Microsoft Offers Washington a Bargain: More State Taxes, For More Education

reifman writes: The Washington State Legislature and its budget is a complete mess this year but there's been an unusual bright spot which may quiet the protesters Slashdot reported earlier: Microsoft has volunteered for an exclusive $28 million annual tax — as long as the state funds a number of computer science degree programs. Visions of these faded after the 2008 recession when the legislature cut $4 billion from K-12 and higher education spending in part to cover the coming legalization and amnesty for Microsoft's Nevada tax dodge (students' tuitions only increased 58.6 percent.) With Microsoft's voluntary tax, the company will have fully repaid its $8.75 billion tax dodge by 2327, just 312 years from now.

Comments

Very similar strategy to Cisco

[Ravaldy]

Cisco for a long time inserted itself in schools by providing major discounts. They figured that if you train people to use and love Cisco, they will grow up buying Cisco. It's the common case of buy what you know. I did it, you did it and well all do it again.

Re:Very similar strategy to Cisco

[Penguinisto]

The only thing I worry about in this case is if Microsoft goes one step further and ties a "use Microsoft products exclusively in the schools or no deal" string to that money/tax bump.

Re:Very similar strategy to Cisco

[SvnLyrBrto]

Apple does it too. IBM used to do so (when they still made PCs & AIX workstations). Juniper does it at the community-college level. And, back in the day, you used to see a LOT of Sparc/Solaris machines in academic settings where they were definitely overkill.

Nothing sinister here.

Re:Very similar strategy to Cisco

[gfxguy]

How is making a favorable business arrangement "cheating?" Did they commit fraud somehow?

Re:Very similar strategy to Cisco

[MachineShedFred]

So it's cheating for schools to get the equipment that they need in order to teach technology, and the businesses to get something for the steep discounts they are offering the equipment at?

Sounds like a win for all sides to me.

Re:Very similar strategy to Cisco

[maccodemonkey]

The only thing I worry about in this case is if Microsoft goes one step further and ties a "use Microsoft products exclusively in the schools or no deal" string to that money/tax bump.

This is Washington. A lot of schools already exclusively use Microsoft products. But, to be fair, I don't think Microsoft is as bad as you think in this regard. When I was in school in Seattle (during the Dark Microsoft Times) I had a class where Microsoft had paid for a room full of iBooks.

Re: Very similar strategy to Cisco

[Penguinisto]

Like Germany, where they spent $14 million to save $11 million?

Guessing they'll save a lot more than that in the long run - mostly by not having to re-up a massive Microsoft EA multi-million-euro contract every 3 years or so...

In other words, you've fallen for the same short-sighted 'next quarter' BS that the MBAs tend to fall for. Look further out...

Socialize the costs, privatize the profits

[Anonymous Coward]

Microsoft has cleverly figured out that it can spend $28 million to A) increase competition in the CS grad job market, thus driving down the cost of employees, and B) offload the costs they would incur training hires over to the state. How clever.

I wil pay my fair share

[fermion]

If the personal belief exemption for vaccines is outlawed. Otherwise I will throw a temper tantrum and use the equivalent of the taxes I should owe to hire lawyers to litigate until I turn blue in the face and the state gives up

Re:I wil pay my fair share

[rahvin112]

The only problem with your plan is that failure to pay taxes is criminal not civil. For all your strong words, when you are looking at a decade in jail you will settle just like everyone else does.

And if you are famous or will get newspaper articles written about your prediciment you will still go to jail, just ask Wesley Snipes. He followed the advice of one of those tax crackpots and he went to jail for 3 years, even after buckling under to the government and paying back everything he owed plus the interest and penalties. The guy that convinced him to do it? 17 Years in jail. The IRS has their own courts and you are guilty in those courts unless you can prove otherwise.

Messing with the IRS is very foolish.

Re:Opiniated "article"

[Opportunist]

I'd have said passive-aggressive. But if the shoe fits...

Compartmentalize the budget

[Karmashock]

The thing I find the most annoying about budgets especially at the local level is that when money gets tight they'll always raise money for "schools" or "police" or something when really the cost over runs are because of something completely different.

And instead of cutting spending where it got out of control... they instead jack up taxes for "the children"... and then divert all that money to some other project.

I've even seen tax bills written such that that was specifically supposed to happen... and they looted the fund anyway in contravention of the law... and who is going to prosecute? Not the AG.

I think we might need a fourth branch of government that does nothing but hold the other three accountable.

Anyone ever read Herbert's the "Whipping Star" or its sequel? It has this concept in it... he called it "the Bureau of Sabotage"... they did nothing but fuck up the other branches so they couldn't pull any tricky slights of hand, fuck over the democratic system, break the law, etc... the bureau slowed the other branches down... so that they couldn't subvert due process.

Something like that at every level might fix a lot of our problems.

People would point out that that would be expensive... I would would ask... more expensive than rampant corruption and subverted law?

