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Keeping Microsoft Happy 395

Posted by michael
from the anywhere-he-wants-to dept.
Jeff writes "In Citizen Microsoft, I report on Microsoft's use of Nevada corporations to avoid approximately $327 million in Washington state taxes while telling voters they need to pay more to fund education. I also contrast Microsoft's attacks on the open source community with its in-state lobbying efforts and its recent promise to get more involved in local politics. The cover has Gates in a gorilla suit."
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Keeping Microsoft Happy

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  • Bananas (Score:2, Funny)

    by mfh (56)
    Keeping Microsoft Happy ... The cover has Gates in a gorilla suit.

    Lots and lots of bananas.

    I report on Microsoft's use of Nevada corporations to avoid approximately $327 million in Washington state taxes while telling voters they need to pay more to fund education.

    Now that's a monkey business!
    • Re:Bananas (Score:5, Funny)

      by kundor (757951) <<gro.fsf.rebmem> <ta> <rodnuk>> on Friday October 01, 2004 @11:10PM (#10410965) Homepage
      I've always thought of him as more of a chimp than a gorilla. I mean, gorillas are imposing and can appear wise, whereas chimps are little scamps who'll try to get away with anything.
    • Actually, I would think that this [telcontar.net] was more like monkey business ;)
  • No way (Score:4, Funny)

    by Kell_pt (789485) on Friday October 01, 2004 @11:09PM (#10410952) Homepage
    I must say no willing gorilla would allow its body to be used in such a photography. It's an outrage!
  • The Article. (Score:3, Informative)

    by Anonymous Coward on Friday October 01, 2004 @11:10PM (#10410963)
    SW Logo

    September 29 - October 5, 2004

    Citizen Microsoft

    It's time we stopped acquiescing to the behemoth in Redmond, because what's good for big business isn't necessarily good for Washington.

    by Jeff Reifman

    By any measure, Microsoft is capitalism's greatest success. In July, the company announced plans to distribute $75 billion in dividends to shareholders over the next four years. One executive, in a morale-boosting internal e-mail, recently called Windows the most successful product in history. Even Googling "corporation" returns Microsoft at the top of the search results. But what has been best for Microsoft's shareholders has not always been best for Washington taxpayers and our community.

    Every time Microsoft hires someone in Washington, it creates 3.5 new jobs here. According to the company, Microsoft created an estimated 117,620 new jobs in Washington between 1990 and 2001. But while Microsoft promotes the positive impact of success, all this growth has placed a heavy burden on our schools, roads, and overall livability.

    Recently, Forbes ranked Seattle as the most overpriced city in the country. Our school class sizes are the fourth largest in the nation. Washington's percentage of residents enrolled in college ranks 46th out of 50 states. Seattle teacher salaries rank 97th out of 100 major cities. Our traffic is the 17th worst in the country. And let's not forget more than 167,000 Washington children without health care and the growing ranks of homeless citizens staking out highway off-ramps in search of handouts.

    Most of us accept on faith that what's good for business is good for our state. Our Legislature spends much of its time trying to make Washington a competitive choice for businesses. But it's about time we started asking hard questions about where our competitiveness is taking us and who is pushing the agenda. How is it that with one of the richest corporations in the world in our backyard, our state has become less livable?

    Tax exemptions are the mantra of Washington's Legislature. As Seattle Weekly reported earlier (see "$64 Billion Falls Through the Tax Cracks," Feb. 18), the state has amassed 503 business tax breaks valued at $64 billion per biennium budget. Cheered on by corporate lobbyists, including Microsoft's, Gov. Gary Locke and lawmakers implemented $20 billion of those exemptions in just the past four years. Last year, the state granted an additional $3.2 billion in breaks over the next 20 years to entice Boeing to locate the 7E7 assembly plant in Everett instead of some other state. Meanwhile, Forbes reports, Seattle ranks in the bottom fifth of major cities in job growth, income growth, cost of living, and housing affordability. And the state is predicting a $3 billion deficit by the end of the decade. As Microsoft's shareholders begin to reap their $75 billion dividend, they leave a growing infrastructure deficit in Washington.

