Slashdot Mirror
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
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?!
There's nothing socialists hate worse that failing to get their hands on someone else's money.
While Ballmer may not be a corporate superhero from an Ayn Rand fairytale, I have no reason to believe that he did not work for his money, nor have you presented evidence to the contrary. If he has money that he did not inherit, where do you suppose it came from? Did he steal it? Would you mind pointing to some rich people who did work for their money? Of these, which ones deserve to keep their money and which ones deserve to have it taxed away? Or do they all, by virtue of having more money, need to have more taken away?
Which is exactly what happened with the federal income tax - originally it was just a 1% tax on the "evil rich" and then the government kept taking more and more money from more and more people. It's good to see that the people in Washington learned from history and didn't let the bill pass.
Also, income taxes are a very inefficient form of taxation because it discourages people from working (Economist Gregory Mankiw wrote an article in the NY Times recently about this). Consumption taxes (sales tax) are much more efficient and fair system of taxation.
"The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants." ~Thomas Jefferson
Is that the biggest rat is deserting the sinking ship.
You are lying or out of your mind. A sales tax hurts low income people because they have to spend everything they make in order to live, and every cent they make is taxed. The rich can spend a tiny fraction of their income living in style, and keep the rest entirely tax free.
Anyone moderating his post as insightful is a moron.
So the ones hit the worst are the poor and lower middle class. How is that any better?
Also, income taxes are a very inefficient form of taxation because it discourages people from working (Economist Gregory Mankiw wrote an article in the NY Times recently about this). Consumption taxes (sales tax) are much more efficient and fair system of taxation.
Consumption taxes mostly affect the poor. Why? Because they spend a larger fraction of their income on goods. So in that sense it's a much more unfair tax. On the other hand, concerning the argument that an income tax discourages from working: with an income tax you have more money if you work more. How's that discouraging? Could you expand on Mankiw's argument?
That sounds like part of the Fair Tax proposal. It eliminates taxes for low income citizens entirely.
I'm in favor of the Fair Tax. It's one of the best and fairest tax plans I've seen in my 57 years.
What the OP means is that though popular, the Xbox is in the red for billions. All MS did was buy market share with money. Even with Xbox Live subscriptions it will take 5-8 years before the platform breaks even. Financially, it's not a success story for the company.
Well, there's spam egg sausage and spam, that's not got much spam in it.
So what are you proposing? Some kind of Federal Council of Does-He-Really-Deserve-That-Paycheck? Would it say "yes" to Tiger Woods and "no" to Ballmer? How about Oprah, does she deserve her payday?
Or maybe Ballmer is the *only* one the Government should get to make that decision about? Single out a single person? That's Democratic, right?
What, in practical terms, are you proposing exactly?
Comment of the year
You, moron, need to read the national fairtax bill. It reduces the taxes on the poor to absolute 0. If you make below the poverty limit, you get a 100% refund of the taxes, with an increase for each dependent. If you did not work at all this year, you would get a refund of taxes up to the poverty limit, as if you had worked (the same refund, for doing nothing). So your argument is null. Under that tax system, the poor would pay absolutely nothing, and would even get paid, if they didn't work.
Now if you are rich on the other hand, the tax would apply to all kinds of luxury expenses. Buying a ferrari? Well then you are paying 23% of the purchase price in a tax. Buying a plane? The same.
By all means, keep supporting the progressive tax system. I will be more than happy to make millions I can keep shifting through tax loopholes because you are unwilling to close them. The reason a consumption tax is better, is because you can determine your tax overhead at the beginning of the year. No need to manage taxes for your employees paycheck, figure out your deductions, find tax credits, buy your car with your company, buy your vacation home as a company asset. It would no longer matter, because all of these things would become moot points. You would pay taxes on them, end of story.
It's a shame that you started an otherwise cogent retort with 'You, moron', because that typically makes people tune the rest out. Try civil debate sometime; you may find that you get better results.
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.
This is actually total horseshit. For most high-paid jobs that end up in the top brackets, there are way more people willing to do the job than positions available. No-one's going to turn down a seven figure paper-shuffling job because they only get half of it.
