Microsoft Pushes For Public Education Funding While Avoiding State Taxes

theodp writes: After stressing how important the funding of Washington State education — particularly CS Ed — is to Microsoft, company general counsel Brad Smith encountered one of those awkward interview moments (audio at 28:25). GeekWire Radio: "So, would you ever consider ending that practice [ducking WA taxes by routing software licensing royalties through Nevada-based Microsoft Licensing, GP] in Nevada [to help improve WA education]?" Smith: "I think there are better ways for us to address the state's needs than that kind of step." Back in 2010, Smith, Steve Ballmer, and Microsoft Corporation joined forces to defeat Proposition I-1098, apparently deciding there were better ways to address the state's needs than a progressive income tax.

Comments

Everyone loves taxes

[srichard25]

Everyone loves taxes when it is someone else paying them.

Re:Everyone loves taxes

[Anonymous Coward]

Everyone loves taxes when it is someone else paying them.

I love taxes even when I'm paying them. What I don't love is people who want the benefits of public services and infrastructure (i.e. civilization) but don't want to pay for it.

Re: Everyone loves taxes

[Anonymous Coward]

Federal waste is a problem. Education funding is not part of that problem. In Washington State, two thirds of school funding comes from the state, and the tax Microsoft is ducking is state revenue. The Feds and bridges to nowhere have nothing to do with this, but MS is refusing to pay its share of the cost for services that it is demanding from the state. It would be one thing if they were using tax loopholes to avoid paying for something irrelevant to them, but the fact that they have their fingers in the pie and don't want to pay for it is as reprehensible as it gets.

Re:Everyone loves taxes

[garyisabusyguy]

Sure, sure it is popular to claim that the government wastes money

It goes back to the Proxmire Golden Fleece Awards where a Senator from Wisconsin would claim to have identified horrendous wastes of money, while the state that he represented (Wisconsin) raked in billions of dollars in milk and cheese subsidies.

Between that and claims of 'Welfare Queens', the political right has played a distraction game to subvert programs like education while lining their pockets with money going to defense contractors and industries in their own backyards

FWIW, education is not a waste, neither are any number of programs that make for a healthier, smarter and more capable workforce. Companies like MS claim that they cannot find the 'right' resources here and that they have to bring in workers from overseas, while they simultaneously subvert the American worker by shortchanging us all when they find ways to avoid paying their taxes

Americans who are not billionaires or corporations need to stop buying into the BS propaganda and start demanding that companies pay their fair share

Re: Everyone loves taxes

[Anonymous Coward]

I went to public high school. I took advantage of what was offered and took calculus, AP credits galore, and more Latin than I learned in college. Sure, ninety percent of the students wasted their lives and learned nothing, but that wasn't the school's fault. The school sure as hell offered to teach those of us who had the personal responsibility and character not to fuck up for four years.

The problem isn't the schools but the population and the parents. Schools can't fix that. Schools can teach reading, writing, and arithmetic, but they can't teach sense, and they can't make the proverbial horse drink.

Re:Everyone loves taxes

[schnell]

Additionally, the Slashdot story is disingenuous (shocking!) when it brings up Microsoft's opposition to Washington proposition I-1098 a couple years back. Yes, Ballmer was a big contributor against the initiative but it was widely unpopular across the entire state, failing at the polls by a 2-to-1 margin.

Quick recap on what that was for non-Washington residents: WA is one of seven US states with no personal income tax. Sales taxes vary by locality, but in general they are higher than average in WA in order to make up for the lack of a sales tax (in Seattle, for example, sales tax is nearly 10%).

I-1098 proposed that individuals making more than $200K/year or families making $400K/year pay a state income tax, with a higher rate applying to those above $500K/$1M. Given WA's economically skewed demographics, the tax would hit many in the greater Seattle area (around the top 3% including Microsoft, Boeing, Amazon, Google, Nintendo etc. employees), while outside Seattle it would be more like the top .01%.