    That's the result of good times. Until now, Microsoft has enjoyed tremendous financial success. But it's entering a new era of software competition. It won't be able to rely on the dominance of the Windows operating system to be profitable. In fact, Microsoft's dependence on revenue from Windows and its other flagship product, the Office suite of applications, makes it vulnerable to new and increasingly popular alternatives to those now-ubiquitous programs. The free market is responding to the monopoly in Redmond. It's going to get tough. Meantime, last week the company said it plans to become far more active in Washington politics than in the past, citing the business climate, education funding, and transportation as areas where the state can do better. These aren't improvements with which Microsoft wishes to help. These are areas of concern the company wants remedied at taxpayer expense. If you want to anticipate how Microsoft might approach these and other local issues as the software business becomes more challenging, you need to study the company's track record with competitors
    • Re:The Article. (Score:3, Insightful)

      by slashname3 (739398)
      Playing tax evasion games is just another way for Microsoft to maximize the money they can collect before their bubble bursts. The $75 billion stock divided is the start of Microsofts decline. They realized that in the next few years their monopoly on the desk top will start to slip away. So they are now starting the process of pulling as much money out of the company as they can. By the time they deliver the next version of their OS there will be a lot of companies that will decide to move to something
      • Re:The Article. (Score:5, Informative)

        by TechnoPope (516563) on Saturday October 02, 2004 @12:09AM (#10411197) Homepage
        So basically, Open Source is suddenly going to eat up all of MS's market share. MS will cease to be. World Hunger will end. And Peace will break out around the world.

        Or...

        Maybe this is the same kind of analyzing that gets done on Apple every six months saying that it will go under. Let's just be honest for a second. Microsoft isn't going to go away. They may not be THE market share holder forever, but they aren't going to go away. The beauty of software is that people have a choice. Just like you can choose to use linux (or BSD,OSX,Netware,BE, whatever floats your boat), people can, and will, choose Windows. As great as Linux is, it has quite a few shortcomings, as does Windows, as does OS X. Everybody is basically equal.

        So while their desktop market share will probably go down (at 90% it's hard for it not to), this doesn't mean that Linux will automagically become world leader supreme. Let's not kid ourselves.
      • Re:The Article. (Score:3, Interesting)

        by dbIII (701233)

        They realized that in the next few years their monopoly on the desk top will start to slip away.

        I think they realised that their monopoly on the desktop will no longer give them huge financial growth. There are a lot of windows95 machines out there - they are reaching the point where they are running out of new people to sell an operating system and office programs to.

        Linux also fills the niche of a half decent operating system on the cheapest hardware, which may cut the margins but I think those saying i

    • Re:The Article. (Score:5, Insightful)

      by gcaseye6677 (694805) on Saturday October 02, 2004 @12:17AM (#10411226)
      Sounds to me like Seattle/Washington State's real problem is politicians who are all too willing to give corporations tax breaks. I'm not naive enough to believe that these politicians are not receiving rewards for doing this. Maybe they'll eventually get a clue and realize that having corporations set up shop in the state is not going to generate much revenue for the state unless they are actually required to pay taxes. There is no reason Microsoft is not required to pay Washington taxes, other than the fact that the state government doesn't have the backbone to make them pay.
  • Ironic (Score:4, Funny)

    by whiteranger99x (235024) on Friday October 01, 2004 @11:11PM (#10410969) Journal
    The cover has Gates in a gorilla suit....

    As opposed to Steve Balmer who just jumps and dances around [ntk.net] like one. :D
  • by angryflute (206793) on Friday October 01, 2004 @11:15PM (#10410980) Homepage
    And in other news, the sky is blue, and the sun rises in the East and sets in the West.
  • by Hangtime (19526) on Friday October 01, 2004 @11:17PM (#10410984) Homepage
    all sorts of companies incorporate in Nevada not just Microsoft for this same purpose. In fact, while Delaware is the number one state to incorporate, Nevada follows up close behind because of the lax laws. Just like I'm sure you, your friends, and your family go down to Oregon to do your Christmas shopping so you don't have to pay state sales tax. If you want to close these loopholes then every state needs to have consistent incorporation statutues and laws. The only companies that incorporate in their own state are the ones who can't afford to incorporate in another and/or follow another state's governance laws and procedures .
    • There's no loophole (Score:5, Informative)

      by melted (227442) on Friday October 01, 2004 @11:43PM (#10411110) Homepage
      If you haven't paid sales tax while being in another state you have to pay "use" tax in your home state. This tax is equal to the amount of sales tax you'd have to pay if you made the same purchase in your home state. For someone in WA this means that if they went down to Oregon and spent $1K on merchandise taxable in WA, they owe the state $88 in taxes or whatever they pay in their county.
      • As we all know, nobody would ever think about not volunteering to pay this tax :)
      • Sure. Maybe they owe the use tax, if Washington has a use tax, but quite frankly, how can it be enforced? I can imagine Washington being able to successfully collect use tax on new automobiles, which have to be registered with the state, but there's no way they can determine what a Washington resident bought in another state without a full-on anal probe audit. Does the California Franchise Tax Board know about the brand new Ecco europeon-size 46 boots I bought for 35 bucks on eBay from a seller back east
        • It's enforced on businesses by a draconian policy of auditing every business regularly. When I had a business in WA, my accountant told me you always pay use tax because they will audit you.

