Posted
by
timothy
on Thursday July 09, 2015 @11:23AM
from the well-if-you-put-it-that-way dept.

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.

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.

They don't need to. I'm not a fan of MS, but the school system would be doing their students a disservice if they didn't teach them to use MS products. I'm not saying exclusively, but learning anything else would be completely useless for the vast majority of the students who will end up using MS products anyway. I know, I know - it could change in the future, and I hope it does, but it's the reality of today.

the school system would be doing their students a disservice if they didn't teach them to use MS products

Isn't that vocational school stuff? You're proposing to train every student to be a secretary in a Microsoft shop, or what? These days, students should be using Libreoffice, it's free and perfectly adequate for all the educational needs that I know of.

Actually, the school system would be doing their students a disservice if they didn't teach them critical thinking skills and basic subjects that they need to get their post secondary education. That most definitely does not include Microsoft products.

Perhaps you missed the part where I said "not exclusively." They should be learning a variety of different products, and that you point to one in particular and suggest that's what they should be learning only shows your bias. If they learn on a variety of products, then they don't fall into the UI trap that was discussed several days ago on Slashdot - they learn to look around the menus and find what they want instead of rote memorization of one product.

Bullshit.... everything on their desk is a product, from the books to the pens, pencils, and scissors. What you're suggesting is they shouldn't even use computers at all then, because they are "products." Do you even stop to think about what you're writing before press "submit"?

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.

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.

It comes down to setting standards early on so that they benefit in the long run. Only big companies can do that. It's another means to market your product. It's not illegal or immoral as long as nobody is getting their pockets greased up.

It's cheating when you advance your project in some manner independent of that product's qualities - usually meaning to lose money in one area (eg, steep discounts in education) in order to secure sales elsewhere (A generation who enter the workforce already familiar with your software).

Ahh, so the already cash-strapped schools that can't afford to pay teachers and buy textbooks should go without modern equipment and have students learning token ring and arcnet passive hubs, because some "evil corporations" might actually be taking a gander past the latest quarterly filing and are looking to get some value out of discounting their products and services in an effort to help out a failing education system.

Besides, if the student is any good at doing this stuff, they'll learn the concepts and

"Ahh, so the already cash-strapped schools that can't afford to pay teachers and buy textbooks should go without modern equipment"

That's one option. There are two obvious others:1. Increase funding to education. This is politically difficult.2. Accept private interests paying for some of the costs in exchange for a degree of influence in the material being taught.

Option two might look attractive at first, but can potentially lead to very bad outcomes.

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.

According to usgovernmentspending.com, Washington State education budget for 2015 is $8.3 billion. MS is offering $28 million. As percentage, their offer is 0.34% of the state's education spend. Nice to have for sure, but hardly enough to call the shots on on state-wide programs and curriculum.

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

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.

The best you can hope for is to benefit from a martyr effect: Go to jail for a 'cause' and when you get out you might be able to build them into a decent fanbase. Claim your conviction was persecution and make a tidy sum on the talk circuits and endorsements with your niche fame.

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?

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.

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.

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 the

We actually had it until 1865. It was the States. Under the Constitution States are sovereign entities capable of nullifying federal laws. Unfortunately Mr. Lincoln's war pretty much destroyed that concept.

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.

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.

I agree but before the 17th Amendment, a majority of the States were already directly electing their Senators to Congress so this was a state by state change.

Slavery was not a big issue for the seceding states. They were primarily concerned about tariffs. Their ships exporting cotton to Europe would come back full of manufactured goods, and Lincoln's proposed protective tariff would have hurt them significantly. The Corwin Amendment [wikipedia.org] (the first attempt at a 13th amendment), which would have enshrined the legality of slavery in the Constitution, was well on its way to passage. Lincoln (who was far from an abolitionist) even entreated the states to pass it during h

This happens with all kinds of government budgets. Some source of revenue will be marked for a specific purpose, like lottery revenue for schools, and then other funds being used for the same purpose will be diverted. Money is conveniently fungible.

Yet it is the "red" states that get more from the feds than they pay in and the "blue" states that do not, which means that those "pull yourself up by your bootstraps" states are welfare states.

The whole blue/red state thing is a stupid divisive tool.

Outside of 4-5 counties, Washington is deep red, although with a strong libertarian bend. Remove Whatcom county at the Canadian Border down to Thurston Country at the south of Puget Sound and Washington is no different and just as backwards as Idaho.