Re:Compartmentalize the budget

[Karmashock]

I appreciate what you're saying... but the confederacy really fucked that up by citing state's rights as a justification to sustain slavery.

The other thing that really fucked up state's rights was the change to the senate. The senate used to be elected by the states themselves. Thus the house was a democratic body where people would vote on the basis of population and the states themselves had to approve things for it to become law.

Now the senate is basically the same as the house.

Here is how I would fix the problem, most federal power grabs involve money. Typically what they'll do is say "do what we want and we'll give you this money"... but if you don't... we'll still tax your people for it anyway. So the only way you can actually get your money back is to agree to what ever the feds want.

My fix for that issue would be to require the feds to proportionally lower the federal taxes of people in given states that had opted out of given programs.

That would take the leverage away from the feds. They would be in effect saying "do what we want and we'll tax your people X amount and give you back a fraction of what we took"... or "you can just opt out and neither receive nor pay for it."

THAT is something you might get through congress. And if you did, it would break the back of the federal extortion racket.

Will it happen? No. Liberals have no interest in it and conservatives generally don't think long term or strategically. Which is why the democrats have been dominating the republicans for decades.

The republican politicians are mostly sell outs or idiots... and the rank and file think being stubborn or pigheaded is a virtue.

I say this as a libertarian. I'm ostensibly political allies with these people. But they're just so f'ing easy to trick, distract, misdirect... they're just so stupid. The democrats aren't any smarter... they're better at playing the game... they at least know its a game. The republicans don't seem to understand what is even going on most of the time.

Its all very frustrating. All I want personally is to be left alone.

I don't want to control anyone. I don't want to tell anyone what to do or how to live their lives. Do whatever you want. All I want is to be left be.

A few comments

[Anonymous Coward]

Would Microsoft really leave the state if the legislature decides to end the exemption/whatever that allows such a tax dodge?

As for this "voluntary tax", I sort of want to say, "No, unless it can be spent how the state pleases. Otherwise, donate it directly to the schools in question."

The job of the press is accountability

[sjbe]

I think we might need a fourth branch of government that does nothing but hold the other three accountable.

We have that - it's called the press. Combined with an informed electorate it's pretty effective in the long run. It's not official in the government but you really don't want it to be. An official branch of government that isn't accountable itself is called a dictatorship. I'm pretty sure you wouldn't like that.

Re:The job of the press is accountability

[TheGratefulNet]

#include "notsureifserious.jpg"

you cannot be serious. the press are 100% owned by the powers that they should be reporting on. we have no honest or free press anymore, at least not in the english speaking countries that I'm aware of.

Re:The job of the press is accountability

[Karmashock]

No. They often as not write puff pieces for the administration. I mean do I need to show you the emasculated press in a kindergarten pen at a Hillary rally?

http://www.huffingtonpost.com/...

They're not the bureau of sabotage. The Bureau would do something so horrible if a politician tried that that they would never try such a thing again. I mean... I don't even know what they would do... but that would be a declaration of fucking war. The bureau amongst other things had additional rights under the law so they were shielded from a lot of consequences if they screwed something up for another branch. They could whistle blow for example without being in any danger of prosecution.

You have to keep in mind they would doctor records just to fuck with other people in government. They were this organization consistently maintaining a fixed ratio of urine in the lobster bisque.
https://www.youtube.com/watch?...

It's not a dodge.

[SvnLyrBrto]

I despise Microsoft as much as anyone. But it's, at best, a strawman (non-)argument to call them a tax dodge or to claim they owe your hypothetical billions. Tax evasion and tax avoidance are two entirely different things. Learn the difference, and maybe you can sit at the adult table.

If you think the tax laws are broken, advocate for whatever changes you think are appropriate. But if you're going to attack someone else for not paying more tax than they are legally obligated to; then put your money where your mouth is, file a new W-4 with an extra $1000/cycle withholding yourself, and don't cash the refund check when it comes to you next year. I'll bet a dollar that says you won't though.

Re:It's not a dodge.

[OhPlz]

This comes up in Massachusetts every so often. They have the normal rate for income tax but they also have an optional higher rate if people want to contribute more to the state government. So what happens? When people start calling out for people to pay more to support the schools or other issue of the day, the media starts pulling tax records and pointing out that those same people did not elect to pay more themselves.

Or even more hypocritical, someone took a picture of a state legislator license plate from Massachusetts at a New Hampshire liquor store. The legislator had just voted to up the tax on alcohol in MA and was evading it by buying in NH. So it's okay for others to pay more, but it's not okay for the people complaining the most to voluntarily pay on their own.

Re:It's not a dodge.

[im_thatoneguy]

it's, at best, a strawman (non-)argument to call them a tax dodge or to claim they owe your hypothetical billions. Tax evasion and tax avoidance are two entirely different things.

They said Tax Dodge. You even posted Tax Dodge, then you transformed it into "Tax Evasion" which nobody else said and burned the strawman that you built. That's a nice slight of hand you tried to pull there. Nowhere is the word "Evasion" aka an illegal tax dodge used in the article or the summary or the headline.