          For individuals, the only item I am aware of that they can enforce it on is a car. When you register your car you have to demonstrate that you paid sales tax on it wherever you bought it. If you can't, you pay use tax in WA. You are still required to pay use tax on everything else, but it's difficult to enforce, so

      • and I'm sure everyone is checking that on their state income tax forms come tax time right. Just like I'm sure any item you purchase from a catalog or over the Internet and did not pay sales tax for you sent that in to the state of WA. I have yet to meet any individual (not business and not to say people do not pay this) that has actually paid this tax. I cannot find it at the moment but the actual collection of use tax from individuals is EXTERMELY low.
      • Interesting bit is, it works the other way too. ;')

        Tourists that reside in a state that does not have a sales tax don't have to pay it while in other states. Seem to recall there's a ton of red tape to cut through though, you need some kind of special card that you present at the cash register.

        As you might imagine it's a serious pain in the ass. But growing up, my parents used it whenever we went on vacation.
    • If the US really wants to wake up and join the real world, it would start to pass certain powers to the Federal Govt. That way, it won't have 50 sets of laws based on whereabouts you are in the country at the time. There are certain areas that make sense to be centralised; not only would it make complying with the law easier, but it would save the taxpayers a lot of $$$ in not having to employ fifty sets of state legislature and bureaucracy...

      -- james
      • it would start to pass certain powers to the Federal Govt

        I guess that whole "United STATES" thing just went over your head in high school history class, eh?

        There are certain areas that make sense to be centralised;

        And those areas are enumerated in the Constitution. Try actually reading the document to see what they are. Pay particular attention to the 9th and 10th Amendments.

        not only would it make complying with the law easier

        Since law for everyone, everywhere would be set at the federal level,
        • " guess that whole "United STATES" thing just went over your head in high school history class, eh?"

          You know.. although many of us realize the US is a federation of states.. it presents itself to the world, and generally acts as any other country would. The outside world sees "THE USA", one of may countries. The internal stuff about states and their respective powers is just that, internal.

          Though I realize the distinction is very important to Americans, and very real, it's not significiant to outsiders
    • by Fnkmaster (89084) on Saturday October 02, 2004 @12:03AM (#10411181)
      Well, in general, there are lots of reasons to incorporate in different states other than just saving money on taxes. I don't know what the specifics in Washington state vs. Nevada are, so I won't comment on that. But in Massachusetts, a corporation doing business in the state and registered as a business entity in the state has "nexus" in the state and thus is subject to the corporate excise tax on all income apportioned to or attributable to the state. It doesn't matter where you are incorporated - I run a Delaware Corporation, and still have to pay a minimum 456 dollar excise tax to Massachusetts every year.


      You generally incorporate in a different state to take advantage of their chancery courts, anonymity laws and corporate stucture statutes (allowing more flexible or customized corporate structures, like the Delaware Series LLC for example). And you want to have your corporate entities in a state that doesn't add a substantial amount of tax on top of what you'll already owe to the states where you do business and generate income (Delaware, for instance, charges only a nominal amount of tax every year based on the number of shares outstanding - but like I said, this doesn't mean I don't pay excise or corporate taxes, I still pay them in MA since that's where I do business!). Additionally Massachusetts has a foreign corporation registration fee which makes up for any money you save by registering your corporation in another state - so you literally save nothing (and we're talking about differences here of a few hundred dollars a year, not something Microsoft cares about).


      If Microsoft is doing business in Nevada and attributing income to that state, then that's not really a loophole at all. If they are mis-attributing income, that's just fraud. There are tax loopholes out there, but this article doesn't really make clear what loopholes Microsoft is actually using, or if Microsoft just uses Nevada corporations for business entities and groups subsumed within Microsoft Inc. because of their flexible corporate law. Maybe Washington just isn't as anal as Massachusetts about collecting their taxes from all businesses, or just are failing to enforce the appropriate attribution of income to Washington state? This stuff is always confusing in the software world, since it's not always so clear cut to say where the work was performed and where the income came from.

