studies show many Americans can't tell income from capital gains.
The biggest reason why I-1098 didn't pass has little to do with Ballmer. I believe the biggest reason was that in only two years the law makers could modify the tax to include all Washington tax payers, not just the rich. There is quite a large distrust of the spending habits of the progressive law makers here so 60% plus of voters decided not to risk it.
"There are four boxes to be used in defense of liberty: soap, ballot, jury, and ammo. Please use in that order." -Ed H
It wasn't just Steve Ballmer or Microsoft fighting I-1098 ... this measure was very unpopular all across Washington State and failed at the polls by a 65% - 35% margin. Washington State is one of the few states in the US without a personal income tax (the sales taxes here are very high to make up for the revenue deficiency). I-1098 would have introduced a personal income tax on the "richest" residents (those making over $200K individually or $400K as a family), but the reason it failed by such a wide margin is that most Washington residents (including me) believed that once they introduced a personal state income tax here, the politicians would plead "necessity" and keep lowering the threshhold over time to the point where most residents would be paying it, and without any decrease of the sales tax to compensate. The majority of the population here is all in favor of education and healthcare, we just don't believe that a state income tax is the way to fund them.
FWIW, Microsoft and other large businesses in Seattle do have a legitimate interest in avoiding a personal state income tax, as for recruiting and keeping high-priced talent there is an advantage for them to come to Redmond and live in a state with no income tax vs. going to some other company - say, in California - and paying the tax rates there. An equivalent pay job offer in the Seattle area vs. many other states actually means more take-home pay here.
"95% of all Slashdot
http://arlingtonmassachusettsrealestate.com/
It is staggering to look back at the decade Ballmer has been in charge:
* Stock price has been effectively flat for an entire decade
* Lost hundreds of billions in market cap since Gates left
* The cellphone market failure
* The Xbox fiasco
* The search market failure
* The online services failure
* The portable music market failure
* IE's stagnation and market-share shrinkage
* The resurgence of OS X market-share
If Ballmer is soon to get dumped from the top spot at Microsoft it is bad news for Linux and Apple whoever replaces him can't possibly do any worse than Ballmer's disastrous decade at the helm.
Because giving government unlimited access money will solve their budget shortfalls. State government is not had a income problem, they have a spending problem, when everyone else is cutting back, they have been ramping up their spending.
Any company with a large presence in Washington would feel the same way. This is an issue with corporate America in general, not Microsoft in particular. I have a hard time believing that anybody leaving negative comments here wouldn't behave the same way if placed in a similar situation.
So pointing out that areas that have higher taxation may not be able to get the best talents available to come to said area is now FUD? Wow. Just wow.
The timing of this sale is interesting not because of the defeat of the recent measure but the departure of the Ozzie, Allard, and Bach this year. Incidentally 75 million is the full amount of his sale. He's sold 49 million of the shares already. My opinion is that he's run out of people to blame or they were smart enough not to stick around to be blamed. It was disclosed that his bonus was cut in half this year because of the decline of Windows Mobile in the market place and the failure that was the Kin. After the dot com crash of 2000, MS stock has never passed $40 a share for his entire tenure, staying mostly in the mid 20s. Even though MS is highly profitable, the board may feel that MS cannot grow with him at the helm.
Well, there's spam egg sausage and spam, that's not got much spam in it.
Exactly as designed. Yay democracy!
For justice, we must go to Don Corleone
As a Nigerian, I am deeply jelous of your corruption!
Sent from my ASR33 using ASCII
in the articles headline is almost as enlightened as your 'think of the children' rich CEO witch hunt. well done sir.
Is that the biggest rat is deserting the sinking ship.
> ...a $2B state income tax-free payday for its CEO...
He is selling the stock this year. The new income tax wouldn't be retroactively applied to this year. Whether it passes or not, it has no effect on the sale. Why lie and try to make it appear that they do? Your agenda is showing.
I'm really tired of blog postings being accepted as summaries of news, complete with sarcastic comments embedded. This is just one example. If I want to read blogs, I know where to find them. I come here to read summaries of news items, and discussion about them. If someone submitting a story wants to share his opinion (everyone's got one), he can do so in the discussion. If he thinks his opinion is so noteworthy that it deserves special attention, he can start a blog and mix his opinion with everything. There's value in having a neutral summary of the news event.
The summary should have mentioned that the tax proposal was authored by Bill Gates Sr., and was supported by Bill Gates Jr., which is some pretty good evidence that Gates Jr. really has managed to separate himself from Microsoft.
As to why Ballmer is selling now, there's a pretty good chance it was for tax planning purposes. Many think there's a high chance the capital gains rate is going up soon, and so taking long term capital gains this year is indicated.
I think that Ballmer meant to sell off 2B whether or not this passed. But can you imagine what his letter would have said if the tax was enacted? Here's my guess.
