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Not Just Apple, How Microsoft Sidestepped Billions In State Taxes

samzenpus posted more than 2 years ago | from the birds-of-a-feather dept.

Microsoft 595

reifman writes "Apple's not the only company to save billions in taxes through Nevada as The New York Times reported yesterday. Here's how Microsoft's saved $4.37 billion in tax payments to Washington State and how it's led indirectly to $4 billion in K-12 and Higher Education cuts since 2008. 18% of University of Washington freshman are now foreigners (because they pay more) up from 2% six years ago. Washington State ranks 47th nationally in 18-24 yo college enrollment and 48th in K-12 class size. This hasn't stopped the architect of the company's Nevada tax dodge from writing in The Seattle Times: 'it's [Washington] state's paramount duty to provide for the public education of all children. Unfortunately, steady declines in public resources now threaten our ability to live up to that commitment.' Yes, indeed."

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what about slashdot? (5, Interesting)

larry bagina (561269) | more than 2 years ago | (#39840109)

Does geeknet, Inc. pay accountants to minimize their tax burden?

Re:what about slashdot? (4, Insightful)

damn_registrars (1103043) | more than 2 years ago | (#39840351)

Does geeknet, Inc. pay accountants to minimize their tax burden?

Are you assuming slashdot still brings in enough traffic to make money?

Re:what about slashdot? (4, Interesting)

Fluffeh (1273756) | more than 2 years ago | (#39840395)

I think everyone tries to minimize their tax burden. What makes these companies stand out is the vast extent of effort they put into it.

I earn an above average salary and I pay my accountant to do my taxes to ensure that I am able to claim all the deductions that I am entitled to. The difference is that I don't have a shell company set up in a tax haven paying me in some nefarious manner that is done to avoid yet another fee of some sort. These stories wouldn't be stories if MS or Apple simply claimed all that they could on their tax statements, they are stories because of the absurd lengths that they go to. I am absolutely sure that /. and many websites try to claim all that they are entitled to, but I would be exceptionally surprised if the lengths that they went to included offshore tax havens, "Offices" set up in a state to claim a different regional address and the like.

Perfectly fine (-1, Troll)

Anonymous Coward | more than 2 years ago | (#39840115)

Giving billions to the state, so it goes to unionized, lousy teachers? NAK

Re:Perfectly fine (5, Interesting)

Concerned Onlooker (473481) | more than 2 years ago | (#39840159)

Why is it that when CEOs are payed ridiculous compensation packages people say that "to attract the best talent you have to pay," but when it comes to teachers people say "they should be doing it for the love of it, not the money."

Re:Perfectly fine (0, Troll)

roman_mir (125474) | more than 2 years ago | (#39840271)

As long as teachers are paid with tax and/or fake inflation money, the people who pay these taxes should be against them.

Re:Perfectly fine (4, Interesting)

AngryDeuce (2205124) | more than 2 years ago | (#39840305)

Because those people are ignorant, either naturally or deliberately, and think that somehow their own upbringing wasn't just as subsidized by the nanny state they bitch about as anyone else that grew up in a first-world country.

They were all raised by wolves in the forest and had to fight to the death for every bit of sustenance in their lives, didn't ya know? Remember the movie 300? They grew up like those guys, except for without the helots [wikipedia.org] that made it all fucking possible.

In other words, they're full of shit and just don't want to pay it forward now that it's their turn to do like their parents and everyone before them did.

Re:Perfectly fine (4, Insightful)

MightyMartian (840721) | more than 2 years ago | (#39840453)

For the most part they're just greedy assholes who think they've found an ideology that can justify what is nothing more than pure, unadulterated selfishness.

Re:Perfectly fine (0)

Anonymous Coward | more than 2 years ago | (#39840479)

Why is it teachers spend all their time evaluating the job their students are doing learing on a daily basis, but refuse to have their job performance measured in any way ever?

Re:Perfectly fine (1)

future assassin (639396) | more than 2 years ago | (#39840493)

No one put a gun into anyone head and told them to be a teacher. Its not like they didn't know how volatile the teaching profession is before they got into it.

Good for them, too. (0, Troll)

jcr (53032) | more than 2 years ago | (#39840117)

Glad to hear that Microsoft is employing competent accountants.

-jcr

As a University of Washington student... (0, Troll)

Anonymous Coward | more than 2 years ago | (#39840119)

I am appalled that Microsoft is to blame for the current state of our university. The constant budget cuts are hitting the Engineering department the hardest, especially Computer Science & Engineering. Demand for the major has steadily increased, and yet the number of students able to be admitted has largely stayed the same for years. As it stands, nearly 50% of persons who are already in the University are rejected from the engineering departments, for the CS major it's closer to 70-80% rejection. Considering our UW is right across the lake from Microsoft and yet they continue to exercise such dodgy and harmful tax practices tells me where their true priorities lie.

Re:As a University of Washington student... (1, Troll)

jcr (53032) | more than 2 years ago | (#39840153)

What do you think Microsoft owes you, and why?

-jcr

Re:As a University of Washington student... (4, Informative)

Anonymous Coward | more than 2 years ago | (#39840193)

They're using the infrastructure in Washington aren't they?

