'Making Amazon Look Bad': Microsoft Is Backing a Major Tax On Itself and Amazon (geekwire.com)

Microsoft is urging lawmakers in Washington to increase the tax burden on itself and Amazon (Warning: source may be paywalled; alternative source) to help pay for a new higher education fund. "The bill, which was introduced Monday by Rep. Drew Hansen and Rep. Gerry Pollet among others, "would pour about a billion dollars over the next four years into a 'workforce education account,' to be spent on more financial aid as well as more degree slots in high-demand subjects such as computer science, engineering and nursing," The Seattle Times reports. Microsoft and Amazon would be the only two companies included in the highest tax bracket. From the report: The premise now is to put a surcharge on businesses that benefit the most from a highly skilled workforce. That means high-tech of course, as well as professional services firms. The bill proposes increasing the state business and occupation tax by 20 percent on about 40 categories of technical services, such as telecom, engineering, medical and finance. And by 33 percent on tech firms with more than $25 billion in annual revenue. But here's where this goes off the charts, into politically unheard-of territory. It mandates a top rate, a whopping 67 percent business tax increase, for those "advanced computing businesses" with "worldwide gross revenue of more than one hundred billion dollars" per year. There are only two businesses headquartered here that fit that rarefied description. And one of them, Microsoft, is the tax's biggest booster.

But that other company that would also be most on the hook? Apparently it isn't so thrilled to have been volunteered for civic duty by one of its chief rivals. "Amazon was surprised to be included in such a public 'hey, let's do this' by Microsoft," said Rep. Gael Tarleton, D-Seattle, who said she heard that lament directly from an Amazon lobbyist. Added Pollet: "Amazon has groused in meetings down here that Microsoft is doing this mostly as a way of making Amazon look bad."

Comments

If anyone makes Amazon look bad, it's AMZN

[reanjr]

Microsoft doesn't decide how Amazon operates. If Amazon looks bad, it's down to Amazon alone.

Re:If anyone makes Amazon look bad, it's AMZN

[chispito]

Microsoft doesn't decide how Amazon operates. If Amazon looks bad, it's down to Amazon alone.

You are being played.

This is common business stuff. Usually it's large businesses getting in bed with government, because they have the heft to comply but small competitors don't.

In this case it's a bit more nuanced, they are leveraging this against a large competitor.

It's hardly virtuous. In fact, pouring money into computer science education is just a ploy to drive down wages of their own employees. It's a twofer.

So you're optimistic that the programs will work, but pessimistic as to the motives? I'm rather the opposite: I do not believe pushing people into STEM will result in many more people competing in the field, though I think it's from a misguided effort on the corporations' part to do something about job opportunities for under served groups. I do think in ten years there will be a lot more middle managers who make their careers fiddling around in Python rather than the current crop that have made their careers twiddling around in Excel... but they won't be the ones writing the modules or supporting the databases.

Re: Yep. There's a West Coast "Solution"

[reanjr]

Actually, no, the solution to the actual problems being proposed is more spending. The tax increase is simply an implementation detail.

Well played Microsoft

[mykro76]

Who employs more degree-holders in the US?

• Amazon - 600K worldwide, but only about 60K it calls US corporate workers (likely to be degree holders) - the rest are low-wage fulfilment workers. Will pay tax on gross of 230 billion (2018).
• Microsoft - 130K worldwide, with 80K in the US, likely to be virtually all corporate workers. Would pay tax on gross of 110 billion (2018).

So Microsoft is likely to hire more degree holders than Amazon, yet forces Amazon to contribute twice as much to boosting the graduate pool.

Re: Yep. There's a West Coast "Solution"

[ShanghaiBill]

Socialism sucks, but just a little less than capitalism.

You are likely confusing "Socialism" with "Social Democracy". Although they both contain the root word "social", they are two completely different things. Social democracy is a form of capitalism, not a form of socialism.