    • by killjoe (766577) on Saturday October 02, 2004 @12:11AM (#10411205)
      " all sorts of companies incorporate in Nevada not just Microsoft for this same purpose"

      Of course they do. It's just that if you are incorporated in Nevada and are not paying WA taxes then maybe you ought to keep your mouth shut about how WA spends the taxes it collects from other people.
    • by multimed (189254) <mrmultimedia@@@yahoo...com> on Saturday October 02, 2004 @12:12AM (#10411209)
      Ultimately this is a major reason I think we should move to VAT or sales taxes and just get rid of everything else. The fact is major corporations always have a cadre of lawyers to find ways around taxes. And even if they didn't, it really wouldn't matter because the government really can't tax corporations, it can only use them to help collect taxes from individuals. Whatever taxes corporations actually end up paying are just another expense and get taken care of by boosting the cost of their goods and services to cover them. The rich have very high nominal tax rates but considerably lower effective tax rates. Of course I don't actually expect sales/VAT to every become a reality. Tax prepartion and advising is a billion dollar industry. Politicians wouldn't turn their backs on millions of dollars in lobbying money, and the complexity of the tax and budget system is a main source of their power.
      • by km790816 (78280) <wqhq3gx02@sne[ ]mail.com ['ake' in gap]> on Saturday October 02, 2004 @12:56AM (#10411346)
        Sales tax = regressive taxation = hurts the poor much more than the rich

        Poor Boy buys a $20,000 car pays $1000 or 5.0% of his income.
        Rich Boy buys a $60,000 car pays $3000 or 1.0% of his income.

        Conservatives love this, too. When the Republicans took over the Iowa Legislature 10 years ago (and things were good) they cut income tax by 10% across the board (giving a massive break, in terms of real dollars to the rich).

        Years later, when things weren't so good, they raised the state sales tax 1%, which had the same affect: hurting the poor in terms of both real dollars and % of income.

        Let's clean up our existing tax laws first--eliminate the subsidy on SUVs, make it harder to create tax shelters in the Caribbean.
        • Poor Boy buys a $20,000 car pays $1000 or 5.0% of his income.
          Rich Boy buys a $60,000 car pays $3000 or 1.0% of his income.


          I don't see the problem here. It's fair. The word fair means that everyone plays by the same rules.

          If they both buy a $20,000 car, then they both pay $21,000 total. If Poor Boy thinks that $21,000 is too much, then he shouldn't buy the car.

          Is Poor Boy at a disadvantage compared to Rich Boy, who can afford $21,000 for a car? Yes, he is. That's because he's poor. If you want to remedy
          • I don't see the problem here. It's fair. The word fair means that everyone plays by the same rules.

            Errr, what part of "1.0% is different from 5.0%" is hard to understand? Phrasing the "same rules" in flat dollar values is "unfair". Using a percentage automatically scales to every situation, and is therefore the completely fair way.

            Now _should_ things be fair in this way? I'll leave that for someone else. :)
          • If the proper solution is, quote, to give him money, endquote, then wouldn't reducing his tax be the way to do it?

            No wonder you're having trouble understanding your moral framework.
          • Myself, I'm having trouble understanding who would moderated up this self-confessed idiocy. The money you "give" "Poor Boy" has to come from somewhere, which means, in this example, it must come from "Rich Boy". If you're going to do that, you might as well just adjust the tax rates to start with and avoid the inefficiency of a separate program.

            Incidentally, the fact that one Boy is Poor and the other Rich implies that they aren't playing the same game, so the parent post's definition of "fair" doesn't a
          • I don't see the problem here. It's fair. The word fair means that everyone plays by the same rules.

            Right, and fair means at the same cost, or burden to everyone, not the same relative dollar value. Ten percent of a lower middle class income is a huge burden which directly affects their quality of life. Ten percent on an upper middle class income, while more dollars, is hardly any burden. Progressive tax systems allow for a fair burden on everyone, regardless of class.
        • Your example has one huge misleading item in it.
          The percentage of their income that 'Rich Boy' and 'Poor Boy' pay for their cars.
          In your example, 'Rich Boy' pays $60k for the car and $3k for tax, which you say is 1%. That means that he earns $300k/yr, and just spent 20% of his annual income on a vehicle. So he pays 20% on the vehicle and 1% in taxes.
          For 'Poor Boy', he's paying $20k on his car and $1k in taxes, which you say is 5% of his income. That means he earns $20k/yr, and just spent 100% of his annu
      • by Hangtime (19526) on Saturday October 02, 2004 @12:56AM (#10411347) Homepage
        I agree with a national sales tax but as you said it will never happen. Its the same reason we will not have a flat tax either. Gotta keep those tax advisors and the people at Turbo Tax's Intuit unit employed. There is another reason income taxes will not be replaced by either one of these. Income taxes give governments the ability to both reward and punish certain behaviors. For instance, you get a break for giving money to chairity, purchasing an electic car, or putting a child through school. You do not have the ability to reward and punish such behaviors when everyone is just paying a flat rate or paying a tax on goods.