Re:As a University of Washington student... (0)

Osgeld (1900440) | more than 2 years ago | (#39840235)

so does the college

Re:As a University of Washington student... (0)

Anonymous Coward | more than 2 years ago | (#39840325)

and....? I expect the college pays taxes as well, probably more than MS does.

Re:As a University of Washington student... (1)

Fluffeh (1273756) | more than 2 years ago | (#39840423)

The purpose of a University is to teach, not to make a profit (at least that is the case here in Australia where university fees are still heavily subsidized) while the purpose of a company is to make money.

I certainly expect the university to be paying the taxes it owes to the state, and I would expect that Microsoft does the same.

University of Washington avoided $4.37 billion... (1)

denzacar (181829) | more than 2 years ago | (#39840473)

...in taxes through its Nevada office too?

Oh my!

Re:As a University of Washington student... (5, Insightful)

Billly Gates (198444) | more than 2 years ago | (#39840265)

What do you think Microsoft owes you, and why?

-jcr

Because MS uses the infrastructure and expects the rest of us including its workers to pay for the right to work. Where I come from that is slavery when you work for free. True the student should pay for some of it, but MS is the benefactor in recruiting CS students from U of Washington. Infact, U of Washington is cutting its computer science program from lack of funding.

Who gets hurt now? Not the students but Microsoft. It is also not fair for Microsoft to soley pay either as its a public good that benefits other employers in the area and a level tax keeps it fair that everyone pays and benefits.

Businesses use roads to ship products, uses the military to keep the world safe to do business, businesses benefit the most from IP laws, and free trade. I would even say they benefit a lot more than you nor I. IP laws and free trade hurt us more than anything. It is there to benefit employers who do not pay for it but expect it others to pay for it then go in a right wing circle jerk about the evils of welfare moms when they are the worst ones.

MS did the right thing by avoiding taxes as an individual corporation. However, the loopholes need to be closed. Austerity will come to the US soon and you and I will end up paying for things your employer uses through forced higher taxes.

Re:As a University of Washington student... (0, Troll)

zidium (2550286) | more than 2 years ago | (#39840299)

I never graduated from college, but I taught myself PHP and 15 years later, I'm earning in excess of $150,000 in an income-tax-free state, with a very low cost of living.

College is for the unmotivated or those who have to be spoonfed their information.

Re:As a University of Washington student... (5, Insightful)

denzacar (181829) | more than 2 years ago | (#39840363)

College is for the unmotivated or those who have to be spoonfed their information.

Yeah, you're right.

Let's all hope all the medical staff you ever meet isn't self-taught.
Or that building you live in isn't designed and made by a self-taught architects and builders.
Or that your car, computer, mobile phone, blender, pace-maker etc. are not products someone who's self-taught banged together in their garage out of bubblegum and lint.

Re:As a University of Washington student... (4, Funny)

MightyMartian (840721) | more than 2 years ago | (#39840489)

The guy is bragging himself up as a self-taught PHP programmer. That ought to tell you all you need to know. Belief that he actual makes $150k per year is optional.

Re:As a University of Washington student... (5, Interesting)

MightyMartian (840721) | more than 2 years ago | (#39840477)

Even if I believed you (and claims like these are a dime a dozen on the Internet), it's at best an isolated case. Teaching yourself PHP is hardly brilliance. Anybody can do it. Teaching yourself to code well, that's a whole other ballgame. The mere fact that you didn't say "I taught myself C++" or "I taught myself Java", but in fact, picked out a language that could best be described as the BASIC for the 21st century suggests to me that your proof of why higher education is needed, not why it isn't.

I'll wager you're the kind of talentless hack that I have to clean up after. I was paid by the hour by a friend of mine's company to fix up a PHP catastrophe coded by some assholes who actually got away with $40,000 for a site that violated every notion of security and best practices. I made $20,000 on it, so by your calculation I'm the talentless chump, but by any reasonable standard, the assholes who ripped off a company for $40,000 for a product that wasn't worth taking a shit on would have been the talentless ones.

Re:As a University of Washington student... (0)

roman_mir (125474) | more than 2 years ago | (#39840335)

Who gets hurt now? Not the students but Microsoft.

- stop pretending you want what's best for Microsoft, if you wanted that, you'd be asking for government to stop taxing and regulating the company.

--

The government does not create the infrastructure, because the wealth that is used to build the infrastructure comes out of individual earnings and out of businesses making money. Infrastructure gets created when there is a reason for it - the profit motive. OTOH the gov't builds whatever it wants not because there is a market driven reason for it, but because the money can be stolen from people and divided nicely between the companies and the politicians that are involved in this theft.

The companies AND people would do much better if they weren't forced into this government mandated slavery, and I insist that taxes are theft, taxes are forced labour and what is forced labour if it's not slavery?

Slavery is forced labour, and what we observed here is that democracy leads to slavery very easily, as the mob votes for the bread and circuses politicians, such as Theodore Roosevelt and then the gov't decides it has 'the mandate' to steal ever more freedoms from people, you get Fed, IRS, FDIC, etc., and as the gov't grows, you are forced to pay more and more towards it.

It's slavery, it's nothing but slavery, and the worst part you are still for it as you still don't get it.

Re:As a University of Washington student... (1, Insightful)

MightyMartian (840721) | more than 2 years ago | (#39840499)

Every civilized society throughout history has required taxes. Pay yours, you pathetic selfish cunt.