Interestingly, Bill Gates was a visible I-1098 supporter, while Steve Ballmer was a major opponent. But keep in mind the above: the demographics of Washington State are such that had this been an issue of just Microsoft and other big corps fighting it, or "rich Seattle" against the rest of the state which is not so full of rich techies, it would have won handily. Instead, it lost by a 64-36 ratio because voters across the entire state, including a majority of Democrats, thought it was a backdoor way to introduce a state income tax whose threshold would conveniently be lowered by the state legislature whenever it found itself in a money crunch.

So long story short - it may very well be true that Microsoft is dodging state taxes that it should be paying. If so, it should definitely be held to account. However, the fact that Ballmer or Microsoft supported a widely popular anti-state income tax initiative is not related to whether the company is shirking its tax duties.

Re:Everyone loves taxes

[Moof123]

Same here. I am happy to pay my taxes, especially if it keeps the schools funded and keeps old folks out of the gutter. I am sick and tired of way too much of my taxes going to the military industrial complex while the rich multinational oil company's whose interests are served by such mis-adventures sit back and dodge their civic duty to pay their fare share like me.

Please increase my tax rate and properly fund our schools. I am tired of all the badly educated dumbasses, and it horrifies me to see kids only 10 years behind me have to rack up much more debt than I did to go to even a low end college.

Re:Everyone loves taxes

[Moof123]

"Washington would still get the lion's share of Microsoft-based taxes since the lion's share of employees live there, and are well-paid."

What a crock of crap.

My tax responsibility is mine, not my employers. Employers cannot skip out on their taxes just because they have employees who don't have that kind of opportunity. I don't get to argue my way out of responsibility for taxes just because my checker at the grocery store has to pay her taxes. We are all in this together, it is not fair for big enough employers to threaten to leave if they don't get special tax treatment. It is anti-competitive to say the least when the Microsoft's, Intel's, and Nike's get special breaks while the rest of us living in the area have to make up for this tax welfare they get. F' them.

No representation without taxation. Stop letting these moocher companies lobby if they don't pay their share.

Re:Everyone loves taxes

[Moof123]

The pacific northwest is beholdent to a few large companies that use their importance to exert some scary influence on the politics. When these issues come up Microsoft has threatened to move overseas, or to other states. The voters and state/local government falls in line. Same with Boeing, which has moved a lot out of Washington even after getting just about special treatment they could ask for.

Down here in Orygun, Intel and Nike do the same thing. Nike's headquarters is surrounded by Beaverton, but is not part of it because they they have made huge threats to leave if the city tries to annex it into the city, which would result in higher property taxes to help pay for the city services they already benefit from. Intel got a very sweet package during their recent expansion. It is a massive race to the bottom to get and keep these big employers. It is sickening. The rest of us in the area get to pay higher taxes to make up the shortfall, and we have the threat hanging over us that they can crash the local economy and housing prices with it if they make good on their threats.

Re:Everyone loves taxes

[Anonymous Coward]

You mean because they eventually were superseded by the railways system enabled by government-run eminent domain and land grant schemes, followed by the government-planned and funded Interstate highway system and then the advanced civil aviation system that itself could never have existed without extensive subsidization and support by the federal and state governments? You know, after the canals fostered American commerce and growth for well over a century?

Yeah, the government does nothing but waste taxpayer money.

It's way older than that. In the early 1800s people were complaining that government was wasting money on canal infrastructure projects, digging canals so shipping could travel across the US.

You mean the canals that today sit unused?

Re:Everyone loves taxes

[nbauman]

It's way older than that. In the early 1800s people were complaining that government was wasting money on canal infrastructure projects, digging canals so shipping could travel across the US.

You mean the canals that today sit unused?

He means canals like the Erie Canal that turned New York City into the largest port in the U.S., by opening the western U.S. to international commerce. https://en.wikipedia.org/wiki/...

Re: Everyone loves taxes

[Phil Urich]

And knowing they'll always squeeze as much as possible out of us and then decide that another place will bend over even further, why make those concessions in the first place? We need to be encouraging systems that are above subsistence.

Re:Everyone loves taxes

[Jack Griffin]

Please increase my tax rate and properly fund our schools.