        Also, I would not sign on to a VAT until there was specific language in the law that declared an income tax and VAT could not exist at the same time.
  • by mortram (761154) on Friday October 01, 2004 @11:17PM (#10410986)
    If they wanted to evade $350 million in taxes, all they had to do was threaten to leave the state. It worked for Boeing. In fairness, WA state has a very, very messed up B&O tax... In fact they maintain the most regressive tax structure in the nation.
  • New Math (Score:5, Interesting)

    by Anonymous Coward on Friday October 01, 2004 @11:18PM (#10410993)
    From the article:

    "Every time Microsoft hires someone in Washington, it creates 3.5 new jobs here. According to the company, Microsoft created an estimated 117,620 new jobs in Washington between 1990 and 2001. But while Microsoft promotes the positive impact of success, all this growth has placed a heavy burden on our schools, roads, and overall livability."

    Wow - How could Microsoft be so insensitive as to create jobs.

    However, this also raises the BS meter. I always love when I hear "We create xx jobs for every one we hire". Sounds good... but it doesn't add up. To even out, there has to be a job somewhere that causes -1.5 people to be hired. Other than the 435 CongressPricks, and the one in the Oval Office, there aren't too many jobs like that.

    • Re:New Math (Score:3, Informative)

      Wow - How could Microsoft be so insensitive as to create jobs.

      So, because Ms creates jobs, they shouldn't have to pay income tax? On what planet does that make sense?

      • "So, because Ms creates jobs, they shouldn't have to pay income tax? On what planet does that make sense?"

        The planet where that sort of tax dodge is allowed?

        Your beef's with the gov't, not MS.
    • Wow - How could Microsoft be so insensitive as to create jobs.

      However, what kind of jobs are they creating: jobs from true expansion of the economy, or just jobs from bloat? Most any job (R&D being a major exception) that creates more than -1.0 jobs is inefficiency.

      There has to be a better way to employ everyone than to create jobs arbitrarily.
    • Zero-sum thinking (Score:5, Insightful)

      by Anonymous Coward on Saturday October 02, 2004 @04:14AM (#10411949)
      To even out, there has to be a job somewhere that causes -1.5 people to be hired.

      Wrong! Wrong! WRONG!

      That's zero-sum thinking, and life isn't really a zero-sum game. If Bill Gates gets richer, that doesn't actually mean that poor people get poorer. If you are well-fed, that doesn't actually mean that someone else has to be hungry.

      Microsoft is claiming that for each person they hire in Washington state, the state gets extra jobs. This is because that extra MS employee gets paid, and spends money in the state (at Starbucks, for example, as some other posters said). The money can come from all over.

      And guess what -- we are all richer than anyone was 50 years ago. What do I mean? For $200 I can buy a cool pocket computer on eBay, with colour display and everything. How much would that cost 50 years ago? Oh, they didn't have colour pocket computers, or eBay for that matter. Our health care is better, so our life expectancy is higher. And while pop music sucks now, the cool music from then is still available now, and we can buy cool TV shows on DVD.

      What is the point of the above ramble? It's just this: when someone discovers something cool or invents something cool, the whole world gets a bit richer (at least if that person shares the discovery or the world at least finds out). There is no part of the world that has to get poorer when the rest of the world gets richer. We use money to keep score, sort of, but don't forget that even a billionaire 50 years ago couldn't buy an iPod, or modern health care.

      People think there is a finite amount of good stuff, and the rich people hoard it somehow. That's not how it works.

      If you are writing new tax laws, write them to maximize the benefit to society, not to punish the richest guys. If cutting the tax rate would encourage more spending and make more tax revenues, then do that. But some people will cry that it's unfair because it lets the rich keep more of their money. Because they are using zero-sum thinking to look at the world.

      I really HATE zero-sum thinking.
  • by mblase (200735) on Friday October 01, 2004 @11:25PM (#10411029)
    ...here's a link to the actual article [seattleweekly.com].
  • by erick99 (743982)
    Companies do everything they can do to minimize their taxes. P.R. folks can make any corporate behavior sound like God would have done no differently. Corporate executives like Balmer can come to believe that every thought they have is pure visionary genius and should be shared (i.e. education spending). People will learn these things and become indignant and outraged. Nothing, however, tends to change.
  • by theodp (442580) on Friday October 01, 2004 @11:39PM (#10411095)
    Check out the testimony of Paul Misener [state.nv.us], Amazon's VP of Global Public Policy, as he reminds Nevada legislators who questioned Amazon's failure to pay sales tax that Amazon solved its Washington and Georgia tax problems by closing fulfillment centers in the two states.
  • Who wouldn't? (Score:5, Insightful)

    by NotQuiteReal (608241) on Friday October 01, 2004 @11:41PM (#10411100) Journal
    No, I did NOT RTFA, but, why would anyone pay taxes they could legally avoid? I am not talking about evading taxes, but rather, using whatever loopholes are available to avoid paying more than you must. In the case of a publically held company it would be irresponsible not to.