Re:As a University of Washington student... (0)

Anonymous Coward | more than 2 years ago | (#39840421)

Microsoft uses the roads? Ummm, no, it doesn't. It's employees, shipping companies, etc. that use the roads. Roads are paid for via gasoline taxes, license tabs, etc.

LOL if your definition of slavery is to work for free. Slavery is being forced to work against your will. Last I checked, no one is being forced to work at Microsoft. Also, MS will recruit developers from all over the country, or the world for that matter. If the salary that they pay is not enough to incent a CS student to get an education and work for MS, then let student go dig a ditch.

Buiness pay companies to ship products. Those companies pay fuel taxes, licensing fees, inspection certificates, etc. The use of public infrastructure is getting paid for and has little to do with MS revenues. If MS didn't ship something, then the companies that do use the infrastructure wouldn't use it and wouldn't pay taxes.

Examples can go on and on about how taxes are really paid and who should be paying for what.

Re:As a University of Washington student... (1, Insightful)

Billly Gates (198444) | more than 2 years ago | (#39840451)

So basically MS does not pay taxes and neither do 80% of employers in Seattle. I go to school for a CS degree. I have to pay for the degree with debt because MS wanted a higher margin. That means part of my labor is free because I paid for the right to work for Microsoft in essense.

Rates keep going up and are so high now that college grads can't get car loans, save for homes, and owe more than 1 trillion in credit card debt. Why? Corporations no longer pay taxes and universities need funds to keep running.

So yes the costs are externalized to their workforce and other tax payers.

Re:As a University of Washington student... (1)

AK Marc (707885) | more than 2 years ago | (#39840267)

Because under the rules of incorporation, they are required to pay taxes. If they didn't like that, they shouldn't have incorporated.

Same thing that Apple owes to California... (0)

denzacar (181829) | more than 2 years ago | (#39840279)

Payment for the use of local public resources - through taxation.

Corporations operating at high tax location A, having 99% of their workforce and assets at location A, using resources of the location A, but avoid paying dues and taxes at location A, paying them instead at low tax location B - that's borderline illegal AND morally corrupt.

The only reason it is not outright illegal is the fact that corporations can afford a different kind of "justice" than the ordinary, flesh and blood persons.
Particularly those flesh and blood persons who have to work for a living.

And that is the source and reason for immorality of such an act.
Assuring themselves preferential treatment based on possession of monetary and other resources, in an environment (legal) which exists solely for the reason of assuring equal treatment of all parties regarding their rights, obligations and grievances.

In short, they are exploiting the rules in a way which allows them to play a game within a game, unavailable to "ordinary" players - but whose score carries into the original game.
And they are cheating while playing the game within the game.

Re:Same thing that Apple owes to California... (1)

soundguy (415780) | more than 2 years ago | (#39840467)

In short, they are exploiting the rules in a way which allows them to play a game within a game, unavailable to "ordinary" players - but whose score carries into the original game. And they are cheating while playing the game within the game.

A Nevada C corporation costs about $475 a year including renewal fee, resident agent, PO box, and business license. No extraordinary qualities required on the part of the player. Just a credit card.

Re:As a University of Washington student... (1)

cpu6502 (1960974) | more than 2 years ago | (#39840317)

>>>I am appalled that Microsoft is to blame for the current state of our university.

Wow.
You're as gullible as a FOX or NBC news viewer. You bought-into the politicians' propaganda hook, line, and sinker like a fish. The only ones to blame, are not Microsoft who followed the tax laws, but the poltiicians who failed to REWRITE the tax laws such that MS and other corporations would have to pay on all their income (since they reside in washington).

Re:As a University of Washington student... (1, Funny)

john82 (68332) | more than 2 years ago | (#39840375)

I am appalled that Microsoft is to blame for the current state of our university.

Wow.
You're as gullible as a FOX or NBC news viewer. You bought-into the politicians' propaganda hook, line, and sinker like a fish. The only ones to blame, are not Microsoft who followed the tax laws, but the poltiicians who failed to REWRITE the tax laws such that MS and other corporations would have to pay on all their income (since they reside in washington).

Well this simply won't do. This is what happens when the lemmings go off their meds and start thinking for themselves. We simply can't have the likes of you questioning the order of things. No siree, bob.

Now, off to re-education camp with you!

[Btw: If you're reading this, you're in the 1%.]

I live in Seattle. (4, Interesting)

khasim (1285) | more than 2 years ago | (#39840121)

While I oppose the kind of tax dodges that Apple and Microsoft are up to ... I cannot say that any of the problems in this state would be that much better if Microsoft paid all the taxes possible here.

Our local government seems amazingly incompetent.

And Google (3, Informative)

mystikkman (1487801) | more than 2 years ago | (#39840125)

Since we're taking on the tech giants, here's Google.

Google 2.4% Rate Shows How $60 Billion Lost to Tax Loopholes

http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html [bloomberg.com]

Re:And Google (0)

Anonymous Coward | more than 2 years ago | (#39840161)

That will be tomorrow's dupe: "How Apple (page hits) and Google (page hits) avoid paying taxes".

Because it doesn't matter how dead the horse is, flog it for more page hits.