We have a political Q&A TV show here, and one time a politician was on there promoting his low tax policies because "no-one wants higher taxes" There was a collective groan from the studio audience and one guy responded, "I'll happily pay more tax if it means better services". This was followed by another, and another which drew applause. The general consensus is the "low tax" promise is purely a political gimmick. If you want quality health education and infrastructure services that most people want, then you have to pay for it, and you pay for it through taxes.
I paid over $70k in tax last year and will happily support higher tax rates dedicated to improving health, education and transport (not defence - $1Trillion on a illegal war? WTF? Those responsible for that should be hung for treason)

Re: Everyone loves taxes

[Lord Balto]

Might not be a bad idea. We should start with shutting down Delaware as a credit card processing facility. And, by the way, the story was about hypocricy, not the finer points of the distorted law enacted by corporate stooges in congress.

Re:Everyone loves taxes

[Lord Balto]

There you go being rational again! Get on board the "We ain't payin' to educate darkies" program and stop whining! Seriously though, it's hilarious to watch all of these anonymous cowards regurgitate the corporate party line like it's the be-all and end-all of American freedom, when it's really just an attempt to justify corporate rule.

Re:Everyone loves taxes

[jpapon]

get back to being a government, not a sociology project.

What does this even mean? Isn't any government a sociology project?

we all see government waste every single day, why would anyone want to give them more money?

Waste is everywhere. In fact, Americans in general are the moste wasteful people in the world. Just look at their energy consumption and refuse production per capita. Just because government is wasteful doesn't mean that we should just abandon it completely. Many of our government services (protection, education, utilities, law enforcement...) we don't have a more efficient alternative for. Yes, you can privatize them, but only at the expense of losing control over them.

Also, private doesn't necessarily mean more efficient. Just look at the US's health care system. It is far less cost-efficient than the public systems of Europe.

Re: Everyone loves taxes

[PatrickNarkinsky]

Must not have gone to my high school.

Re:Everyone loves taxes

[bmo]

YOU can't be taken seriously because most of us out here know what $1TRILLION could have done for infrastructure and education. But no, we've got flag-waving racist imbeciles like you who want to piss it all away on odious shit, like killing brown people, and politicians who will pander to them and suck the cocks of the military industrial complex.

What you don't get is that you've been pick-pocketed to kill people.

Just shut the fuck up.

--
BMO

Re: Everyone loves taxes

[geoskd]

Microsoft is paying for a *LOT*--just via employees rather than corporate taxes. The benefits to Washington State from having MSFT located there are massive.

You're looking at it the wrong way. Most Washington state business are local to the state meaning they have to pay income taxes, sales taxes, etc. The residents are similarly burdened. Then there is Microsoft who is located there, but pays close to zero income tax, almost no sales tax. It unjustly transfers the burdens from Microsoft to those smaller entities who cannot duck the taxes because they are not large enough. The reality is that the benefits that Microsoft brings to Washington state per capita are much much smaller than those brought by almost every other business in the state. Its not like Microsoft is moving that wealth to another state either, they are simply transferring that wealth to the shareholders. Its yet another variant on trickle down (voodoo, or doodoo if you prefer) economics. Our world needs a unified tax code that applies evenly to everyone. No loopholes, no dodges. Everyone pays their share no matter how the company / individuals lives.

My suggestion would be for the united states to make it simple. If you sell one product in the United states, you will pay US tax rates on your income. Period. If you have paid taxes somewhere else, you can deduct that amount from the amount you owe the US, but you cannot dodge paying those taxes somewhere. If a company doesn't like it, they are free to not sell products in the United states...

Similar rules should be made for state taxes, otherwise you get situations like Washington state where they are getting fleeced and don't even realize it.

Re: Everyone loves taxes

[Immerman]

Nothing remotely proportional to the greater amount of damage they do though - if I recall correctly road damage scales with the 4th power of the weight of the vehicle, the first page I found when looking to confirm that referred to a study suggesting a single 18-wheeler does as much road damage as 9600 cars. I guarantee you that their fuel taxes are not high enough to pay their fare share of road maintenance costs.