Social democracy: Denmark
Socialism: Venezuela

Re: Yep. There's a West Coast "Solution"

[Anonymous Coward]

Economist nice right wing website there

I raise you
https://nces.ed.gov/pubs/web/97916.asp
https://www.usnews.com/news/best-states/articles/2018-02-27/in-most-states-poorest-school-districts-get-less-funding
https://www.nbcnews.com/news/latino/segregation-school-funding-inequalities-still-punishing-black-latino-students-n837186
https://hechingerreport.org/the-gap-between-rich-and-poor-schools-grew-44-percent-over-a-decade/
https://edtrust.org/resource/funding-gaps-2018/
https://www.thenation.com/article/how-unequal-school-funding-punishes-poor-kids/
https://www.globalcitizen.org/en/content/cost-of-education-in-us/
https://www.kpbs.org/news/2011/may/19/schools-rich-neighborhoods-receive-more-tax-dollar/
https://www.theatlantic.com/business/archive/2016/08/property-taxes-and-unequal-schools/497333/
https://www.philly.com/philly/education/pennsylvania-school-funding-lawsuit-rich-poor-districts-20180706.html

Businesses do not pay tax

[SirAstral]

Notice that line item on your receipts that say "Tax:$$$"... you pay that, not the business... they just collect for uncle sam from you.
Did you also know that businesses calculate the total cost of a product they buy from whole-sellers and vendors, which they paid taxes on, which is a cost they transfer to the consumer that buys the end product?

Did you know that when you cheer on a business paying MORE tax you are actually just cheering on the poor paying more for all of their products? People cheered windfall taxes... prices at the pumps when up... then they cried about it. I was like... huh? you cheered for this you numb-nuts!

The poor tax is real, and it has everything to do with being ignorant about how the economy works. Microsoft is a big company, the money they make filters down to you... the lowly consumer, and NO you do not escape that cost just because you don't use windows. You buy food, your store might use Windows, you pay bills, that company might be using Windows. They all pass down the cost of buying their licenses from Microsoft to you... their customer.

Have you wondered why your dollars do not go as far as they used to? It's not just inflation... inflation is just one component, in fact inflation is more a tax on your savings than anything else.

Let's make this simple.

You own a Burger Joint.
Taxes today for a $5 burger is 10%
Customer pays $5.50 for that burger.
Taxes tomorrow for a $5 burger is 15%
Customer now pays $5.75 for that burger.
Those that cheer for taxes like this, is like the customer cheering that their burger just went up 25 cents. Hurray for you, your senators thank you for your gullibility! They will happily take 20 cents of that 25 and give it to their cronies... D or R it matters not.

It is not a joke when they say that the poor pay for everything and it is not a joke when a reasonable minimum wage is enforced to ensure a minimum viable economy, because if the poor have no money the rich soon lose theirs as well. Look at how many rich folks also suffered in Venezuela when it ran out. Only the super rich are finding ways to survive and that is mostly because they are connected to power, not just because they have $$$.

Couple this with the fact that another poster mentioned that Americans already pay more than enough for education, you might as well call that more than enough evidence that foul play is afoot and you need a sanity check to cheer this on any longer.

And lets not forgot how many businesses that still get out of paying taxes through loophole laws, brought to you by none other that the very elected officials everyone that cheers for this voted in. Do you feel the daggers in your backs yet? No? Okay, that's great... it means they can dig it in further and twist a little more!

Re:Businesses do not pay tax

[Anonymous Coward]

If I own a burger company, and my customers will happily pay $5.75 for a burger, why would I only charge $5?

When you own a business, you price your goods to maximize revenue. You don't need a tax to raise prices.

Given an opportunity to raise prices without alienating customers, the logical thing to do is raise prices. In some philosophies of business, the ethical thing to do is raise prices in that situation.

When you understand that modern business ethics puts maximizing revenue above all other considerations (including profit), then asking for higher taxes makes sense. This allows you an opportunity to increase revenue.

Re:Businesses do not pay tax

[anarcobra]

You are simplifying things in the other direction from GP.
Yes, businesses will raise their price as high as they can, but burger places are competitive, so consumers have the choice of going to a cheaper place. So there will be an equilibrium between maximizing profits and not going to far from the competition. (assuming there is no price fixing)
A tax will affect all the competition as well, so there is a good chance the price of burgers will go up across the board.