Re:And Google (0)

Anonymous Coward | more than 2 years ago | (#39840179)

Almost all big companies do this, or if they haven't, they will. It pains me to say this, but I've reached the conclusion that the only way to deal with this is to either eliminate or at least drastically reduce to nearly nothing the corporate tax rate in the US. If we don't do it, other countries will and it's too easy for companies to simply up and move in this day and age (or be outcompeted by companies that already exist in tax favorable nations). The result will be the tax burden will need to be borne nearly 100% by private citizens. I suppose if companies aren't paying taxes, they will be able to afford the higher wages that increased personal taxation will require - and the 'cut, cut, cut' tax scheme the conservatives tout will have to be abandoned as it applies to personal taxes (or the government will go bankrupt quickly).

Of course, my plan at that point will be to form my own corporation with myself as the sole employee, and subcontract my current work from my employer. What a disaster. But we need to recognize the reality of the world we live in and deal with it.

Re:And Google (5, Insightful)

AK Marc (707885) | more than 2 years ago | (#39840315)

The most "fair" tax is wealth, not income. Taxing income hold back those who are trying to gain wealth, so the wealthy (those with the power) prefer taxing income. Not to mention that the rich live off billions with zero income. What were the tax bills on Steve Jobs the last 5 years of his life? He made $1 in salary and didn't cash out his stock, instead, he hoarded it and borrowed against it, which allows him to spend it without being taxed on it.

But taxing wealth will never happen (except at death, when it is essentially income for others) because the rich don't want it, and counting wealth is hard.

Is this what Apple fans have come down to? (1, Troll)

internetf1fan (2628541) | more than 2 years ago | (#39840127)

What's the problem? Why do you point fingers at others whenever something negative is being said about Apple. You keep going on about how Apple is better than other companies. Act like it.

US its own worst enemy (5, Interesting)

countach (534280) | more than 2 years ago | (#39840131)

It seems to me all the states are in a race to the bottom to make big companies come to their state. The end game is nobody pays taxes, because states are too afraid of losing companies in their jurisdiction. The only way out is for all the states to gather together and put an end to these races to the bottom.

Re:US its own worst enemy (2)

Xiaran (836924) | more than 2 years ago | (#39840181)

Perhaps they could do things at the federal level?

Re:US its own worst enemy (1)

Osgeld (1900440) | more than 2 years ago | (#39840251)

states love nothing more than the fed's coming down and telling them what to do

they will bitch and whine and cry and beg until offered a voucher and change nothing but a couple lines of paperwork to comply

Re:US its own worst enemy (0)

Anonymous Coward | more than 2 years ago | (#39840189)

While these big companies are using states with lower tax rates as a dodge, states themselves are not putting in lower rates as a dodge. They do it to attract business, which employees people, all of who pay taxes. Just because you don't tax a company does not mean you are not collecting taxes. If anything, it is a more robust and balanced tax policy by taxing consumption, usage, etc.

Re:US its own worst enemy (5, Insightful)

chill (34294) | more than 2 years ago | (#39840191)

Except no one is moving to Nevada. The open an accounting office there, at most. More likely it is just a PO Box.

Microsoft's major physical presence is in Redmond, WA and the surrounding area.

I wonder what Washington would lose in the way of property tax and sales taxes in Microsoft moved wholesale to Nevada -- and most of their employees up and moved. I'll bet it is a damn sight more than $4 billion.

Re:US its own worst enemy (1)

Anonymous Coward | more than 2 years ago | (#39840221)

I've actually stood in Microsoft's physical presence in Nevada, thanks. They lease a floor from Sierra Pacific Power in south Reno for their North American licensing center. My wife's friend did some contract HR work for them.

Re:US its own worst enemy (2)

Billly Gates (198444) | more than 2 years ago | (#39840319)

Vegas was a boom town when I lived there a decade ago. Reason why was because of high taxation in nearbye California. Great attorneys who specialized in California law were in Nevada oddly.

Many companies closed down their warehouses in California and just shipped them to Nevada to avoid the taxes. Las Vegas was a great place to open a company before the housing bust.

California is not recovering yet like the rest of the nation. Jobs are scarcely listed even though it is so populous. It is simply more economical to open an office in ND, TX, or NV.

Low tax rate states do have booms and businesses take not and not just buy PO Boxes. North Dakota has a 4% unemployment rate and Texas is fairly good too. Employees are cheaper to hire there with less regulation.

Re:US its own worst enemy (0)

Anonymous Coward | more than 2 years ago | (#39840195)

Or it's time to use Congress' power to "regulate interstate commerce" to outlaw those kinds of tax breaks.

If corporations are people and have rights and if tax breaks are available to large companies and not the small ones, why don't the small ones sue the state for discrimination?

As for TFA, can you imagine what that $4bn+ could do for Washington?

I think it's time that companies pay tax on all income in the state its headquarters reside.

Re:US its own worst enemy (1)

Voogru (2503382) | more than 2 years ago | (#39840223)

So in otherwords, let's make a cartel? A cartel that has the power to force you at gun point to purchase their products? Doesn't seem like such a good idea to me.

Re:US its own worst enemy (1)

cpu6502 (1960974) | more than 2 years ago | (#39840225)

The State of Washington could have closed this loophole loooooong ago by simply passing a law, "If you operate a business here, you must pay taxes on all your income." If Microsoft doesn't like it they can pack-up and move out. I doubt the state would miss the ~1000 job loss out of millions of jobs..... it's certainly less painful that losing 4 billion in taxes last year.