/idle thoughts
Dear Washington State,
You've decided to tax our companies. So I've decided to move my money before the tax comes into effect.
Love, Ballmer.
Right now in washington, the income tax is political suicide. In order to take more money, they're trying to get the voters to pass it. Sure, they can't adjust it for 2 years, but after that.. well, we'll just lower the threshold by 10%. It'll only affect a small number of people. The rich people will already be taxed (so why do they care), and people below $180,000 still won't be taxed, so why do they care?
Next year.. wash, rinse, repeat.
That's why I voted against it even though I wouldn't have been taxed.
All of which might make a cynic question what was really important to Microsoft — public education, or a $2B state income tax-free payday for its CEO?
If the measure had passed, the tax would not have started until 2012, so that was a pretty stupid question. Ballmer's stock sale was income tax free regardless of what happened with 1098.
Good for Microsoft. The State doesn't deserve $.01 of their profits.
The most amusing take I saw on 1098 was that of the Boycott Novell folks. They blasted Ballmer for opposing the initiative. Rich guy not wanting to pay his fair share as his state flounders, yadda yadda. They also blasted Gates (both of them) for supporting it. Rich guys who have all their money hidden in tax free charities trying to avoid paying their fair share by making their fellow rich people pay.
One of the flaws in this 'story' is that it characterizes itself as trying to shoot down the idea that Microsoft acted on principle: Nice to see a company take a principled stand, ... right? Well, maybe not. Yet it fails to offer evidence that anyone, including Microsoft, has even hinted that Microsoft was "taking a principled stand". Maybe this stems from the author's misreading of Microsoft's statement that begins "We strongly support public education, but ...", as a claim that the company is opposing the bill as a way of supporting public education. He makes this misunderstanding clear in his final sentence: All of which might make a cynic question what was really important to Microsoft — public education, or a $2B state income tax-free payday for its CEO?
All the 'story' really even attempts to argue is that the self-interest of Ballmer in the defeat of the income tax brings into question whether Microsoft's leadership acted in the company's interest, or in Ballmer's. But it fails even at that. It offers evidence only that Ballmer's and Microsoft's interests were aligned.
Those who would give up essential liberty to purchase a little temporary safety, deserve neither liberty nor safety.
This is just another bait and switch brought to you by our corporate overlords. For the life of me I can not fathom why people continue to buy this shit, brought to you courtesy of the GOP (and, more recently the teabaggers). They sell their agenda as a "populist" initiative, when the reality is it's just the rich further disenfranchising the non-rich. Will people ever wake up to this? I doubt it.
quote, "public education, or a $2B state income tax-free payday for its CEO?""
In most states public education is funded by property tax.
Further, I'm happy to be in one of the few states that doesn't tax income.
Anyone at Microsoft involvement in the dissemination of FUD? Nah, it would never happen.
Fight Spammers!
Many of these big companies are tax dodgers anyway.
For example, Bill Gates probably wouldn't have needed to set up a charity if Microsoft had paid its taxes. There would have been lots of money to be spend on medical research and international aid.
http://microsofttaxdodge.com/tax-evasion/
I'm not really sure what you guys are concerned about. I get taxed out the ass but I don't really see much of a problem with it.
Amusingly enough....Maryland has also been a leader in the nation for job growth for a large duration of the "recession". We were far less hit with it than anyone else around us.
A sales tax needs to be federal in order to work. Montana has zero sales tax; consequently, we (Montana residents) are inclined to buy locally if the price itself is competitive. The second a Montana sales tax was implemented, there would be little reason to buy locally.
A national sales tax with a built-in "poverty threshold" is definitely the way to go. Not only can it put the weight of the tax where it needs to be -- on activities above the poverty level -- it eliminates the hugely regressive hidden tax-again feature of the income tax that hits *everyone* equally no matter how poor, and it encourages both earning and saving.
If you think income tax is fair, you simply don't understand how it works. Even if your tax rate is zero - say you earn $5000 a year - your $5000 is still taxed at the average rate. For instance, if the plumber is paying 35%, and you pay some of your supposedly non-taxed $5000 to the plumber to fix your leak, 35% of what you gave him goes right to the government; this increases your cost of service by about 1.5 times. In other words, you actually paid the plumber $65, and of course, that's as much, or more, than the service you got, and you paid the government $35; every transaction you make with your $5000 will be hit with the "hidden" income tax applied to whomever you paid it to, and you will get that much less service, goods, etc. In the end, you pay about the average rate.
For the plumber, the effect is stronger. He's paying 35%, so you give him $100, he gets to keep only $65. Then he has to give that to the electrician, who is also paying 35%, and so the electrician pays $22.75 to the income tax and gives out (at most) $42.50 worth of service to the plumber. So the net tax rate on the plumber for that transaction is 57.75%.
The most important point, however, is that the poorest folk cannot escape the second, hidden income tax. Which is why income tax is, by its very nature, regressive.