Re: Everyone loves taxes

[ranton]

The problem isn't the schools but the population and the parents. Schools can't fix that. Schools can teach reading, writing, and arithmetic, but they can't teach sense, and they can't make the proverbial horse drink.

I wish when I was faced with a difficult problem at work I could just say "my users can barely use their computer so its their fault they can't understand my UI". Or some other such nonsense.

Teachers do not have an easy job, but it is their job. The teaching profession needs to come up with real solutions to this, or outside organizations will. It is a very difficult problem so far more organizations will fail than succeed, but we will absolutely need to keep trying. And considering many countries have found ways to mitigate these problems it appears to be a very fixable problem. The funny thing is many of these countries just used good ideas they found from the US and simply instituted them on a national scale.

Re: Everyone loves taxes

[nbauman]

You must have grown up a long time ago, in a school district far away. Today teachers have to buy their own supplies, out of their own personal funds.

http://www.nydailynews.com/new...

Teachers spending $500 out of own pockets for kids' school supplies: union poll
Pens, paper — the basics — are what hard-pressed teachers are laying out their own cash for, says the union. City educrats, with a $24 billion education budget, say, 'hard-working teachers should not have to pay for supplies.'
BY Ben Chapman
NEW YORK DAILY NEWS
Sunday, March 2, 2014, 6:54 PM

City schools are so strapped that teachers are buying the basics with their own money, a teachers union poll released Monday shows.

On average, public school teachers will spend almost $500 of their own cash this year on pens, paper and other instructional materials.

Even with its $24 billion education budget, the city doesn't always deliver the basics, teachers union president Michael Mulgrew said.

"It was the teachers who were holding the schools together -- with the tape that they bought, it seems," Mulgrew said.

Roughly half of 800 randomly selected teachers who responded to the 2013 survey said that their schools do not have a curriculum for the state's tougher new Common Core standards.

Teachers also said the Internet connections in half of their schools were either too slow or too unreliable to support instruction.

City educrats said they were working to get teachers a cash infusion.

"Hard-working teachers should not have to pay for supplies out of their own pockets," said Department spokesman Marcus Liem.

http://abcnews.go.com/US/story...
Teachers Spend Own Money for Supplies
Aug. 31
By Maria F. Durand

Bruce Hogue is always looking for ways to make teaching science more interesting.

But the money he uses for the boxes of Cheerios, Bran Flakes and Total needed for one his experiments usually comes out of his pocket.

“As a science teacher, I have an official budget, but that is usually gone by the beginning of the year,” says Hogue, who works in suburban Denver. “When I want to do a science lab, I usually pay for it all on my own.”

Hogue is one of the millions of teachers across the country who are shelling out their own hard-earned cash to pay for books, pens, pencils and other basic supplies that schools have provided in the past.

Re: Everyone loves taxes

[sumdumass]

You must have grown up a long time ago, in a school district far away. Today teachers have to buy their own supplies, out of their own personal funds.

I grew up in the 70's and early 80's.

Of course I'm not sure what you are trying to get at with the rest of your post. Are you suggesting that every school district within the United States is government by the same loons as one or two school districts in a specific state? Do you realize that it is the state's job to fund schools and often the local political subdivisions do it through property taxes. Do you realize that school districts and even city wide schools are not the same even in the same states or county within that state?

Of course I'm left wondering if this has anything to do with your first linked story.
http://www.nydailynews.com/new-york/education/exclusive-school-officials-lose-356m-special-education-funds-article-1.1912801

Your second link is even more interesting. There you present a teacher who is crying that because he wants to run outside the box and accepted lesson plans, he has to purchase supplies to do so on his own. Sure it would be nice if everything was free, but it's sort of his own doing there.

Re: Everyone loves taxes

[nbauman]

Your second link is even more interesting. There you present a teacher who is crying that because he wants to run outside the box and accepted lesson plans, he has to purchase supplies to do so on his own. Sure it would be nice if everything was free, but it's sort of his own doing there.

What you call "outside the box" is known in affluent districts, and in other countries, as "teaching science."

