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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."
Does geeknet, Inc. pay accountants to minimize their tax burden?
Do you even lift?
These aren't the 'roids you're looking for.
While I oppose the kind of tax dodges that Apple and Microsoft are up to ... I cannot say that any of the problems in this state would be that much better if Microsoft paid all the taxes possible here.
Our local government seems amazingly incompetent.
Since we're taking on the tech giants, here's Google.
Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes
http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html
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.
I'm shocked....shocked, I say! Billion dollar companies hiring lawyers to create, and then exploit tax loopholes for their own (and their shareholders') benefit? There ought to be a law...oh wait!
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."
http://www.rootstrikers.org/
They're using the infrastructure in Washington aren't they?
As someone who has physically visited Microsoft's "Nevada Tax Dodge", I can tell you that they have hundreds of people employed across three office buildings, doing real work. Here's a street view: http://maps.google.com/maps?q=microsoft+licensing,+GP&hl=en&ll=39.466978,-119.777091&spn=0.014196,0.027874&oe=utf-8&client=firefox-a&hq=microsoft+licensing,+GP&radius=15000&t=m&z=16&layer=c&cbll=39.465765,-119.778911&panoid=SCavTRVJLjF335ijk_l6-w&cbp=12,0,,0,0 The white buildings to the left and right of the frame are wholly occupied by MS while the brown building in the center has one whole floor occupied by MS employees. Declaring that MS has no right to do business in states where taxes are lower is...well, disgusting.
What do you think Microsoft owes you, and why?
-jcr
Because MS uses the infrastructure and expects the rest of us including its workers to pay for the right to work. Where I come from that is slavery when you work for free. True the student should pay for some of it, but MS is the benefactor in recruiting CS students from U of Washington. Infact, U of Washington is cutting its computer science program from lack of funding.
Who gets hurt now? Not the students but Microsoft. It is also not fair for Microsoft to soley pay either as its a public good that benefits other employers in the area and a level tax keeps it fair that everyone pays and benefits.
Businesses use roads to ship products, uses the military to keep the world safe to do business, businesses benefit the most from IP laws, and free trade. I would even say they benefit a lot more than you nor I. IP laws and free trade hurt us more than anything. It is there to benefit employers who do not pay for it but expect it others to pay for it then go in a right wing circle jerk about the evils of welfare moms when they are the worst ones.
MS did the right thing by avoiding taxes as an individual corporation. However, the loopholes need to be closed. Austerity will come to the US soon and you and I will end up paying for things your employer uses through forced higher taxes.
http://saveie6.com/
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.
I've decided to stop wasting my time responding to AC trolls/sockpuppets... so if you want a response from me... login.
Because those people are ignorant, either naturally or deliberately, and think that somehow their own upbringing wasn't just as subsidized by the nanny state they bitch about as anyone else that grew up in a first-world country.
They were all raised by wolves in the forest and had to fight to the death for every bit of sustenance in their lives, didn't ya know? Remember the movie 300? They grew up like those guys, except for without the helots that made it all fucking possible.
In other words, they're full of shit and just don't want to pay it forward now that it's their turn to do like their parents and everyone before them did.
College is for the unmotivated or those who have to be spoonfed their information.
Yeah, you're right.
Let's all hope all the medical staff you ever meet isn't self-taught.
Or that building you live in isn't designed and made by a self-taught architects and builders.
Or that your car, computer, mobile phone, blender, pace-maker etc. are not products someone who's self-taught banged together in their garage out of bubblegum and lint.
Mit der Dummheit kämpfen Götter selbst vergebens
Make tax payable at the same rate everywhere. Simple.
Jonathanjk.com
For the most part they're just greedy assholes who think they've found an ideology that can justify what is nothing more than pure, unadulterated selfishness.
The world's burning. Moped Jesus spotted on I50. Details at 11.
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.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Psst, they profit off of my labors, or else I wouldn't have the fucking job in the first place. So clearly, they're getting a little something out of the arrangement, too.
Oh, sorry, is that not properly deferential? Or are we going to suspend all logic and pretend that these guys hire us out of civic virtue alone?
The guy is bragging himself up as a self-taught PHP programmer. That ought to tell you all you need to know. Belief that he actual makes $150k per year is optional.
The world's burning. Moped Jesus spotted on I50. Details at 11.
A Nevada C corporation costs about $475 a year including renewal fee, resident agent, PO box, and business license.
So, everyone everywhere in the USA should incorporate themselves and their family, register themselves as a business in Nevada and the playing field is level again?
I'm not sure that it would work QUITE like that, nor that the IRS would simply shrug their shoulders "We are powerless, alas!" and just let it slide.
I mean... with all due respect, somehow I doubt that you're the first person who came up with that idea and yet it does not seem as if everyone is using it.
I'm guessing that it's cause they are all dirty commie pinko socialist tax-paying bastards.
Mit der Dummheit kämpfen Götter selbst vergebens
The only ones to blame, are not Microsoft who followed the tax laws, but the poltiicians who failed to REWRITE the tax laws such that MS and other corporations would have to pay on all their income (since they reside in washington).
Failed to REWRITE the tax laws?
I see you are totally unfamiliar with Washington State tax policy.
The state has bent over backwards giving concession after concession to Boeing, Microsoft, Starbucks, Amazon, to keep them from moving out of state lock stock and barrel. Not only have the rewritten the tax laws, they have done so repeatedly and done so in a manor that these companies qualify for special exemptions, carefully worded so as not to call attention, but exemptions that realistically can only be taken advantage of by these big companies.