On the other hand, if the national retail sales tax is 35%, and the essential survival costs per person are deemed to be $1000 per month, the government sends *everyone* a check for $350 at the beginning of the month. This way, the tax obligations of that thousand dollars are covered, which means that enough for survival basics are tax free. everything is taxed at retail; no exceptions. Everything. Anything you spend per-person beyond your $1000 is considered non-essential, and you do pay taxes for it.
There is no double-taxing. Everything is taxed one time, at retail. No double-dipping on resale of used goods, no double dipping on incomes, etc. You can control your tax rate directly. The IRS and a zillion lines of tax law could be eliminated completely. It is better in every way possible, and it is in no way regressive - unlike income tax. Poor folk could actually exist completely tax-free under such a system. They cannot, with an income tax. You could send them a check that covers the average income tax rate double dip; but because that rate varies (a lot), some would be overpaid, and some under. it only really works properly if the tax rate is flat -- and that's another thing a national sales tax that replaces the income tax would deliver -- a proper flat rate system.
I've fallen off your lawn, and I can't get up.
It's not just Balmer, high level corporate execs are ALL selling at a fantastic rate. the ratio of them selling to buying is the largest it has ever been since records have been kept.
The reason is simple, the FRN is tanking hard and fast and they do NOT want to get stuck holding shares of anything that are denominated in FRNs. All the fatcats are diversifying into commodities, bullion, farm land, stuff like that, things of actual value that the Federal Reserve can't make worthless. Now the rabble will hold on to their stocks, because they get told to do so by the wall street gangster talking head shills, but all the fatcats are bailing out FAST.
The income tax initiative was pushed by Bill Gates Senior, the father of Slashdot's favorite person. His son also (eventually) came out in favor of it. But Ballmer and Allen were both against it, IIRC.
Washington state has a very regressive tax structure, with a stupidly high sales tax rate that IMO puts way too much of a burden on lower income people. But the stupid thing was that the income tax measure didn't really address the sales tax inequity - instead, it was going to lower parts of our property taxes and also cut the B&O tax - neither of which would directly benefit low-income people. I voted for it anyway because I thought it was a small amount fairer than the current system - but it didn't really get at what I see as the underlying problem here.
That's the thing about the income tax initiatives that've come through our state. There've been a few in the last 30+ years, and they never make a significant dent in the sales tax rate.
#DeleteChrome
Is that there is no one "right" tax. All taxes have advantages and disadvantages. Ultimately the source of tax money doesn't matter, since it is all coming from the people, what matters is that the government gets the funds it needs to provide the services people require of it. The choice in how to collect the taxes largely comes down to what you want to encourage or discourage, and so on. Income tax is good in that it is pretty stable, so long as their are jobs in your state. It is bad in that it requires higher salaries to make up for the money being taken off the top. Sales tax is good in that is maps nicely to spending, however it is bad in that it can be regressive if necessities aren't exempted, and people can evade it by buying from other states. I could go on with more reasons for those taxes, or for other taxes, but you get the idea. There is no "right" tax.
That Washington doesn't have an income tax is neither good nor bad. It just means that either other taxes must be higher to provide the necessary services, or the amount of services provided will need to be less. The tax money doesn't need to come directly from a paycheck anymore than it would need to come directly from sales. Other states don't have sales tax, that works too. Still other states have both, also works fine.
The Washington income tax looked to be very poorly implemented because it was so high. Not that a high income tax is a problem, but a high income tax that is brand new is a problem. If the idea is that revenue has fallen and you need to increase it, a small tax increase would be what is in order. That is what happened here (sales tax was the chosen tax in this case).
This very much looks like you say: Something they could creep on to all people in short order and hit them with a heavy tax.
The problem is that government is good at forgetting that tax is a thing to be collected in the amount needed to pay for what you do. Instead they start thinking that tax is something to be collected in as large a quantity as possible. That is not a good way to do things. Taxes exert a negative effect on the economy. Ideally from an economic standpoint, you'd have no taxes. That isn't workable, of course, we need taxes to pay for services. However that does mean that the taxes collected should be enough to pay for what is needed/wanted, and not just as much as possible.
You only say that because you're a racist!
"china (or insert random country) will pass usa in brain power in 2010something" and panic ...
if you be selfish assholes that only think about your own pocket over your entire society, you not only deserve being surpassed, but bring it upon yourself.
Read radical news here
This legislation would not have gone into effect until 2012, so it is unlikely to be the incentive for Balmer's stock sale.
The real incentive for this timing is that the Bush tax cap gains tax cuts, especially for high income people are very much in jeopardy of expiration at the end of this year, and there is a surcharge to these rates on the books for high income folks.