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)
So his argument is that consumption taxes encourage saving money. But that makes it even more unfair to the poor who don't have money to save. Rephrasing his argument: people who can afford to save money can gain more with a consumption tax than with an income tax. In other word, it's a gift to rich people. Which was exactly my first point.
As for the second point and your reply (your sister). I would wonder if it's not actually a gain in quality of life for her that working overtime is discouraged. Her boss certainly won't expect her to do it if there's nothing in it for her. Maybe he'll hire another person -- it will certainly be cheaper for him to hire another person than to pay your sister adequately for the extra time if your numbers are correct. I.e. everybody benefits, it seems. And if she actually enjoys working so much and my point concerning quality of life doesn't hold, then she will certainly also enjoy working overtime without compensation ;)
Lastly, yes, if people benefit extraordinarily, I don't see why they should not also contribute extraordinarily (your point about the taxation quantiles).
Basic accounting says that if you are in the red for $7-8 billion during the first 7 years of your existence, $1 billion profit in the last 3 years means that you are still in the red.
Well, there's spam egg sausage and spam, that's not got much spam in it.
There's an even more pressing concern. The income tax proponents state it as only taxing the rich (i.e. 200k+ income per year). Just like the AMT in federal law, though, it is not indexed for inflation. So even if the state legislature left it unmodified by some miracle, people would start falling into the tax trap.
Anyone who believes we're not in for some massive inflation is in a fantasy world. The Fed is printing money left and right.
Sigh, it always amazes me that people are this willfully ignorant.
Fair tax isn't what they're suggesting. This is a way of allowing Billionaires to pay even less tax than they do currently. Under it you'd pay absolutely no tax on investment income or income of other sorts. Meaning that as long as you don't spend it you don't pay tax.
The problem with that is that at some point somebody has to pay taxes. This is the same sort of incompetent tax policy that the GOP has been pushing for years. Cut your taxes and then we'll all have more money. The problem is that you can't cut taxes and have an out of control military budget. You get one or the other, not both.
The best plan I've heard that we could reasonably see implemented was Steve Forbes' flat tax proposal. The tax as I understand it is actually lower than what most folks pay now, with generous rebates for people in lower income brackets that are behaving responsibly.
Run the numbers for Fair Tax over a longer term period. It continues to shift wealth to the wealthy, further increasing the income disparity between classes in our nation. The bottom line is that money makes more money, and the only way to stabilize disparity is to raise taxes on those with more money. I'd be happy if we could keep the ratio of class wealth consistent, instead of watching the rich get richer and the poor get poorer.
I think you'll find that this is impossible. Richie Rich has a billion dollars and makes 20 times more interest in a year than he spends. His net worth goes up over time unless you tax him at over 95%, and if you do anything even resembling that, he moves to a country with a lower tax rate. Joe Sixpack makes $35,000/year and spends all of his after tax income, regardless of whether his tax rate is 100% or -100%.
The trouble with class warfare is that it isn't really a war. Poor people are never going to have as much money as rich people short of some communist utopia. The goal should be to benefit everyone, not some poorly planned "redistribution of wealth" zero-sum game. Measures aimed at punishing rich people rarely do anything other than screw over the middle class (see also: Alternative Minimum Tax not indexed for inflation) and thereby push more of the middle class into the ranks of the poor instead of the opposite.
You don't need to tax them at higher rates. Percentages already do that. Just tax them at a flat rate.
Do the math. You get taxed 10% on $25,000.00, they take two thousand, five hundred bucks from you. They tax some rich person at 10% on twenty million dollars, and they take two million dollars from them.
Flat tax, two people contributing, one is you at about two thousand, five hundred bucks the other is the rich guy at two million dollars. Total is two million, two thousand five hundred dollars. Of which YOU paid about 1/800th of the total. Say they build a highway from this taxation. Now you and the rich guy can drive on it. Does that feel like you're not "redistributing the wealth"?
Isn't that enough, without the rich guy paying an even higher percentage?
You're certainly entitled to your opinion, but me, I'm not rich, yet a flat tax rate seems pretty severe already, and I'm perfectly satisfied with it. The problem as I see it is that the rich aren't paying that rate. Look at what Google just paid in taxes. And it's perfectly legal, by which I mean to say it's perfectly broken.
I've fallen off your lawn, and I can't get up.