However, I disagree with the principle of what you said, even if they had said "Tax Evasion". Considering the amount of lobbying and corruption that multi billion dollar a month corporations wield over governments, it's perfectly fair to say that even if you legally evade taxes, it's still tax evasion when you are the de-facto rule writer for yourself. Following the letter of the law while violating the spirit of the law means we can still judge the company as an asshole even if they are following what's written in ink.

Re: It's not a dodge.

[Anonymous Coward]

It is not hypocritical. Anyone can also donate to the US Treasury, but calling for higher taxes (on everyone) is not hypocritical if you do not also donate.

I think my taxes are too low, I also think rich billionaires tax rates are too low too (their tax rate is lower than mine). I do not "donate" overpayments to the IRS. I do not think this is hypocritical in anyway.

I also do not consider the rich billionaires as tax cheats if they are paying the minimum required by law. I want the law changed.

Re:Opiniated "article"

[Anonymous Coward]

> Whats with the ironic tone used in this "article"?

I'll give you the benefit of doubt. Maybe you're a 12-year old or something.

M$ pays taxes, provided they go for "Education", in reality computer classes. Which need computers with OSes and applications.

Last time M$ was convicted, it paid in software. Their software. With their prices.

You know, if someone thought this up, it would be prime material for a James Bond movie. Anyway, that's how it turned out. No point in calling paranoia something that already happened.

New M$ my ***.

But I'll admit that Nutella guy is cool. Not cool enough to turn the Titanic though...

It most certainly is a tax dodge.

[sjbe]

But it's, at best, a strawman (non-)argument to call them a tax dodge or to claim they owe your hypothetical billions.

If they took extraordinary action to avoid paying taxes while still staying within the letter of the law then they ARE dodging taxes. Any argument otherwise is merely equivocation.

Tax evasion and tax avoidance are two entirely different things.

Just because something is legal doesn't make it right. And I don't buy your argument because it is basically a "might makes right" argument. Just because they have the ability to hire lots of lawyers and accountants to do clever tricks avoiding taxes does not mean it should be acceptable. Finding clever loopholes that force others to make up the slack in civil society is not something to be applauded.

But if you're going to attack someone else for not paying more tax than they are legally obligated to

I'm not. I'm attacking them for paying less than they are ethically obligated to. I don't care for a moment that they aren't technically breaking the law. The fact that the laws were imperfectly written does not excuse their behavior. I assure you that I am paying a FAR larger portion of my income in taxes than Microsoft is AND even if we paid the same percentage Microsoft would feel less financial pain from doing so. So until Microsoft starts paying an amount of tax that hurts them as much as what I pay hurts me your argument is bogus.

Re:It most certainly is a tax dodge.

[magarity]

I assure you that I am paying a FAR larger portion of my income in taxes than Microsoft

Yes, you are paying a far larger portion than ANY company. But do you know why? Because no company has ever paid a penny of "their own" income in taxes. Their taxes are baked into their prices. You pay their taxes for them. Estimated taxes are part of the structure determining price: 1: Cost of materials 2: Cost of labor 3: Cost of capital 4: Cost of taxes 5: Cost of profit (the company's own income) 6: Cost of selling 7 - N: etc.
Saying companies ought to pay more in income tax is the same as saying you wished they charged more for their products and services. Income taxes at all levels are really just paid by the last level that can't pass it on to a customer downstream.

Re:Opiniated "article"

[SJHillman]

What's the point of using a dollar sign in place of the S?

Or just stop dodging BILLIONS in WA State taxes

[devloop]

Microsoft has been dodging WA State taxes at least since 1997 by redirecting ALL of its profits to a shell company in Nevada.
This petition here has a good analysis here showing running totals between $2.1 BILLION to $8.4 BILLION in dodged taxes.

Microsoft has effectively corrupted and captured the WA State's government, which routinely passes legislation to forgive Microsoft's back taxes, some as large as $100M a year, at times where the state is running deep into deficits.

Offering to "voluntarily" "contribute" 28M annually is like robbing a bank and then "offering" to return a few cents on the dollar.

Re:Opiniated "article"

[amicusNYCL]

Whats with the ironic tone used in this "article"?

I'm not sure, but one thing I did notice was that the submitter for this article (reifman) is also the submitter for the previous article (the "Slashdot reported" link), and the other link is a link to his personal blog. The previous article links to an article that Jeff Reifman wrote at crosscut.com, and has a link that says "Nevada tax dodge" which points to an article at kplu.org that quotes Jeff Reifman.

I don't know what this means. I don't know if Microsoft is dodging Washington taxes via their office in Nevada, maybe they are, maybe they aren't. I do know that Jeff Reifman has a huge boner for Microsoft.

Re:Opiniated "article"

[WillAffleckUW]

I'd have said passive-aggressive. But if the shoe fits...

I can see you're not from here. We're all like that.