I voted for the income tax, though I didn't expect it to pass legal challenge. Rich people can buy a lot of lawyers. And in the end, we are back where we started: An antiquated, recession-prone sales tax that hits poor people a lot harder than rich. Washington's the sort of state I thought would be daring enough to perhaps someday implement a negative income tax, but if we can't even pass a traditional income on less than 2 percent of the state, then I really don't know about that. I'm just appalled people are willing to accept the status quo. But the most interesting point here is that this also say something about certain (but not all) macroeconomic theories. Some theories rest on the idea that individuals will always make decisions based on their own personal interests. Passing that income tax would have been in the interest of any person that made less that 200k a year, that is to say, about 98% of the state. The prop lowered taxes on these people. They would have received a direct financial benefit. And yet they voted it down by something like 60%. That either means that people are incredibly concerned about the welfare of rich people, or that people are more than willing to make decisions that harm themselves if they are convinced to do so by advertising.
--The universe will not be altered by forum threads, even those which are very wry. --Tycho Brahe (Penny Arcade)
Don't you worry about income taxes.
I am against income and payroll taxes (that's my bias) I am also pretty much against all government.
---
Realize that taxes are going up. Not only taxes on your income, don't you worry about your income, taxes are going up on your entire net worth.
Gov't is printing money.
Fed is printing hundreds of billions of dollars.
This automatically takes away your purchasing power.
Inflation is rampant.
Fed is causing rampant inflation by printing money. By printing money they are taking away your savings in form of dilution of your purchasing power.
---
Your purchasing power is going down with every new dollar the Fed is printing.
Note, that the Fed came out (helicopter Ben) with a promise to print 600 Billion dollars more over the next 7 months.
That's just by June and it's about equal to the amount that the Federal gov't will borrow over the same amount of time. This means they are the lender of last resort to themselves. This also means that they know the US bond is on its last legs - nobody wants to buy more.
US gov't is broke. It's monetizing its debt and it's trying to cover that they are doing it, but it's not working as a cover, it's too "in your face".
Abandon ship, get rid of your US holdings, they are becoming worthless fast.
You can't handle the truth.
Why be so cynical? Can't it be both? I know that so many here are incapable of anything other than binary reasoning, and want their moral conundrums to be perfectly black or white, right or wrong, good or evil, and that is pretty much what drives the "wannabe nerd" moral outrage 'round about these parts, these days... but the real world isn't binary, you know.
Hell, the real world isn't even digital - it's analog. And let's face it: Analog is messy, at best.
And, I think I just created my new sig *grin*
"Life isn't binary... Hell, it's not even digital. Life is analog, and analog is messy, at best".
Regards,
dj
If you make below the poverty limit, you get a 100% refund of the taxes
This just subsidizes McDonald and Wallmart's bottom line. Ideally, there should be no refund on taxes, and a higher minimum wage to compensate. Much simpler and fairer, and it isn't corporate welfare in disguise.
Like all pain, suffering is a signal that something isn't right
Stupid naive poster should instead second guess the intention of the bill longer term.
But ... maybe he doesn't care, since he is already forced to pay state income taxes to help "education" in some other state.
Or his lower income makes it more "convenient" for him to advocate forcing the rich and non-FOSS companies sponsor education for the rest.
Posts like this is so disgusting that I finally realize how much time I wasted here.
I live in Washington. Here's the deal. The State has increased its spending 80% in the last ten years when inflation and population growth has been 40%. No one can see a 40% increase in services. They just spent more money. Now that the recession has reduced the state coffers the State is whining that it has a deficit. If the State went back to a 40% growth rate over the last ten years there would BE no deficit.
Now, this is like the umpteenth time the voters have said NO to s state income tax. Why? Because we know it's just the camel's nose in the tent. They're trying to get a class war going so all the people will want to tax the "rich," then when that is implemented, in two years the state legislature will reduce the threshhold so that we all pay or inflation will be so bad we'll all be in the 'rich' bracket. No one trusts the legislature.
One of the ploys was to say "it's for the children." Right. Just like the lottery was supposed to be for education, the legislature has shown its stripes so many times by raiding earmarked funds that it makes a travesty of the claim.
Voters also passed, for the third time, an initiative calling for a 2/3 vote of the legislature to raise taxes and fees. The legislature has managed to override the last two. One of the complaints was, why should 51% vote for a 2/3rds majority? OK. This time we approved the intitiative by 67%. Capiche? We don't have a revenue problem in Washington. We have a spending problem.
I don't care one whit what Ballmer & Co do with their money. I just know my money is more precious than his because I don't have anywhere near what he does. And I'm tired of having it confiscated by a state that doesn't understand it has to live within its means.
How about a moderation of -1 pedantic.
What amuses me is how America's system of 'trickle down economics', whereby they keep average wages down whilst all the proceeds of growth are sucked up by a largely non-producing elite, has left it in such dire economic straits that only reckless borrowing (both private and government) keeps the whole house of cards propped up
I find it endlessly more amusing that all of Europe's own house of cards is propped up by Germany.
