Not Just Apple, How Microsoft Sidestepped Billions In State Taxes

reifman writes "Apple's not the only company to save billions in taxes through Nevada as The New York Times reported yesterday. Here's how Microsoft's saved $4.37 billion in tax payments to Washington State and how it's led indirectly to $4 billion in K-12 and Higher Education cuts since 2008. 18% of University of Washington freshman are now foreigners (because they pay more) up from 2% six years ago. Washington State ranks 47th nationally in 18-24 yo college enrollment and 48th in K-12 class size. This hasn't stopped the architect of the company's Nevada tax dodge from writing in The Seattle Times: 'it's [Washington] state's paramount duty to provide for the public education of all children. Unfortunately, steady declines in public resources now threaten our ability to live up to that commitment.' Yes, indeed."

Comments

what about slashdot?

[larry bagina]

Does geeknet, Inc. pay accountants to minimize their tax burden?

US its own worst enemy

[countach]

It seems to me all the states are in a race to the bottom to make big companies come to their state. The end game is nobody pays taxes, because states are too afraid of losing companies in their jurisdiction. The only way out is for all the states to gather together and put an end to these races to the bottom.

Re:Perfectly fine

[Concerned Onlooker]

Why is it that when CEOs are payed ridiculous compensation packages people say that "to attract the best talent you have to pay," but when it comes to teachers people say "they should be doing it for the love of it, not the money."

Re:Do you want MS to relocate more workers to Indi

[Karmashock]

They're not defacto rulers. They just pay an internationally competitive tax rate.

Forget what you think the tax rate should be... what is the most you can charge before the companies leave the country.

Not only do companies need to offer competitive prices to make sales... countries need to offer competitive tax rates.

That doesn't make the companies the rulers. It merely forces you to be reasonable. If doing business in your country costs the company more money then other places then it isn't reasonable.

Companies will take a zero sum of the whole thing. So if you want higher wages, that's fine... it just gets added to the total cost of doing business. You want to offer healthcare to people? Again, it just get added.

Every time you add something it reduces the amount you can take in taxes before you cross the line and it becomes cheaper to do business elsewhere.

So be careful with it. If you want the tax money, you'll probably have to make doing business cheaper by skimping on something else. Maybe loosening regulations. Maybe making labor cheaper. Whatever. But if you make it too expensive to do business in the US, they'll leave.

Game over. Then you get ZERO in taxes. They are out of your jurisdiction so the regulation is irrelevant. And labor policies are also irrelevant because everyone is unemployed.

It's a balancing act. Don't cross the line.

Re:As a University of Washington student...

[MightyMartian]

Even if I believed you (and claims like these are a dime a dozen on the Internet), it's at best an isolated case. Teaching yourself PHP is hardly brilliance. Anybody can do it. Teaching yourself to code well, that's a whole other ballgame. The mere fact that you didn't say "I taught myself C++" or "I taught myself Java", but in fact, picked out a language that could best be described as the BASIC for the 21st century suggests to me that your proof of why higher education is needed, not why it isn't.

I'll wager you're the kind of talentless hack that I have to clean up after. I was paid by the hour by a friend of mine's company to fix up a PHP catastrophe coded by some assholes who actually got away with $40,000 for a site that violated every notion of security and best practices. I made $20,000 on it, so by your calculation I'm the talentless chump, but by any reasonable standard, the assholes who ripped off a company for $40,000 for a product that wasn't worth taking a shit on would have been the talentless ones.