I later met Soviet emigres who had better-equipped high schools than I did. No wonder they beat us into space. No wonder Sergei Brinn created Google.

Definitions count!

[eyepeepackets]

What do you can it when you put the costs of doing business off onto anyone and everyone else?

Profit!

What do you think they study in MBA school, civics?

Re:Definitions count!

[garyisabusyguy]

Unfortunately most business ethics as taught these days highlight the need to return value to the shareholders over most everything else

They like to highlight ideas like, "how would you feel if your grandmother saw this on the front page", or "think how the cost of criminal prosecution would hurt your company", while simultaneously propagandizing grandma to believe that being a tax cheat is like the Founders of the country, or subverting Congress to reduce the punishments associated with their crimes

If grandma is pleased that you are a tax cheat, and the fines for being one are negligible, there is no barrier in the current world of 'business ethics' to doing it

Re: Definitions count!

[kenh]

"republican-controlled media" - good one.

MS is paying taxes in NV, where the licensing corp is located.

It is not right to say MS isn't paying taxes, it simply is avoiding Washigton State's higher tax rate. I bet if Washington state lowered it's tax rate to equal Nevada's MS would consider relocating MS licensing group back to Washington State... How about it Washington state, do you want the tax revenues or the talking point against MS?

Re: Definitions count!

[im_thatoneguy]

Nevada's corporate tax rate is 0%. That works for a state that is propped up by high roller Japanese business men at the craps table. It doesn't work for Washington State which has a 'real' economy.

Microsoft needs the benefits of a 'real' state economy like Washington's where people can work and live outside of the gaming or US Airforce industry but they want the tax rate of a state who is willing to lose money on every other industry.

Re: Definitions count!

[ultranova]

I bet if Washington state lowered it's tax rate to equal Nevada's MS would consider relocating MS licensing group back to Washington State...

And then Nevada lowers its tax rate to get it back, and then it's Washington's turn again, the end result being that Microsoft pays a nominal tax if any at all. And since that means other people and companies must pay more to make up the difference, their effective tax rate goes up, they do the same, and ultimately all tax burden gets concentrated on those too poor to move. But of course they can't pay, so the state must cut education, infrastructure maintenance, law enforcement, etc. And that, in turn, makes the state an even less attractive location for business.

It's simply another manifestation of the illness that's killing capitalism. But at least the process of decay is fascinating to watch, as pathological patterns become the norm and eat away the structure of society. Sooner or later it's frayed enough that some crisis launches the final domino effect of collapse.

How about it Washington state, do you want the tax revenues or the talking point against MS?

Washington state wants to survive, just like any living thing. Unfortunately, being a cultural organism rather than biological one limits its options, since it must be careful not to discredit the very mythology that justifies its own existence. And in the US, the mythology of the nation has been tightly coupled with the mythology of capitalism. Untangling them or altering capitalism to less toxic form is a job for the prophetic archetype; Washington state can do little but play for time and hope one appears before it runs out.

Of course, the whole reason prophets are so rare is because you always run the risk of being one of those things found wanting and cast out, but at some point the prevalent mythology of the society has been exhausted of its possibilities so there's little choice except to get a new one or die.

Alternatively

[wombatmobile]

“In Venezuela Chavez has made the co-ops a top political priority, giving them first refusal on government contracts and offering them economic incentives to trade with one another. By 2006, there were roughly 100,000 co-operatives in the country, employing more than 700,000 workers. Many are pieces of state infrastructure – toll booths, highway maintenance, health clinics – handed over to the communities to run. It’s a reverse of the logic of government outsourcing – rather than auctioning off pieces of the state to large corporations and losing democratic control, the people who use the resources are given the power to manage them, creating, at least in theory, both jobs and more responsive public services. Chavez’s many critics have derided these initiatives as handouts and unfair subsidies, of course. Yet in an era when Halliburton treats the U.S. government as its personal ATM for six years, withdraws upward of $20 billion in Iraq contracts alone, refuses to hire local workers either on the Gulf coast or in Iraq, then expresses its gratitude to U.S. taxpayers by moving its corporate headquarters to Dubai (with all the attendant tax and legal benefits), Chavez’s direct subsidies to regular people look significantly less radical.”