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.

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.

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.

If you're unwilling to voluntarily pay more out of your own pocket, you are hypocritical in suggesting that others should pay more. How difficult a concept is this? You want others to do what you will not do yourself. What ever happened to the days of "ask not what your country can do for you, ask what you can do for your country"?

I get your point, but middle income America does love its ability to deduct mortgage interest and a number of other things. One could argue that we love to find ways to lower our tax obligations just as much as business does. If not, why not just let Uncle Sam keep all the withholding and not ask for a refund at all?

As for ethics vs law, ultimately it's the public that's at fault for not holding our representatives responsible for their actions. If our reps get bought out by corporations, it's up to thei

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.

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.

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.

...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

That argument seems kind of specious to me. I could just as easily argue that I pay my taxes with my employer's money because I've "baked that into the price I charge them for my labor" (aka my salary).

I could just as easily argue that I pay my taxes with my employer's money because I've "baked that into the price I charge them for my labor" (aka my salary).

This is exactly what happens. Unless you mean when you negotiated your salary it didn't occur to you that income tax would need to be paid on it. You didn't realise that "we pay X for this job" was going to translate to X-n (n=deductions including income tax) take-home pay? And then you think, hmm, will that take-home amount be enough to pay my bills or did you think will X be enough to pay my bills and got a huge shock when you saw the deductions?

Then why do you consider me to be paying my taxes but you consider no company to have ever done so when it seems like you agree that both I and the company are doing exactly the same thing (to wit building our expenses into the prices we charge)?

Or did I somehow misunderstand what you meant by "you are paying a far larger portion than ANY company...no company has ever paid a penny of "their own" income in taxes"

I think the source of confusion is that you should realize you have two distinct roles in the economy: 1. You are a seller of labor who effectively charges your employer for your expenses including tax and 2. you are an end consumer who buys things that have corporate tax built into the prices which you cannot pass on.Consider extreme hypethetical case: Joe has inherited a huge pile of cash, literally, and is otherwise unemployed. He has no income, not even interest because it's cash, and just spend

" I'm attacking them for paying less than they are ethically obligated to."

Seriously? How many millions are they ethically obligated to pay? Is there a calculation? I mean really what are you expecting? Do you pay MORE taxes then you have to? Why not? Because you have "decided" that you have met your ethical obligations? Think about it.

I'm not. I'm attacking them for paying less than they are ethically obligated to.

Apparently you and Microsoft differ on ethics. If you go into a pizza place and want to buy 50 pizzas, and they offer you 10% do you pay full price anyway? Deals go on all the time between companies and cities or states eager to host them. My city gave Wal-mart a break on sales taxes to entice them to my city over a neighboring city. Wal-mart brings in millions in sales tax revenue to the city. If the city had insisted on the full normal sales tax rate, then Wal-mart would have been bringing in millions in

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.

"Dodge" and "evasion" are two different words. Learn the difference, and maybe blah blah blah.

Companies of this size are able to write of a lot of their own legislation to legalize their desired behavior. Once the tail wags the dog like that you can no longer use the letter of the law to argue that big companies like MS are being responsible corporate citizens.

The argument that we should all just voluntarily pa extra taxes is a weak and sad one. There are no examples I am aware of of ANY government system that operated on voluntary taxes. The goal of a tax system should be to evenly and fairly le

> Companies of this size are able to write of a lot of> their own legislation to legalize their desired> behavior. Once the tail wags the dog like that you> can no longer use the letter of the law to argue that> big companies like MS are being responsible> corporate citizens.

The difference is that Microsoft, Apple, Google, and the various tech companies that people are attacking lately over these tax issues are not the ones that wrote those laws. Tech in general, until very recently, has

It indicates that Microsoft's dodge very likely was illegal. State law at the time indicated that royalty taxes should be paid where your operations reside - not where you book the income. This was never pursued by the state department of revenue. Why? The author notes that the WA dept of revenue was run by a former Microsoft exec. Whether that's really the reason we don't really know, but it certainly is enoug

I think he's talking about the fact that you can claim your spouse as a dependent.

That being said... if you earn enough, you run into the marriage penalty. That is, someone making a little over 400k by themselves will pay the same tax rate as two people making a little over 400k together rather than 800k as one would expect.