    This is more an indictment of the various tax laws and the shenanigans of the legislative bodies that enact them than of any company or individual that might take "advantage" of them.

    Legislators, state and federal, have no incentive to make straight-forward, logical, honest tax laws. They get too much gain from making the laws obstuse and full of holes, for special friends.

    Oh, and if you look at any statistics, poor people don't pay enough taxes.

    • by ebuck (585470) on Saturday October 02, 2004 @12:25AM (#10411256)
      I've a father that is a CPA, but don't take tax advise from me, hire a CPA.

      Tax law isn't something that is consistent and fair. It's a hodgepodge of well meaning laws all intended to do various things which will provide the goverment funding while not trying to destroy the economy at the same time.

      That means a person may legally owe (depending on how he files) a whole range of taxes. If you choose to pay more, you're not a single bit more "legal" than if you pay the minimum. Add a few states into the mix, and some off-shore holdings, and I can mentally visualize the complexity of the problem growing.

      As for the poor not paying enough taxes, well that's an opinion. But the lower taxing of the poor is a philosophical argument encoded in tax law. The argument is something along the lines of, well, if we tax them, then they'll never make it to middle class which is where we really make our money. Other arguements like, "big business is really what drives the economy, so they should get a tax break so they can do more business" are also philosophical in nature, but people tend to forget this.

      As a result, you've got a lot of conflicting ideas on what is taxable, what is not, and how much. Just look at the relatively simple tax laws for food. There's literally cases where you can't know if an item is taxable until you lay down some sort of priority on which way you're going to interpert the laws.

      Food is not taxable. Some snacks and candies are. Prepackaged food being consumed on the premises is. Beef jerky is a snack, yet it has a history of being a real food staple. Chewbacca lives on Endor. That means if the stop-and-go has a food court, then the beef jerky should be taxed, but if it lacks one, then no. It's not confusing because of political kick-backs, but because of political do-gooders who really tried to fix it on a case-by-case basis over the last 200 years.
    • Okay. Poor people get all sorts of "unfair" benefits, because those who aren't poor, know their would be anarchy in the streets if you didn't make life tolerable for the poor. So, yeah go ahead, crack down on the lower income persons, and stop giving them free education and everything like that. I wouldn't mind, it's your car I'll be stealing when the riots begin.

      Modern systems of welfare is a reaction to the socialist project, not part of it. If you're rich, be happy it's there.
    • Car Tax
      Property Tax (Directly or included in rent)
      Telco Luxury Tax
      Telco USF Tax
      State Sales Tax.
      County Sales Tax.
      City Sales Tax.
      Sales Tax.
      Gas Tax.

      And a host of other taxes are taxes that the poor do pay. Why is it that when people say the poor pay not tax they always leave those out?

  • Finally! (Score:2, Funny)

    by rts008 (812749)
    Enough is enough! I can't take any more of this animal mistreatment! Call the SPCA; call the Friends of Animals; call the gorilla a lawyer!
  • New article (Score:2, Insightful)

    by hfis (624045)
    "In Citizen Linux, I report on how many Linux users legally avoid paying taxes, as they are strange people who do not like to give their money away. I also contrast the open source community's attacks on Microsoft with its attitude of 'Peace, love and Linux'. The cover has Linus Torvalds in a gorilla suit."

    Would this get posted to Slashdot? I highly doubt it. Seriously, who can blame MS for this one? Raise your hand if you enjoy paying taxes. Hell, the majority of you guys probably wouldn't support pirac

  • by Vampyre_Dark (630787) on Saturday October 02, 2004 @12:21AM (#10411237)

    To keep Mircosoft happy, you give them a big blue button that says "SCREW SOMEONE OVER" in big bold letters. As long as they can keep pressing it, they'll never lose their errections.
    • The button you are referring to actually has "Start" written on it.

      Seriously though, I had to re-read your comment several times before I realised you weren't referring to IBM at all. It should be a "big red" button, not a "big blue" one. :)
  • by javacowboy (222023) on Saturday October 02, 2004 @12:24AM (#10411250)
    Microsoft represents the very worst, most pathological elements of corporations in general.

    Microsoft takes standard coporate psychopathy, and amplifies it.

    This situation is a perfect case in point. They ask for more from more from governments, pay less, and rationalize this greedy behaviour by arguing they "create jobs".

    This is the same kind of arrogance demonstrated by companies that outsource IT jobs. Corporations are mere guests of the jurisdictions in which they operate. If they no longer make their fair contribution to society, then they should be forced to pony up their share.

    We have to pay our share of taxes, despite the skills and labour we offer society. Why shouldn't corporations be held to the same standards and given the same societal responsibilities as individuals?
    • Microsoft represents the very worst, most pathological elements of corporations in general.
      They don't kill anybody by ommission or commission.