Re:US its own worst enemy (0)

Anonymous Coward | more than 2 years ago | (#39840349)

~1,000 jobs? Are you crazy? They have closer to 40,000 jobs in the Redmond area - maybe more than that.

Incorrect (1)

Anonymous Coward | more than 2 years ago | (#39840397)

Let me fix that for you:

The end game is no large company pays taxes, because states are too afraid of losing companies in their jurisdiction.

Small companies get to pay more to make up for that. At least, that's my impression about the Philadelphia region. You read in the paper about all sorts of tax deals, loans, etc. being done to attract big company X to the city, but small companies don't get offered deals like that -- it wouldn't be practical or a make for a good headline (i.e. "We're getting 1,000 new jobs from company X" is easier to pull off and sell than 100 deals to with small companies to bring in 10 new jobs each). Since tax money has to come from somewhere, small companies are presumably paying more to subsidize the special deals for the big companies. Cities want the cache of attracting big companies when small, fast-growing companies could generate more jobs. We would all be better off if tax rules were applied uniformly instead of allowing everyone to get their own special (corruption-encouraging) deal.

boring (0)

Anonymous Coward | more than 2 years ago | (#39840135)

You know, it's going to get pretty boring around here when we have to read a constant stream of stories titled "Oh yeah, and company X dodges taxes also!".

In other words, just drop it. All companies do this and it's not news.

Re:boring (1)

Anonymous Coward | more than 2 years ago | (#39840255)

It was certainly news on here when Apple was the only scapegoat.

So let's tear up the Constitution (0, Flamebait)

gelfling (6534) | more than 2 years ago | (#39840145)

And do away with states. Let's simply tax whomever we like whatever we feel like taxing them and if they don't like it they can move to Lichtenstein.

Do you want MS to relocate more workers to India? (0, Troll)

Karmashock (2415832) | more than 2 years ago | (#39840147)

We have the highest corporate taxes in the world. Without the loopholes most US companies would leave the country or go broke.

Who wants skyrocketing unemployment and a further collapse in the US tax base?

Don't be stupid. Don't drive these companies away.

Re:Do you want MS to relocate more workers to Indi (2, Insightful)

Concerned Onlooker (473481) | more than 2 years ago | (#39840215)

"Don't be stupid. Don't drive these companies away."

But is the alternative to let these companies be the de facto rulers, dictating their own terms?

Re:Do you want MS to relocate more workers to Indi (5, Interesting)

Karmashock (2415832) | more than 2 years ago | (#39840293)

They're not defacto rulers. They just pay an internationally competitive tax rate.

Forget what you think the tax rate should be... what is the most you can charge before the companies leave the country.

Not only do companies need to offer competitive prices to make sales... countries need to offer competitive tax rates.

That doesn't make the companies the rulers. It merely forces you to be reasonable. If doing business in your country costs the company more money then other places then it isn't reasonable.

Companies will take a zero sum of the whole thing. So if you want higher wages, that's fine... it just gets added to the total cost of doing business. You want to offer healthcare to people? Again, it just get added.

Every time you add something it reduces the amount you can take in taxes before you cross the line and it becomes cheaper to do business elsewhere.

So be careful with it. If you want the tax money, you'll probably have to make doing business cheaper by skimping on something else. Maybe loosening regulations. Maybe making labor cheaper. Whatever. But if you make it too expensive to do business in the US, they'll leave.

Game over. Then you get ZERO in taxes. They are out of your jurisdiction so the regulation is irrelevant. And labor policies are also irrelevant because everyone is unemployed.

It's a balancing act. Don't cross the line.

Re:Do you want MS to relocate more workers to Indi (2)

AngryDeuce (2205124) | more than 2 years ago | (#39840381)

Yes, better to continue prostituting ourselves and our future. Dignity costs far too much, nay?

The U.S. is the largest consumer market in the world and these guys all depend on being able to sell their shit here to continue making their immense fortunes. Think not? Tell them to pack up their shit and take their products with them. Watch how fast they back the fuck down and start paying taxes.

Re:Do you want MS to relocate more workers to Indi (2)

Chuckstar (799005) | more than 2 years ago | (#39840383)

We have the highest corporate rates, not the highest corporate taxes. After all the deductions, credits, loopholes, etc., our corporations do not generally pay more than in other developed countries. GE and Seimens have pretty similar businesses.

From GE's last annual report:

"Income taxes (benefit) on consolidated earnings from continuing operations were 28.5% in 2011 compared with 7.3% in 2010 and (11.6)% in 2009."

From Seimen's last annual report:

"The effective tax rate was 24% in fiscal 2011 and benefited from the income tax treatment of the Areva disposal gain, which was mainly tax-free. For comparison, the effective tax rate of 29% in the prior year was adversely affected by the goodwill impairment charges at the Diagnostics Division, the majority of which was not deductible for tax purposes."

Re:Do you want MS to relocate more workers to Indi (3, Insightful)

CrackedButter (646746) | more than 2 years ago | (#39840445)

Make tax payable at the same rate everywhere. Simple.

Legal Personhood (2)

hemo_jr (1122113) | more than 2 years ago | (#39840149)

If the courts are going to treat corporations as legal persons, so should the IRS, State, and local tax collectors.