I mean, annoying Germans - historically that always ends well.
Europeans are the last people who should be proclaiming the wonders of higher taxes with the state of spending and the economy there.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
I should have added, Ballmer cashed in his chips THIS year AFTER the income tax measure failed. Had it passed it wouldn't have started until next year anyway (maybe even the year after). There really is no relationship between the income tax measure and Ballmer selling stock.
How about a moderation of -1 pedantic.
I believe the biggest reason was that in only two years the law makers could modify the tax to include all Washington tax payers, not just the rich.
Bullshit, bullshit, bullshit. That's one of the talking points the anti-1098 campaign was using before the election. It was FUD then and it's FUD now.
Here's why: if the legislature wanted to pass an income tax, they would've done it already.
"Only two years" is how long it takes after an initiative passes before the legislature can change it. The anti-1098 campaign baselessly speculated that the legislature would extend the tax to cover everyone, even though they've been free to do that all along and have never taken the opportunity. But it's just as likely that the legislature would repeal the tax after "only two years": after all, the tax would only have impacted high income earners, and that's who the legislature listens to.
Visual IRC: Fast. Powerful. Free.
I live here in washington. I am disabled and need the state subsidized health care. As a result of the budget cuts coming in January I will probably loose that health care along with 70,000 others. There are so many other departments that can be cut back. I firmly believe that federal and state government is first and foremost required to provide for the security and safety of its residents and then help those that can not help themselves, then education. Then prioritize other services.
Residents of WA should thank him for saving their money.
You earned it my man! Have some nice dinners, and kick back a few for me. God bless ya. I'm hoping my last days at my job will have the same benefit to me :)
You're the man Steve. :)
Steve
Most people I tell are shocked when I tell them that the income tax rates on individual income over $200000 was 92%, according to this Tax Foundation pdf file. This would be the equivalent of taxing millionaires at 92% today. The interesting thing is that the period from 1945 to 1963 was one of profound middle class economic security. When I read about Mr. Balmer's income tax shenanigans, I am reminded how much times have changed.
This and no other is the root from which a tyrant springs; when first he appears as a protector - Plato (423 to 327 BC)
If the writer of this article were to actually take time to research, he would note that Ballmer's stock sale has nothing to do with Washington state tax laws. The federal capital gains taxes are due to increase (you can thank Obama) after this year by 5% for those in the top 4 tax brackets. Let's see - 5% of $2B is how much??? The writer's logic makes no sense.
Precisely, comrade!
has left it in such dire economic straits
Yes, such "dire economic straits" that it remains the largest economy in the world, continues to lead most global industries, has an HDI ranking of 4th, and has unemployment roughly on par with Europe (and slowly improving once again). Dire indeed. A true 'house of cards'.
Meanwhile Europe emerged totally unscathed, of course, from the financial crisis --- major European banks didn't collapse, Europe didn't also go into recession and experience major job losses, there was no Euro crisis earlier this year, and the massive 'austerity measures' (and other moves in a more American-style direction) currently being put in place to rescue many major Western-European states from the verge of bankruptcy don't exist. (cf. http://www.bbc.co.uk/news/10162176 - e.g. "The Chancellor, George Osborne, told parliament that 490,000 public sector jobs would be cut over four years because the country had "run out of money". Experts predict a similar number of job losses in the private sector.")
Your post has all the right crowd-pleasing rhetoric and buzzphrases, but I'm afraid upon analysis it doesn't hold up against reality. But please do continue to be "amused" while you look down your nose at the US and speak, I'll be generous, basically fiction.
So according to theodp, the notion that a state income tax is a deterrent to recruiting workers into the state of Washington is dismissed as FUD. On what evidence? Seems reasonable that, at a minimum, people from states without an income tax would be hesitant to move to states that have them. And the implication of theodp's argument is that only people who aren't going to be affected by the income tax have moral standing to argue against it. How convenient that turns out to be! It's essentially an argument that taxpayers affected by the law should be silenced. Peachy.
If it were possible for money to "crush it" in the polls, we'd be talking about governor Meg Whitman of California now.
Referring again to California, they could not get people to vote for a parks tax, even by saturating us with ads showing cute little fox pups poking their heads out of the den.
This election made me feel just a bit better about living here, knowing that fellow Californians can't be manipulated like that.
In the case of the parks proposition, my rationale for voting NO went like this: The parks were underfunded by a financial crisis. Crises pass. New taxation methods are virtually forever. Also, there would be uninteded consequences. As it stands now, many parks have entry fees. With the tax, any Californian with a car would have the right (or would feel justified in demaning the right) to enter without a fee. This would require more infrastructure to support the demand. Thus, the gain from the tax might be negated. Then, they'd want to raise it. Closing the parks was a bluff anyway. The parks provide a return to the state indirectly, by supporting tourist businesses near the parks, which pay other taxes. I can't speak for the rest of the state; but I bet they realized all of this too.
