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Protesters Blockade Microsoft's Seattle Headquarters Over Tax Breaks
reifman (786887) writes "A thousand unionized healthcare workers protested outside Microsoft's Seattle offices over its Nevada tax dodge on Friday. Microsoft shareholders have pocketed more than $5.34 billion in tax savings as Washington State social services and schools have taken huge cuts. In a hearing Wednesday, the Supreme Court suggested it may hold the Legislature in contempt and order it to repeal all tax breaks to restore proper funding to K-12 schools and universities." I suspect Microsoft's lawyers are careful to engage in legal tax avoidance rather than illegal tax evasion. Geekwire notes "The South Lake Union satellite facility is not a major office for Microsoft, compared to its presence in Redmond. It’s not clear why the workers didn’t protest at Microsoft headquarters."
I suspect they protested at S. Lake Union because that is very close to downtown Seattle and an extremely visible location. Microsoft Campus in Redmond is in the in a much more suburban atmosphere, it would be much less of a visible protest there.
People don't bootstrap their earning potential or marketable skills from nothing, nor could they continue to prosper without social cooperation made possible by tax-supported infrastructure and institutions. If you want to be a completely unencumbered individual, find a deserted island.
MS just donate to politicians to reduce the amount of taxes they pay
Kinda sort of but not really. What most posters here seem not to understand is that it is 100% normal for companies who employ lots of people in area X to negotiate with that city/county/state's government to say in effect "because of us you have many thousands more people paying property/school/sales taxes and supporting the local economy. Other places would be willing to offer us a break on our corporate taxes if we moved there instead and benefitted their economy. So why don't you?"
On some level this sounds like playing dirty pool but it's really not... it's the exact same thing you would do if you had your employer behind the eight ball in salary negotiations: "Other companies are willing to pay me X for my skills, so why don't you match it or I will leave?"
So long story short, every company with the clout of Microsoft (which IIRC employs >40K employees in Washington State/Seattle Metro area) gets local or state tax breaks that Joe Schmoe's auto garage does not. Apple gets tax breaks in Cupertino, Google gets them in Mountain View, Sprint gets them in Kansas City, Verizon gets them in Basking Ridge NJ. In the greater Seattle area, Microsoft, Costco, Starbucks and other businesses with HQs there get them... Seattle felt the sting years ago of not offering enough tax breaks to Boeing and seeing their corporate HQ relocated to Chicago. (If you're interested to see who's probably getting big tax breaks where, look at the map of Fortune 500 headquarters by city.
So it's rational to give large companies tax breaks to keep them in your city as a way to keep your economy strong. It may seem unfair, but all these cities and states have done enough research to conclude that doing tax favors for these big companies is worth more than taxing them at regular rates and losing the employment. So it's neither illegal or irrational on the part of the government or the corporations.
"95% of all Slashdot
How is it unfair? The state gets additional jobs, higher tax revenues (if applicable), and most likely an economic boost from people spending money.
At the expense of likely quid-pro-quo types of arrangements with politicians. I'm not naive, and I realize that these sorts of things happen in the real world. But every time we rationalize private deals made between big corporations (or rich people) and politicians, we're asking for more corruption.
In several financial and political philosophies, companies provide a net benefit and therefore should pay zero taxes. Therefore, it is your position that is unfair.
Umm, NO. Sure, you're right that some people argue for zero corporate tax. I'm not saying that's an invalid argument. But what's unfair is that if you REALLY want "zero corporate tax," you give it to ALL corporations. That's fair.
What you're talking about is an anticompetitive practice that gives large corporations an unfair market advantage. Say I give a major tax break to a company that employs 10,000 employees. You know who gets screwed? 200 other local companies that each have 50 employees or whatever. Because they're forced to pay the normal tax rates, while your giant corporation is exempt. Sure, most of those companies may not be competing directly against the big company, but some of them might be.
If a state imposed higher than average taxes, and never negotiated, it would lose employment.
And if the state's corporate tax rates are uncompetitive, the FAIR way to fix that is to lower them for ALL corporations, not give an unfair advantage to large corporations that already have many advantages in the marketplace.
Or is your goal to drive local small businesses out of business?
By artificially lowering the tax rates for a few select corporations, you are also allowing the state to continue ignoring a potential problem of too high corporate tax rates for anyone else. Anyone with the clout to negotiate gets the lower rate, while other local small businesses get screwed. That's the exact OPPOSITE behavior of something that will drive tax rates to zero -- because the local tax rates are artificially propped up by the people who can't fight them.
What is fair? You need to define words before you use them. I suppose I should ask, fair to whom? Because that seems to be the crux of your argument.
"Fair" in terms of the law means that we all get to play by the same rules. No one should get to "negotiate" out of abiding by the law. If corporate tax is too high in a state or local area to draw these large businesses, the correct way to fix this is by lowering corporate taxes FOR EVERYBODY. If enough big businesses refuse to move to a state because of its tax structure, it puts pressure on the state legislature to move toward your ideal world of zero corporate tax. If, on the other hand, companies get arbitrary individual tax rates, there's no such pressure, and the only benefits accrue to the biggest companies with the best lobbyists and connections... which is a recipe for corruption and unfair to actual local smaller businesses.