Largest corps dodging taxes? How shocking.... (5, Funny)

Ritz_Just_Ritz (883997) | more than 2 years ago | (#39840157)

I'm shocked....shocked, I say! Billion dollar companies hiring lawyers to create, and then exploit tax loopholes for their own (and their shareholders') benefit? There ought to be a law...oh wait!

Race to the bottom (1, Insightful)

TubeSteak (669689) | more than 2 years ago | (#39840163)

This is what competition between the States brings us.
Corporate profits are up, wages are flat, and State tax revenues are down.

Just wait till property taxes get reassessed downward and State tax revenues plunge even further.
It's hard to talk about this without sounding like a partisan, but that's only because one side of the debate wants these kinds of anti-social outcomes.

Re:Race to the bottom (1)

Voogru (2503382) | more than 2 years ago | (#39840211)

So does that mean you're okay with monopolies? Sounds to me like you don't want competition, which means you want a monopoly power. Not only that, but you want a monopoly power that has the power to force you at the threat of violence against you to purchase their products whether you want them or not.
Kinda makes microsoft look like an angel...

Re:Race to the bottom (1)

AK Marc (707885) | more than 2 years ago | (#39840341)

Competition is a good thing, except when it isn't. Politicians doing something to look like they are doing something and competing against other politicians isn't a game that will have a good result for any of us.

Re:Race to the bottom (0)

Anonymous Coward | more than 2 years ago | (#39840361)

Nice to to take things out of context. Monopolies are bad since they hurt the consumer, only to benefit the company. The GP mentions that competing states hurt the states,only to benefit companies. You may disagree,but saying something like "you are okay with monopolies" is either disingenuous, or just stupid, because the original line of reasoning is consistent, and microsoft execs are not angels.

Re:Race to the bottom (0)

Anonymous Coward | more than 2 years ago | (#39840409)

This is a competition where the "winner" state *may* get more jobs, gets lower corporate tax revenue, and has all the same costs. The losers in this case are the citizens in that state who have to pay more in personal taxes to make up for the lost revenue from corporate taxes. This assumes that there isn't a net payoff in terms of more people earning more and therefore paying more in personal income taxes anyway (it's better to have a job). In the case of "post-office box" companies, though, the net payoff from this is unlikely indeed.

I think you're confusing corporate/product monopolies with government monopolies on such things as paying for roads, streetlights, police forces, that sort of thing, which *somebody* has to pay for if the companies don't.

Re:Race to the bottom (1)

Anonymous Coward | more than 2 years ago | (#39840259)

All countries compete with each other for commerce and trade. Why shouldn't states as well? As long as it's fair commerce, competition is good. Let the markets decide what the fair tax rate, compensation, services, and cost of living are. Of course in order for that to happen, the federal government would have to get out of the way, which will probably never happen.

Re:Race to the bottom (1)

TubeSteak (669689) | more than 2 years ago | (#39840429)

All countries compete with each other for commerce and trade. Why shouldn't states as well? As long as it's fair commerce, competition is good.

Step 1. Set up subsidiaries/shell corporations to evade/avoid taxes
Step 2. Get called out on it by the IRS or other enforcement agency
Step 3. Use some of the money you earned by tax evasion/avoidance to stall the court case for years
Step 4. Settle for a fraction of what you really owe
Step 5. Profit!!!

I usually don't respond to ACs, but what makes you think this qualifies as "fair commerce"?
And while I'm challenging your basic assumptions, what do you think makes commerce fair or competitive?

Race to the bottom - only for "bad" states. (0)

Anonymous Coward | more than 2 years ago | (#39840433)

"It is not a tax problem, it is a spending problem".
Taxes collected swing [wsj.net] with the economy, but spending gets ratcheted up and never swings down. Especially here in California - the spenders see a bubble of income and they lock-in spending like the party never ends. LA is broke, but a bunch of employees are getting a 10% raise - are you getting a raise? Why public employee unions are even legal, I don't know. Talk about a conflict of interest...

The US has the highest corporate rates of the G7 [taxpolicycenter.org]

sidestepped? (0)

Anonymous Coward | more than 2 years ago | (#39840167)

you Slashtards are effin' stupid - really!

Why is this a story?? (0)

duck99 (1318857) | more than 2 years ago | (#39840173)

Big companies hire accountants.. these accountants show them how to doge taxes *LEGALLY*.. You would be stupid to pay taxes you don't *HAVE* to. Publicly traded companies especially will doge taxes, their shareholders (Rightfully so) want to get as much money as possible.

Re:Why is this a story?? (0)

Anonymous Coward | more than 2 years ago | (#39840203)

Didn't see anyone claim it was illegal. Nice strawman you built there.

More taxes, less revenue. (2)

Voogru (2503382) | more than 2 years ago | (#39840197)

I wonder how much tax revenue Washington State will get if Microsoft just up and leaves the state if Washington State 'punishes' Microsoft. What's 100% of zero again? I'm not good at math but I think it's zero...

Re:More taxes, less revenue. (1)

Billly Gates (198444) | more than 2 years ago | (#39840345)

I wonder how much tax revenue Washington State will get if Microsoft just up and leaves the state if Washington State 'punishes' Microsoft.