The cute little foxes didn't sway us, and neither did Meg's millions.
For all intensive purposes, "whom" is no longer a word. That begs the question, "who cares"?
the state of Washington did absolutely nothing to help him make it, they have no right to any of it! let them learn to budget properly and prioritize spending like everyone else. they need to stop looking for easy victims they can suck dry just because they have spending habits they don't want to kick.
I live and voted in Washington state. This isn't about Balmer, it's about us being a sales tax state, and not a sales tax and income tax state.
and it's budget is NOT a lack of income; it's the 35% increase in spending over the last 5 years. Spending increases that GREATLY outpace inflation and population growth combined. Olympia (WA State capitol) was looking for more money to recklessly drive spending even higher, rather than first looking at the reason for the budget crunch - the reckless high spending they've been doing for the last 5 years.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
I think a whole lot of people who know nothing about my state just decided to make random political interjections about something they know nothing about
Person advocates policy that is in his own best interest! News at 10!
For example if you are living in portugal and want to purchase a car, you will pay approximately half as much buying it in germany.
I don't believe a plumber would be likely to be paying 35% of the price they charge in income tax.
Around 1/2 of the total price would be tax deductible (materials costs and other small business deductions)
Local contractor "license fees" are more likely a much bigger contribution to the tax portion of your bill.
Also a person making $5000 a year could not afford a plumber and most likely lives in some form or government subsidized rental housing. Any plumbing costs would be paid by the landlord, who would use the cost as a deduction on their income tax.
The summary is FUD. Even if the measure had passed it certainly wouldn't have been in effect for 2010 income, so his selling this year would not have been subject to the tax anyway.
I love bashing the rich, Microsoft, and especially Ballmer as much as anyone but it's kind of hard to overlook the glaring logic error in the cynicism: whether or not that measure passed would have no effect on Ballmer's stock sales before the end of the year anyway. I suppose it would've looked a little worse if the measure passed and he immediately dumped a bunch of stock, but somehow I don't think that PR problem is worth the effort and expense.
There are plenty of very smart liberals out there that strongly feel that government just doesn't take enough in taxes. Be it income, sales, or some other tax it's not enough in some way. For those folks, why not just calculate the increase you feel is better and personally pay the government the delta? There is no law against it and nothing to stop one from doing it. Don't feel 9.5% in sales tax? Think 11% is better? You have the tools to calculate the delta, pay a bit extra. Want the income tax to go through? Pay out the extra at the end of each year and feel better knowing you're making the government better. For the rest who don't feel that way, we'll keep it to the minimum. Everyone wins!
A flat tax is impossible even if it was a constitutional amendment - the amount of POWER lost is so great that it trumps the constitution and that would not be the first time the "quaint document" was ignored.
Tax policy is used to push many agendas some good and some bad as well as many loopholes that sneak in for various reasons-- unsurprisingly, some good things come at the cost of buying a politician with something bad. Many rich people give to charity simply for the write off and good image - take away their write off and they'd cut back if not stop and the newly rich may never do it (or as much.) Many non-profits would be upset. They are not even the powerful ones.... Ballmer would throw a chair! ..or...worse... or stomp on a kitten! He probably pays less than 10% in taxes while most people here are above 30%. He'd almost double his taxes with a flat-tax system.
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Some taxes may be useful, such as taxing items with "external costs" that harm society; although, corporations (and their believers) prevent us from implementing market-oriented solutions. An example of this would be taxing non-biodegradable plastic bags so that they cost slightly more than paper bags - since they come at an external cost which is difficult to monetize as to how much harm it will cause future generations. Other things can be monetized and those costs need to come into play in the marketplace for it to be able to do anything about it. The market can't do a lot of stuff (sorry, there is no Santa) but the market can't act upon factors which are externalized - in fact, markets tend to trend towards externalizing as many costs as they can--- and its peoples around the world who end up paying those costs sooner or later. Naturally regulation has a place as well-- but in the USA neither regulation or "artificial overhead" are allowed to be intelligently debated.
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Speaking of which, does anybody think Obama can plug that offshore corporate loophole now when he couldn't do it with the last congress? The lost corporate taxes just means smaller businesses, patriotic businesses, and tax payers have to pay the difference.
BTW, corps get a ton of government services and corporate welfare - if they leave the nation they should be billed for services rendered. Most corps who pay for an employee to get training make sure the employee must pay it back or stick around a while --- but for corporations dealing with the peoples' government... its a double standard.
Democracy Now! - uncensored, anti-establishment news
I pay higher income tax, higher sales tax, but my property tax is about HALF Wisconsin and I'm in a major city too. At least in MN, we don't pay sales tax on necessities.