I think he's talking about the fact that you can claim your spouse as a dependent.

That being said... if you earn enough, you run into the marriage penalty. That is, someone making a little over 400k by themselves will pay the same tax rate as two people making a little over 400k together rather than 800k as one would expect.

Exactly my point. If anything, there is a marriage penalty and not a single penalty.

Timothy probably did not incorporate himself in a different jurisdiction, then pay his lower-taxed-self, a PO box in the desert, 90% of his salary for "services rendered." He likely DID pay more taxes than are required of him. The majority of people do.

There's the letter, and the spirit of the law. You can technically not break the letter while trampling all over the spirit. In some cases, there are even more gradations. OJ isn't criminally guilty of killing his ex, but he is responsible for it.

Bullshit right back. The concept of spirit of the law has a long history, and is a valuable concept. Much of the interpretation of the US constitution relies heavily on the spirit, rather than the letter, of the law, and the English-derived precedent system owes much of its existence to the dichotomy.

Yes, things are simpler when those line up with each other. I don't think anyone would argue that US tax laws should be adjusted. Nevertheless, it IS rather cheeky of MS to "volunteer" to pay a special tax

I'm paying the taxes that Microsoft dodges thanks to their lobbyists, extortion by threatening to leave if they don't exactly what they want and their corruption in former Microsoft lawyers writing the laws that get signed off by legislators who have little to no recourse.

If I write a contract and then say "sign it or else" it's good old fashioned extortion. Meanwhile people such as myself then have to make up for the fact that one of the largest employers in the state isn't paying taxes like every other

Well, if they can't get the H-1B cap increased, then I guess growing their own talent locally, and flooding the market is the next best thing. The H-1B's would have been the optimum solution as that would have forced wages down more quickly.

Washington still has pretty onerous non-compete laws which Amazon and Microsoft pay their lobbyists to keep in place. Sorta sounds similar to H-1B indentured servitude...

It's an awful nice economy you have there, it would be a shame if all these taxes made us layoff or move out of your state...

Little guys have no such clout, while the Intel's, Nike's, and Microsoft's can swing their weight around pretty readily. the result is that companies over a certain size effectively are able to become tax exempt for state and local purposes.

The argument is always that they employ enough people at high wages who pay plenty, which is a real cop out. Somehow I can't reconcile the behav

Could you put a little more socialist bias in your description of the events?

Why no complaints about the 50,000+ six-figure jobs Microsoft created in King County? Or about how Seattle and the Eastside have some of the best public schools on the planet, funded by property taxes, paid by homeowners who work for MS, Amazon, and Google among others? Or about how the technological innovation these companies, and others, provide, funded by the money they don't have to pay as taxes, has improved the abilities of

I think you may be confused, this is just a strict anti-microsoft bias (which is very common here) but I could see how in this case it looks like a socialist bias, especially to someone like you who probably thinks "socialist" is a swear word.

Agreed, although what MS seems to be saying is "I will pay ADDITIONAL taxes but only if you spend it a certain way." Subtle but important difference. More akin to a donation for a particular cause than a voluntary tax.

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.

So Microsoft is 100% responsible for legislation that benefited numerous other companies, not just Microsoft?

And that $4BN in education cuts, how many years did those cuts accumulate (10?) to reach $4BN, or was it $4BN/year?

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 [change.org] has a good analysis here [google.com] 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 [boingboing.net], at times where the state is running deep into deficits.

This is a 'donation', not a tax. If it were a real tax, it would be written into law and/or tax code, and wouldn't be a one-time thing. The taxpayer does not get to decide how the specific taxes they pay are spent, and certainly a corporation doesn't.

The AC is trying to shrewdly point out that Microsoft is a for-profit corporation. And I'd like to thank him, too, because I always just assumed they were a charity or government organization. Nope, turns out they're a for-profit corporation. Thanks, AC!

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 offic

The state of Washington should just seize all of Microsoft's assets to recover back taxes and penalties, just as it would to any individual or small business that ran-up such a huge bill via willful tax evasion.

You misunderstand, Microsoft does not owe any back taxes. The writer of the article is trying to make it look like they did, but they did not. What Microsoft is doing is like if you went to a "no sales tax day" sale and then later you volunteered to pay the sales tax for items you purchased on that day but only if it is used for programs of your choosing.