What's 100% of zero again? I'm not good at math but I think it's zero...

A lot more. MS uses programs like the CS from Washington University to hire its graduates. The state pays for the demand and its workers through large debt and MS gets a free ride and hands the bill to the tax payer.

If MS left it would put less strain on the state since they do not pay taxes anyway. Washington State would be more balanced.

Re:More taxes, less revenue. (0)

Anonymous Coward | more than 2 years ago | (#39840393)

Perhaps the states could also refuse to buy MS software and opt for freer, more open alternatives. I wonder what percentage of these giant corp's income comes from selling their shit to the taxpayer?

Re:More taxes, less revenue. (0)

Anonymous Coward | more than 2 years ago | (#39840471)

While we're on the subject, the computer industry is probably one of the most subsidised in history. Ignore for a moment all the government cash to develop the technology in the war and afterwards. Put aside the military being the number one electronics purchaser for decades. Or things like the Arpanet evolving into today's most beloved Friendface porn lolcat net or GPS that allows directionally-challenged smartphonsters to locate both their arses and elbows. I guess we could even ignore the huge push over the years (mainly by the IT industry) to teach computing using equipment they supply with ever-changing software & languages they also supply. What I'm more interested in is the staggering amount of cash spent on computer equipment in schools, colleges, government offices and the like along with all the technical infrastructure the military uses (NSA for example). Once you get to the supercomputer level most of the world's fastest machines are purchased for stuff like nuclear weapons research, weather/climate simulation and so on.

So taxpayers give them money and they give us.... uhhh, what exactly???

Re:More taxes, less revenue. (1)

Voogru (2503382) | more than 2 years ago | (#39840441)

But billy, what about all of the taxes that they collect from their workers, including the property taxes on their homes? Doesn't Microsoft being in WA also drive up property values in certain areas? The truth is, if they leave, WA gets even less money.

Re:More taxes, less revenue. (0)

Anonymous Coward | more than 2 years ago | (#39840497)

So, how do you propose that the workers that Microsoft depends on be educated? Do you have a means of making this happen that will actually function properly, or are you just all for no taxes for companies that enjoy the benefit of public services?

oh great here comes the filler (1)

Osgeld (1900440) | more than 2 years ago | (#39840217)

every day for god knows how long, company X is evading taxes though some loophole, and yet nothing will ever be done about it ... both the taxes and the filler

Blatant Lie. (3, Insightful)

NalosLayor (958307) | more than 2 years ago | (#39840231)

As someone who has physically visited Microsoft's "Nevada Tax Dodge", I can tell you that they have hundreds of people employed across three office buildings, doing real work. Here's a street view: http://maps.google.com/maps?q=microsoft+licensing,+GP&hl=en&ll=39.466978,-119.777091&spn=0.014196,0.027874&oe=utf-8&client=firefox-a&hq=microsoft+licensing,+GP&radius=15000&t=m&z=16&layer=c&cbll=39.465765,-119.778911&panoid=SCavTRVJLjF335ijk_l6-w&cbp=12,0,,0,0 [google.com] The white buildings to the left and right of the frame are wholly occupied by MS while the brown building in the center has one whole floor occupied by MS employees. Declaring that MS has no right to do business in states where taxes are lower is...well, disgusting.

Re:Blatant Lie. (3, Insightful)

TubeSteak (669689) | more than 2 years ago | (#39840437)

Declaring that MS has no right to do business in states where taxes are lower is...well, disgusting.

Declaring that MS has no right to shift income to states where taxes is lower is... well, reasonable.

Re:Blatant Lie. (0)

Anonymous Coward | more than 2 years ago | (#39840481)

Implying that any company should pay taxes it can legally avoid is... well, stupid.

Hey, wait a minute.... (1, Troll)

Voogru (2503382) | more than 2 years ago | (#39840241)

If the people really want all of the things that the governments offer them, why don't they want to pay for them?

Why not just make all of these systems voluntary, if people really want them, they'll pay into the system.

Oh right, I forgot, the majority of the population wants to force a minority of the population to pay for things they want at threat of violence against them. Right.

Re:Hey, wait a minute.... (1)

AngryDeuce (2205124) | more than 2 years ago | (#39840427)

Oh, those poor, poor millionaires. How hard their lives are.

You honestly don't expect anyone to have sympathy for these guys, do you? If their fortunes are too much of a burden, I'm sure they can find plenty of people willing to take it off their hands and pay 10 times the tax rate these fucking assholes do with a fucking smile on their face the whole time.

Re:Hey, wait a minute.... (1)

Voogru (2503382) | more than 2 years ago | (#39840457)

Psst, you're probably working for a millionaire. And if you're not, chances are your income is based off of investments from those same evil millionaires.

Re:Hey, wait a minute.... (4, Insightful)

AngryDeuce (2205124) | more than 2 years ago | (#39840487)

Psst, they profit off of my labors, or else I wouldn't have the fucking job in the first place. So clearly, they're getting a little something out of the arrangement, too.

Oh, sorry, is that not properly deferential? Or are we going to suspend all logic and pretend that these guys hire us out of civic virtue alone?

Confiscation (-1, Troll)

roman_mir (125474) | more than 2 years ago | (#39840253)

Government will eventually be confiscating ever more businesses (GM 'bailout' was a huge confiscation, the bondholders lost everything to the government, which confiscated their property and then redistributed it to the unions).