They get you 1 way or another... Me, I want to remove homestead property taxes completely. I am a DIY bargain hunter and in my spare time I could easily make my house worth more than I can afford before my retirement - but say I was retired... it would be even easier to have such a problem. My state is full of small towns who can't afford to run themselves anyhow so they get a sizable chunk from the state...
Sometimes I think we waste 1-2% just playing all these games to fool the selfish voters.
Democracy Now! - uncensored, anti-establishment news
Be sure to adjust that for inflation. That $200k is about $2.5 million today.
upon the advice of my lawyer, i have no sig at this time
i live in washington state, know plenty about this ballot initiative, and most of these comments are ignorant. if they passed the state income tax law (I-1098) it could be potentially be applied to all tax brackets, not just the wealthy. i like the idea of taxing income on the wealthiest however this specific ballot initiative was too broad and left the door open to expand to even low income families.
btw the argument in the article writeup is not even valid. if it did pass, which it didn't, it wouldn't have gone into effect until next year. so balmers cashout of stock doesn't even come into play.
you can keep hating on microsoft, but just make sure you get your facts straight.
-mr silver
Let's see: Every state with income tax screws EVERYONE, including the very poor. All of these states initially sold income tax initiatives as a "Robin Hood" scheme where only rich people would pay up.
43 out of 43 times the lower class and middle class have gotten just as screwed or more screwed than the rich when a state income tax was applied.
*How frigging stupid do you have to be to think that anything would be different this time?*
I live in Washington, have lived in three other states, and it is unbelievable how much more money you take home in a dumb retail job here than you do in a skilled job almost anywhere else. NEVER vote for an income tax!!
> What, in practical terms, are you proposing exactly?
That it's not unfair for the rich (who benefit more) to pay more in taxes. Where on earth do you come up with this crazy stuff about a despotic government taking all of his money? Seriously, where? Who is actually proposing that? It sounds like someone's strawman.
I realize that the existence of taxes forces otherwise fairly well-to-do people to actually *work* instead of being able to become idle rich and that if not for inflation, it would be easier to live with investment growth as your only income stream. But on the whole that's a good thing for the country and even the people involved that it's incredibly difficult to do anything like that.
There's a reason why people with more money than sense (celebrities in particular) are always doing stupid stuff and getting arrested, after all, and part of it is being easily bored and unable to enjoy what you have because you don't need anything. It's a little like playing a game with an "I win!" button: it gets old surprisingly fast.
Every minute I spend during the year saving receipts, working on my income tax return, and spending money on tax software are all taxes that are imposed on me because of the federal tax code. Even though I wouldn't (currently) pay the proposed income tax I bet I would have had to file an income tax form, so they would have taxed me even though I would not have paid any money. If Bill Gates Sr doesn't think he pays enough taxes I bet the state government would gladly accept all of the money he decides to donate. I was very glad that I was in the vast majority of Washington voters that rejected this rotten idea. Hopefully our governor will stop talking about an income tax, and I am very glad that the income tax in still unconstitutional in the State of Washington.
Really? Your superhero ideal does not often match reality. Ever seen what happens when a CEO of a large company REALLY needs to be contacted in a hurry? 24/7 indeed.
You have been watching far too many movies and confusing them with reality.
The 1st was slavery.
http://online.wsj.com/article/SB124260067214828295.html
It says:
" We also found that over these same years the no-income tax states created 89% more jobs and had 32% faster personal income growth than their high-tax counterparts."
For the full story of how beneficial eliminating the US Income Tax would be, see:
www.fairtax.org
Well, Washington won't have to increase their sales tax after eliminating income tax because they never had one in the first place. The sales tax is 6.5% in Washington, with counties adding from 1.5% to 3.5%.
For most states and municipalities, things were going swimmingly before the bust. With revenues up, they double-downed on spending: half-billion dollar schools, $1.5 million city manager salaries. The problem is they refused to cut the fat during lean times.
Even if you believe in Keynesian economics, spending money to promote economic activity is the prerogative of the one government (the Feds) that has a printing press.
I'm not a lawyer, but I play one on the Internet. Blog
1. Inflation means more people are automatically promoted to higher tax brackets.
2. Income tax discourages productive investment. I've never really understood why the government doesn't let you deduct the entire cost of capital investment (new factory, new pizza oven, etc.) from your income instead of deducting a small amount (depreciation) every year.
It's entirely possible for you to spend more money than you take in for a given year, and still be liable for income taxes! Obviously that means you'll do less capital investment, which means less jobs.
Or it means you'll be encouraged to borrow money from banks (and surprise ... that is deductible) instead of growing organically. Which, combined with other government messes, means a diversion of funds toward the non-productive sector (bankers, lawyers, accountants).
Anyway, sales tax eliminates this whole gordian knot. You get taxed on consumption. Production is free.
I'm not a lawyer, but I play one on the Internet. Blog
It sounds like you've given this a lot of thought.