Naomi Klein

Re:Alternatively

[jcr]

Has anyone told Naomi Klein that the Chavistas have reached the end stage of socialism already? They're out of toilet paper, just like the Soviets.

-jcr

Re:Alternatively

[schnell]

I'm happy as the next guy to pillory Halliburton, which deserves little but scorn for its shocking profiteering in US government contracts. But you probably don't want want to cite dated Chavezista leftie Froot-Loops talking about how the rapidly disintegrating former Venezuelan economy is a model for anything except citizen outrage.

Just ask the folks living in the former Socialist Paradise where condoms now cost $755/pack on the black market because the Bolivar is worth less than toilet paper and it turned out that Chavez was mortgaging his country's future to buy temporary popularity with oil dollars.

Re:Alternatively

[ChunderDownunder]

How did that end up?

Chavez is entombed and inflation was running at 69% as of December.

Re:Alternatively

[Jack Griffin]

A lot of people in the US are out of toilet paper too. You probably just choose to ignore them....

As opposed to....

[Anonymous Coward]

Google pushesf for Public Education Funding While Avoiding Taxes

Apple pushes for Public Education Funding While Avoiding Taxes

Goldman Sachs pushes For Public Education Funding While Avoiding Taxes

ExxonMobil pushes For Public Education Funding While Avoiding Taxes

Koch Brothers pushes For Public Education Funding While Avoiding Taxes.

etc...

I'm all for capitalism but American capitalism was never about Rand's definition. It was about working hard and smart and being rewarded appropriately for your effort. It was OK to be rich as long as you earned it. What's currently going on though is a return to aristocracy rather than meritocracy.

People that richly benefited from our mixed economy are now going on to screw the rest of us because they are in a decision making role. Back in the 50s major CEOs made 50 times what an employee made. Today they are making 500 times. We even have companies like Warlmart that shamelessly depend on food stamps to subside their employees wages. At some point there is going to be major blow back if major corporation continue hoarding all the wealth by evading taxes and paying their employees crap. (as happened to Greece where their own government and elite screwed over their own countrymen)

Monoculture

[dbIII]

That doesn't tell us anything about any sort of "ism", it just tells us the obvious that even when a monoculture, like selling oil, looks like the way to make everyone rich you can still get fucked over when the global market undercuts the cost you are spending to get it out of the ground.

Re:Not true

[Moof123]

Please show me at least one example of a society at any time in history that survived for any length of time without some form of taxation. I think you will have to go back to just about the hunter-gatherer days to find an example. You can leave the country and revoke your citizenship if you want (Yes, we should make this easier to do), but in the mean time I suggest you propose a viable alternative before going all anarchist on us.

Oh boy, where do I start?

[rsilvergun]

Just more personal "personal responsibility" politics that complete ignore reality. Goody. Where do I begin?

Not everyone has the chops to make it through college. Their brains don't work that way. But there's nothing for you in life if you don't make it through anymore thank to outsourcing and a complete lack of protection for local industry. How do these guys whose brains _can't_ comprehend AP credits galore compete with a guy in China working 70 hours a week breathing carcinogens?

Then there's the parents. Half the country goes out of it's way to keep people from opting out of parenthood in any other way than abstinence. Try being lower income and getting birth control or a vasectomy in Alabama and let me know how that works out for you. But once again, "Personal Responsibility" politics to the rescue! Ignore the fact that sex is a basic human drive on par with eating/breathing. Ignore the fact that when you're dirt poor with no hope it's hard to say no to the few sources of joy you have in your life. It's so much easier to look down on the little hussies and the dead beat dads, ain't it? It absolves you from the moral implications of abandoning 70%+ of the populace to their (very miserable) fate.

Schools can fix a _lot_ if we let them. Schools can and should act as parents when parents _can't_ because our God damned society didn't equip the parent with the skills and resources needed to do so. This doesn't mean schools _replace_ the parent either. It means they support the parent. This is what it means to have a society and civilization and not "I got mine, f**k you".