Re:Businesses do not pay tax

[AmiMoJo]

You are describing sales tax. Corporation tax is on corporate profits, not on sales.

The obvious flaw in your argument is that you ignore where the $5 price tag for the burger comes from. The company chose $5 based on what the market will pay for its product. If the tax increases the market won't magically be willing to pay more for its product, so price rises may result in losing more from lost sales than the tax increase is worth.

Did Google's prices go up when they were forced to pay the back tax they owned in the EU? Were the EU fines they paid for anti-competitive behaviour passed on directly to their customers? Of course not, the online advertising and cloud computing markets are highly competitive and they are in both for the long term, so they aren't going to jack up costs and damage their competitiveness over a relatively modest tax rate.

Re:Businesses do not pay tax

[squiggleslash]

You own a Burger Joint.
Taxes today for a $5 burger is 10%
Customer pays $5.50 for that burger.
Taxes tomorrow for a $5 burger is 15%
Customer now pays $5.75 for that burger.

While I agree with the general point, sorta, these numbers are hopelessly wrong as they assume that the burgers are 100% profit and the business has no costs. Taxes on a $5 burger that costs $4.75 to make (assuming 5% profit, which is not unusual in that industry, and includes all amortized costs) would, at 10%, be 2.5c. The increased cost would be less than 2c if taxes went up to 15%.

In all honesty if you doubled corporate income tax tomorrow, between the fact it's a tax on profits and the external pressures keeping costs down, I doubt you'd see a blip of more than a fraction of a point on inflation for the year.

Plan: bring Amazon down, then suddenly back out

[Shompol]

This reminds me about that time Microsoft settled with patent trolls with the purpose of scaring Sony into paying. One of the conditions of their settlement was to get money back after Sony pays. They were not ashamed to try and enforce this agreement through court, thus making it public. Microsoft has always been a bunch of narcissistic douche bags, pretending to be a technology company.

Go Microsoft!

[Sivaraj]

I would have never believed I would say this 20 years back. That too on Slashdot. But,

Go Micro$oft!!!

Re: Yep. There's a West Coast "Solution"

[renegadesx]

When liberal free market democracies are being reduced to eat their pets, give me a call. Name one socialist country doing a better job than us on any of those.
And before you start to say any of the Scandinavian countries, nobody except the American far left even classes them as socialists, they hate the word because they know what the rest of the world knows: Socialism is Venezuela, nor Norway. Social democratic countries are still capitalist with exceptionally low corporate tax rates and high income taxes on the middle class.

Re: Yep. There's a West Coast "Solution"

[war4peace]

America spends more per student on education than any other country in the world except Norway.

There is a difference between "money spent" and "money well spent".

Re:Invest any state with great care

[stealth_finger]

Do your homework before investing in any part of the USA. The politics, laws, SJW, homeless populations, education levels, power prices, political activism. Rank each state/city by the tax and costs they create for a larger brand. Dont allow your band to become a flow fo money for city and state SJW projects and state/city virtue signalling. Once a city/state wants to extract your profits to fund their political virtue signalling have the ability to move to a really great state. A state tat welcome investment and that has low crime and less of a homeless problem. That allows your brand to keep your profits, invest in your brands growth. Avoid the state/cities that want to extract more of your money for their own side of politics. Find the states with good housing prices for your workers, good eduction so your workers can work. Stay away from union and political demands to hire in set parts of a city. To "create" new jobs for random people after community talks. Low 24/7 power costs, low tax, less political activism and fast networks.

Basically what you're saying is move in, take everything, give nothing, move out.

Here's a crazy idea

[VeryFluffyBunny]

How about govt. doing its job & making sure everyone pays their fair share of taxes in order to fund the stuff that everyone needs from their govt., e.g. public transportation, education, healthcare, urban planning, law enforcement & judiciary, & public health & safety, you know, all the stuff that improves the standard of living & quality of life for everyone?

That means everyone, including billionaires & corporations, who are currently starving govts. of the funds they need to provide opportunities, safety, health, & security for everyone.

Or you can carry on marching towards poverty & disenfranchisement because the billionaires & corporations fill the power void left by libertarian ideological "small govt." Does that sound democratic & civilised to you?