Here's another tax that seems better than the monstrosity of income taxes:
The APT tax (no, it's not a tax on Debian installation methods).
I'm not a lawyer, but I play one on the Internet. Blog
Well, as long as you don't spend it, what use is it to you?
I mean, granted we talk about the rich getting richer, but usually that's in the context of them having all kinds of fabulous luxuries like gold faucets and Porches while the proles make do with leaky lead pipes and clunkers.
But if the rich don't actually spend their money, how are they benefiting from it? And if they don't spend it, it's lying in a bank, increasing the deposits, and therefore decreasing the cost of loaning money. Thereby allowing the poor and middle classes ease of borrowing (for mortgages or small businesses).
I'm not a lawyer, but I play one on the Internet. Blog
Nice ROI. Way to go Balmer.
Every state I've lived in and the Federal government will all let you pay extra if you want to. If you really think that you want to pay an extra $300, do it.
If you can convince all your friends, let them do it to.
If you say, "I meant everyone should pay an extra $300." Then don't try to make yourself sound noble by saying you'd gladly pay, because that's not what you meant.
bill gates was one of the big proponents of 1098
the main reason the measure failed is because after 2 years the state legislature can change the terms of the income tax with a simple majority vote. say hello to income taxes for anyone 'rich' enough to have a job.
You're wrong. High tech companies are fleeing California for low tax states. In fact, high earners inevitably flee high tax states for low tax states:
Here's a comparison between California and Texas that explains, in great detail, how and why Texas is kicking California's ass.. This is also why more than half the new jobs created in the last twelve months were created in Texas. Another reason is strong vs. weak or no public sector unions. One thing that articles notes:
High tech employees are fleeing California for Texas, because they can keep more of what they make, the government isn't going bankrupt, and the roads and schools are now better in Texas. Despite all the money California spends on a a bloated public sector, the actual core services delivered are worse in California than they are in Texas:
Here's a slightly older analysis from 2007. Since then, of course, things have gotten better (relative to the rest of the nation) for Texas and worse for California.
Low taxes and small government create jobs. High taxes and big government destroy jobs.
Lawrence Person (lawrencepersonh@gmailh.com (remove all "h"s to mail)
http://www.lawrenceperson.com/
I-1098 was a rich-person tax. It only applied to people making more than $200,000 per year. But the opposition went to great lengths to convince the public it would soon be amended to include everyone. Thing is, the state's constitution directly prevents such expansion. The opposition flat out fucking lied and the public bought it.
The new income tax wouldn't have come into being over night even if it did pass. By selling all the stock before January, even if the income tax measure passed, even if the capital gains were considered income, Ballmer would not have been taxed on the transaction because of the effective date on the law.
If the timing is politically motivated, it has to do with the expiration of the Bush tax cuts.
america never 'was' as such. there were only frontier conditions, allowing the new entrants to the market to be able to free of domination of established ones. and when frontiers expired, power hierarchy got established again. come late 19th century, almost entire america risked being owned by 4 people. now, it is owned by a group of people through innumerable proxies and conglomerates. nothing has been different. below post illustrates it fine. youre not the first one to use that argument. that 'free' market conditions, freedom of innovation whatnot, has always been an illusion.
http://slashdot.org/comments.pl?sid=1847700&cid=34083272
Read radical news here
This is like having to defend porn in order to stand for free speech. It's the right fight but you need a shower afterwards. Listen, I'd like to see Balmer lose copious amounts of money as much as anyone else, maybe more than some, but that bill would have created way too much collateral damage to regular people in Washington had it passed. It's like taking a hammer to a fly on your nose.
Oliver's law of assumed responsibility: If you're seen fixing it, you will be blamed for breaking it.
Flat rate isn't flat. When you pay $100,000 in taxes, you can afford to pay an accountant $10,000 to save you a third off your tax rate and be ahead.
When you're paying $5,000 in taxes, the accountant still costs $10,000.
Try opening an offshore account in the Cayman islands (and get the money out) if you're on $25,000 a year.
And you benefit from the educated people who work for you (or the companies you own significant share in) whereas the workers only benefit from their own education (and, if anything, lose when others are educated as highly).
Steve Ballmer, for example, will be listened to by senators and all high-power executives. Jenny Housecoat will never get to them (unless there's a photo opportunity in it), so their access is greater.
>or a $2B state income tax-free payday for its CEO
Of course it is the tax free payday. Also, if you could put a full 20% across the line to all residents and companies, with no possible
deductions, so you would lessen the paper work for tax returns, you could also generate so much more revenue, but then they would start going off shore even more, as taxes in dubai are non existent, etc....
I think comparing the stated (but theoretical) marginal tax rates alone isn't necessarily all that useful without taking into consideration the loopholes, deductions, and other changing components of the complicated system.
The Quirkz Handbook of Self-Improvement for People Who Are Already Pretty Okay