      There are much worse companies out there.

      A software company that plays comtemptuous games with the court system which does nasty takeovers and may or may not have stolen its flagship product from a dentist and bought him out afterwards doesn't rate on the scale of international corporate nastyness.

  • How to regulate (Score:4, Interesting)

    by randall_burns (108052) <randall_burns AT hotmail DOT com> on Saturday October 02, 2004 @12:25AM (#10411254)
    There is a serious question of how to regulate companies like Microsoft when they have such concentration of wealth they can basically afford to buy congress and the leadership of major political parties. It really does sound like these companies are destroying the very people and institutions that allowed them to become successful.
  • >The cover has Gates in a gorilla suit.

    Tells a lot about their objective approach!

    What's the big deal? Imagine - they're trying to make money.
    They busted Oracle in California two years ago, others haven't been busted big time yet.
    What the hell does the author expect - to see IBM's sales reps running around explaining customers how to buy white boxes, install Debian Linux and save the government a pretty penny?

    Fucking nonsense.
  • I usually just sacrifice a medium sized animal during the feast of luprecal.... so far it seems to be working.
  • by vulcan_pupil (718417) on Saturday October 02, 2004 @12:36AM (#10411284)
    IMHO, Microsoft is doing exactly what they are supposed to do as a corporation: limit costs, and increase profit. That's what capitalism is all about. Unless I misunderstood that part of economics.

    Hmm, maybe that's why their software sucks so bad. They don't care about making good software, they only care about making good money.
    • Hmm, maybe that's why their software sucks so bad. They don't care about making good software, they only care about making good money.

      I see that as the whole plan from day one. MS software appears to be designed to be just good enough to do the job and run on machines just good enough to keep ticking over while running the software. Historically, if you wanted something good you would get something from IBM, Sun, SGI, Apple, DEC, Honeywell or a dozen others who are not around anymore. For years PCs have

      • Why does that fucking surprise you? This part:

        I see that as the whole plan from day one. MS software appears to be designed to be just good enough to do the job and run on machines just good enough to keep ticking over while running the software.

        How many companies whose entire focus is on making good software survive? NaN is gone. Um, let's see. SCO (the old one) is gone. Hmmmm, so many, I don't even know where to begin. Loki? Who else.....

        The fact is, if you want to make money, you have to focus

    • But as you say, they are doing what a corporation is supposed to do - make money. Any company's ultimate goal is making money. After all, the company is not any good when it stops doing that (something akin to stopping eating). A company that stops focusing on making money will cease to be a company pretty soon.
  • by Mulletproof (513805) on Saturday October 02, 2004 @12:45AM (#10411310) Homepage Journal
    I think it's time to point out Super Obvious Tax Fact #1-- 99% of tax loopholes AREN'T. They are specifically written into law in order to promote free enterprise health, the backbone of this country lest everybody have a lobotomy at the mention of Microsoft. I find it amazing how the submitter portrays this story as MS being above the law and commiting tax evasion when they are doing no such thing. Infact, the submitter (and half yas out there) should be looking at Nevada, who specifically wrote their tax code to encourage companies to set up shop in their state. Companies like -gasp- Mircrosoft. I'm sure you'll be seeing huge crocodile tears shed by the Nevada state government for having to host one of the richest companies in the world.

    Looks like those 'loopholes' worked out pretty well for them.
  • by DavidBrown (177261) on Saturday October 02, 2004 @01:02AM (#10411366) Journal
    Having dug up some info on the California Secretary of State's website at http://kepler.ss.ca.gov/ [ca.gov], I discovered the following:

    1. Apple Computer is incorporated in California, but owns subsidiaries, such as "Apple Computer Peripherals, Inc." that are incorporated in Delaware. Apple even owned "Apple Computer Domestic Subsidiary No. 4", incorporated in Delaware - I guess that ACDS No's 1-3 were too old to be on the Sec. of State's online records.

    2. Sun Microsystems: Almost entirely Californian, but there was a Delaware corporation, Sun Microsystems, Inc. that was created in 1987.

    3. HP? Well, there is a Hewlett Packard Retiree's Club incorporated in California. Agilent? Delaware. The old HP was in California. The new one? I couldn't find it.

    4. Novell? Incorporated in Delaware.

    5. eMachines? Delaware.

    6. IBM? Seems to be in Delaware, but there's a "IBM Global Services India Private Limited" in India. Wonder how much IBM phone support comes from there? (Seriously - I don't know).

