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?"

Comments

Re:He wouldn't be paying income tax on that

[fishexe]

Income tax is on income, not capital gains. He wouldn't have been paying income tax on his share sale anyway.

Capital gains are a form of income. Let me ask you this: when you realize capital gains, do you have more money than you did before? Then it's income, because that's the definition of income: money coming in. They're only treated separately from "earned income" by a statutory distinction (particularly in the federal tax code), not because they're fundamentally a different animal. Also, RTFS, "I-1098 would apply this tax rate to all income, including capital gains and dividends..."