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Why is this man smiling? |
Facing a $2.8 billion deficit and pending insolvency, Washington State’s House Bill 3176 proposes changes to its B&O Royalty tax that would give Microsoft an estimated $100 million tax cut annually and possible amnesty for more than a billion dollars in past tax evasion.
Under current law, all of Microsoft’s worldwide licensing revenues of approximately $20.7 billion annually are taxable at .484 percent or ~$100.1 million. Under the new law, only the portion of software licenses sold to Washington state customers would be taxable – perhaps resulting in less than a million annually in royalty tax from the company.
The lead sponsor of HB3176 is Democratic Representative Ross Hunter, who represents Medina, home to Bill Gates and a number of current and former Microsoft billionaires and multi-millionaires, and other areas around Microsoft’s corporate campus.
BTW, Hunter is a former Microsoft manager.
Thanks, Cináedh
A billionaire with a 2 dollar haircut.
Why isn’t it taxed as normal income?
WaPo writer says, “Lehman Brothers is now dead, while Merrill Lynch lives on. What’s the lesson? Having a single, dominant personality run a global financial business is a recipe for disaster.” Microsoft could be in trouble and be the last to know it. That happened to GM and nobody was giving away free cars. People are giving away software, so go figure. Even toyota is having software troubles. Them’s the brakes.
Old strategic tax evasion. Threaten to move a lot of jobs out of state, and the legislators will cave. Steve Jobs played this hand with Cupertino years ago. Public companies exists to make money for shareholders. If you want to rip capitalism apart and replace it with something better great. But give me a working sustainable model.
It is rude of Washington state to tax their corporate overlords. I’d bet that my state would make them a much sweeter deal to relocate here, and we might even throw in a few hookers to seal the deal.
Tax competition can get cutthroat.
The whole goal of the “Reagan Revolution” was to turn the majority of Americans into hacks for big corporations.
And it worked. And we got this economy.
Sounds about right to me. Corporations don’t pay taxes they add it on to my bill. So why should I be paying a sales tax to Washington State? What do they do for me?
>> # 1 billabong said, on February 15th, 2010 at 8:08 am
>> A billionaire with a 2 dollar haircut.
That’s the conservative vision for America. The richer you get, the less you pay back to society.
Here’s what I say, since corporations now have the constitutional rights of real humans, they should pay the same income taxes as the rest of us real humans — 30%, off the top. No loop holes.
OK with me. I don’t live in Washington.
@ Greg Allen
So it’s the republican’s fault how democrats run the corporations? Opps… do you believe all of the evil CEOs are republicans? Look again.
#4 There’s nothing anti-capitalism about desiring corporations to pay taxes like everybody else.
If you want to stop states from a race to the bottom on corporate taxation then the feds should set a floor on corp tax levels that states can impose.
So does this apply to all corporations or just Microsoft? No problem with trying to make the state more hospitable to corporations to put their headquarters.
Must be a nightmare, having Microsoft and Boeing in your state. Like living next door to a family of alcoholic elephants. You know it’s going to end badly, just smile and wave and wait for them to leave.
And a 100million will help the state?? DONT THINK SO..
#14 Why shouldn’t this income be taxed as regular income? 20B at 15% is 3.5B. That solves the problem.
Sorry, 3B not 3.5B
#8
Businesses do not pay tax, income or otherwise. If a company’s costs increase there are only three choices (which can be done in combination):
1. Increase revenue (generally through higher prices)
2. Lower costs (generally through firing people)
3. Lower profit margin
The very last resort is #3. Thus, a “30% tax off the top” will probably translate into a 30% increase in prices and/or a bunch of layoffs.
WOW,
Thomas has it,
A company PAYS FOR NOTHING, it all(every bit) gets transferred to the CUSTOMER, OR FIRING..
Very seldom do you see those on the TOP take a HIT in the pocket..
Even #3 will end up in LOWER customer service, Fired Employees, SLOWER development.
Uh, where else is Microsoft paying its taxes? I am assuming that it pays taxes in the other countries it operates on revenue earned in those countries. Why does Washington state think it’s entitled to global revenues also?
My state taxes me on money taken by the feds. My city taxes me on money taken by the feds and the state. Why should Microsoft get a better deal than that?