See http://dor.wa.gov/content/findtaxesandrates/taxincentives/incentiveprograms.aspx for a partial list of highly preferential tax dodges.
Once passed, these tax breaks are never subjected to a vote again.
Sig Battery depleted. Reverting to safe mode.
As long as teachers are paid with tax and/or fake inflation money, the people who pay these taxes should be against them.
"us" vs "them" ? Like it is a war, against them, the teachers, nurses, firemen, policemen, soldier, politician ? ... and all the big and not so big companies get boatload of money from the government either directly through contract or indirectly through customised regulation. It also us vs them, the employee of the top-500 companies including their CEO.
...) to them.
Wait, Microsoft, IBM, Boeing,
And the bailout ? Add all the bankers and all their support people (it, pa, cleaner,
It starts to be pretty crowded on the "them" side.
And, those states that choose not to tax Microsoft, Apple, and others reap indirect benefits from having big business conducted in their state.
And what are these "indirect" benefits? From TFA -
The company decided to open a small Reno, Nevada office to dodge the tax completely.
And from the Apple article a few days back -
Yet, with a handful of employees in a small office here in Reno, Apple has done something central to its corporate strategy: it has avoided millions of dollars in taxes in California and 20 other states
So it's not job creation - there are only a handful of employees in each office. There's no taxes to collect from the corp. and a relatively small amount from income tax from the employees. It looks like MS and Apple are just using Nevada and really giving little back.
This thread is not about federal taxes. It's about state-level taxes. Incorporating in a state allows principles in an enterprise to protect their own assets against litigation and other liabilities while still operating the business. If they have a good accountant, it can also be a way to legitimately reduce federal income taxes, however it can open up the company to considerably higher state and local tax liabilities in some jurisdictions.
Incorporating in a DIFFERENT state that does not have corporate income taxes, B&O taxes, or other impediments to business is a way to minimize the costs of running the enterprise by legally doing an end run around location-based taxes.
Incidentally, MS has physical facilities all over the state of WA, not just in Redmond. They pay more in property taxes ever year than most people here will ever see in a lifetime. Public Education in WA is primarily financed by property taxes and to a small extent, by the state lottery. The parent article is just alarmist election-year bullshit. There are a million legitimate reasons to be pissed at Microsoft. This isn't one of them.
Nothing worthwhile ever happens before noon
I'm going into teaching. I just finished student teaching, I'll have my certificate for Secondary Ed within a month or two. The *minimum* salary I will be paid is clearly posted and easy to find. There's really no excuse to complain about your pay when going in you know what you're getting into. Schools are free to pay teachers whatever they want above the minimum and many do. Teachers are paid middle class income. If you don't want to earn middle class income, then find a different profession.
And yes, teachers actually have to like their job because if the teacher isn't enthusiastic about what they are teaching, the students aren't going to be enthusiastic about what they're learning. I've been living on 30K for the last few years with a nice house, a decent car, etc. The minimum teacher's salary with my credentials is actually a raise so no, I'm not complaining.
Teaching is not a revenue generating profession. CEOs can quantify their value in real dollars and that's how they get paid. On top of not generating revenue, teachers are barely being ranked on results. By what objective metric can we say that a particular teacher deserves X amount of dollars? Currently we just lump all teachers together and refuse to acknowledge teachers as individuals. Any attack on a particular crappy teacher is turned into an attack on all teachers.
So until that changes, teachers will be paid a decent middle class income. And no, they have no room to complain about it unless they want to change the collective mindset into an individual mindset.
Work Safe Porn
I would argue that avoiding taxes through legal maneuvering inconsistent with the law's intent is not an ethical means of satisfying a corporation's fiduciary responsibility to its stockholders.
Corporations are "persons" legally distinct from their owners. As such, the way it's supposed to work is that both the corporation and the stockholders are taxed for their particular incomes as individuals. If that seems unfair, then perhaps corporations should not be treated as persons under the law?
"In prison you just have to shut your eyes and take it. Here you have to shut your eyes and give it."
I would argue that the Bill and Melinda gates foundation is far more efficient at getting money to people who need it than any government that collects taxes.
I think if you did the sums you'd find every dollar that Microsoft pays its shareholders does more public good than every dollar they pay in Tax.
A corporation, in its IPO papers, and subsequent SEC filings, clearly defines what its goals are. You're entirely mistaken if you think that every publicly traded company must "save money and maximize shareholder ROI". It's a common misconception. Stop repeating it.
A successful API design takes a mixture of software design and pedagogy.
Tax avoidance is not unethical. It is in fact legally required of publicly held corporations who must operate to the maximum legal advantage of their stockholders.
I think is could be unethical at times. If the company takes from the community (using city services, etc) and does not put back much of anything, it harms the community. In the short term it looks good on the books, but in the long term, I believe it can harm the company, by harming the community. For an example, the students in town have a substandard education because of a lack of revenue. After several years of substandard education the word gets out and the company has trouble filling positions in that town. Maximizing revenue can be short sighted and unethical. Companies should support the cities, states, and countries where they do business. In the long term, it hurts them if they don't support their communities.
You can say that about nearly every job out there.
Doesn't mean that some effort shouldn't be made to evaluate workers and eliminate poor performers. Its clear that all systems aren't perfect, but no system at all is far, far worse.