I mentioned this earlier [slashdot.org] - the economy is getting so weak due to all of the government intervention into it, that eventually the totalitarian Neanderthals in it will be forcing companies that still make a profit (likely because they have a large foreign customer base) to pay various windfall taxes to US government. Holding USD denominated assets is becoming more and more dangerous.

Re:Confiscation (1)

Voogru (2503382) | more than 2 years ago | (#39840303)

Shut up citizen.

When government intervention fails, it's because we did not intervene enough! Everybody knows this. Where did you get your economics degree citizen? It sounds to me like you are spewing unapproved economics!


Citizen, pick up that can.

Re:Confiscation (0)

Anonymous Coward | more than 2 years ago | (#39840347)

And it was also a bailout. You know, the thing that actually seems to have saved the company.

Say what you wish, but a bailout like that makes the government a pretty big investor in the company. Probably one of the major bondholders.

Re:Confiscation (1)

roman_mir (125474) | more than 2 years ago | (#39840373)

You know, the thing that actually seems to have saved the company.

- it's a good thing you type this as AC, otherwise we'd see who is really retarded here.

Saving a company by confiscating it from the owners?

Saving a company by CONFISCATING IT from the OWNERS?

Well, if you believe that the company's purpose is to provide jobs and that the purpose of a government is to ensure that owners get shafted, then they 'saved the company'.

You are such an cretin. A company is built and exists only for ONE PURPOSE: to make money for the owners.

If it loses the money for the owners, the company is failing. If it loses all the money for the owners by being confiscated it has failed completely. That company has completely failed, just like your brain.

Re:Confiscation (2)

Billly Gates (198444) | more than 2 years ago | (#39840503)

Didn't Gm pay almost all of it back.

It is not confiscation if its shares are purchased. Its called capitalism. They asked if they needed a bailout and said yes. Obama said fine and purchased the stocks and then became the new owner. As the largest shareholder he fired the CEO for being incompetent. Now they paid nearly all of it back and the new board is fairly independent.

Common (0)

soundguy (415780) | more than 2 years ago | (#39840333)

This isn't solely a strategy of large corporations. Thousands of small businesses have also incorporated in Nevada or Delaware to get away from our idiotic state "Business and Occupations" tax, which can be as 1.8%. B&O is levied against your GROSS sales and there are NO deductions. That means if you have around a 5% margin (not uncommon in competitive markets), you can lose upwards of 40% of your net income to the state for the "privilege" of doing business here. But wait, it gets worse. A lot of cities have their own B&O taxes that get added on, so you can kiss even more of your meager profits goodbye.

I don't blame anyone for getting the hell out of here. It's a nice place to live (if you like 9-10 months of cold temperatures, rain, and grey skies) but it's a crappy place to operate a low-margin business. That's why you see so many high-priced art galleries and retailers specializing in hipster crap with a 500% markup. they're the only ones who can afford to pay the government vig.

Re:Common (0)

Anonymous Coward | more than 2 years ago | (#39840385)

If its a nice place to live, it usually means that the state is spending quite a bit of cash to make the place nice. Is it unfair of the state to get some of the money they spend on making the whole thing nice in taxes. Since you are using their infrastructure as well.

They shouldn't have those pay taxes (0)

Anonymous Coward | more than 2 years ago | (#39840339)

I don't get it, why should companies pay taxes on overseas income? Why is USA the only developed country with this type of tax structure? Somebody who is an expert on international taxation explain to me why does USA implements taxation on worldwide income?

Apple... Microsoft... (0)

Anonymous Coward | more than 2 years ago | (#39840365)

this won't work with Wikepedia, but I wonder who the next SOPA/PIPA opposer is that's up for some 'treatment'.

Political Theater (1)

djl4570 (801529) | more than 2 years ago | (#39840371)

and how it's led indirectly to $4 billion in K-12 and Higher Education cuts since 2008

That's political theater. Cut education and call a press conference while ignoring the cesspool of waste and mismanagement that permeates government bureaucracy.
News flash: Taxes are a cost of doing business. Costs of doing business are passed on to the consumer. Microsoft and Apple would not pay these taxes in any event. Their customers would pay them through higher prices.

This seems to be expected from all businesses (1)

damn_registrars (1103043) | more than 2 years ago | (#39840401)

From what I have seen, businesses with as few as one employee actively seek out ways to cheat the tax code. Naturally, the larger businesses find even more creative ways to do it, to preserve even more of their own money.

Now, is this a good argument for a "flat tax"? Probably not. In reality, if there were a flat tax implemented at the federal and/or state level, you could count on the congressional powers that be to grant special favors to their favorite sponsors that would make it far less than "flat". Even if the tax code were reduced to fit on a post card, there would still be kickbacks and favors to retain the current system of steeply regressive taxation.

Oh my! (0)

Anonymous Coward | more than 2 years ago | (#39840413)

The state giving preferential treatment to large corporations, shocking. With just a bit more power they'll start using it for good, you'll see. Obama/Romney 2012!

i wouldn't (0)

Anonymous Coward | more than 2 years ago | (#39840449)

i wouldn't want my tax money ending in the US either....
it just ends in war anyway, because you're the ricky retardo nation of the world still wondering why their prisons are so well filled...

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