    I'm tired and I'm going to sleep, so I leave additional research as an exercise for the interested. The point here is that most of the big corporations seem to be incorporated in "friendly" states like Delaware, or at least have subsidiaries in Delaware the way Apple Computer seems to have, apparently for the purpose of minimizing tax liability and taking advantage of other laws benefiting corporations.

    So is MS ripping off the good people of the State of Washington? Sure. But it's only par for the course, and it's what the other corporations are doing and will keep doing until we amend the constitution, repeal dual soverignty, and eliminate the states as entities with the power to legislate (ie, it ain't going to happen). It's the same thing as "forum shopping" (filing lawsuits in the jurisdiction with the most favorable law, if you can), or even some advanced estate planning techinques (some states have completely repealed the Rule Against Perpetutities, which allows people to create trusts domiciled in those states that can, literally, last forever).

    Hell, want to know the biggest corporate scam?

    1. Buy an asset owned by a municipality - a bus, subway car, sewer system, for an example.
    2. Lease it back to the municipality for an amount roughly equivalent for what you paid for it amortized over a few years.
    3. Depreciate the hell out of it and pay little or no corporate taxes, ever.
    4. Once you've milked the depreciation, sell the asset back to the municipality for a nominal value.
    5. Lather, rinse, and repeat.
    6. ??? (couldn't resist)
    7. Profit.

    The loopholes exist, and corporations (and people) take advantage of them. And when they don't exist, lobbyists convince legislatures to create them. Are we doomed? Not really. Washington may be whining over a few hundred million bucks, but it's not as if the state government has collapsed. Yet...

  • Since when...? (Score:3, Insightful)

    by comwiz56 (447651) <comwiz@gmai[ ]om ['l.c' in gap]> on Saturday October 02, 2004 @01:04AM (#10411370) Homepage
    Since when has it been illegal to legally make money?
    • Re:Since when...? (Score:4, Insightful)

      by PitaBred (632671) <[gro.sndnyd.derbatip] [ta] [todhsals]> on Saturday October 02, 2004 @03:15AM (#10411803) Homepage
      That's the problem with Americans though. We seem to think that if something isn't codified as being wrong, it must be right.
      I call shenannigans. Too many people no longer even CARE what's right, just what they can get away with, legally, or sometimes in the grey area. As long as you don't get caught, it's ok, right? I mean, if it was legal to kill someone (to take this to it's absurd extreme. Or not so absurd, if you take into account side-effects of unemployment, outsourcing and loss of resources), I may as well do it, right?
      This malaise has transferred to our corporations as well. Not all of them, as mentioned in the article, corps like DuPont try to be good citizens. But they're unfortunately a minority. Don't you ever question why America has by orders of magnitude the largest per capita population of lawyers? Because we want to squeak through any crack we can, and take what we can by threading the needle through complicated legalese. Not because it's right, but because we want to outwit the system and get something. Whether it'll hurt others or not.
      Gah. Anyway, I'm tired, and slightly tipsy. I hope this rant made sense.
  • Nevada makes sense (Score:5, Interesting)

    by AaronW (33736) on Saturday October 02, 2004 @01:13AM (#10411388) Homepage
    I was recently involved in setting up a corporation and rather than set it up in my own state, there were advantages, other than taxes, for setting it up in Nevada. You will notice, for example, that many companies are incorporated in Deleware or elsewhere, often for the better legal protection provided by that state's laws. For example, trying to sue a Nevada corporation may be more difficult than many other states.

    In our case, taxes were not the intent at all. We still pay local state taxes as well, so the savings are not that significant. There is some tax savings since some of the taxes are paid to Nevada instead, but nothing significant.

    Now what I do feel bad about is how some companies set up their offices offshore in places like the Caymen islands to avoid federal income taxes or other federal laws. If a US based company does this, then they should not get the benefits of being a US company. I also feel that the federal government should not be allowed to sign contracts with companies that do this. I.e. why should my tax dollars go to Haliburton when the company sets up offices (usually just a mail stop) in places like the Caymen islands or elsewhere to not only avoid paying US taxes, but to also circumvent US laws and do business in places like Iran.
    • by killjoe (766577) on Saturday October 02, 2004 @02:06AM (#10411539)
      "I also feel that the federal government should not be allowed to sign contracts with companies that do this. "

      This needs to be carried further. In this example if MS is setting up shop in Arizona because they want to pay less taxes and shirk more responsibility then the state of WA should not do business with them.

      The same concept just one little step further.
  • common sense (Score:4, Insightful)

    by Anonymous Coward on Saturday October 02, 2004 @01:15AM (#10411395)
    Just because, in the opinions of other /. posters, every other corporation is slanted and corrupt does not make the crimes of Microsoft any more legal.
  • M$ Hypocrisy (Score:5, Insightful)

    by Anonymous Coward on Saturday October 02, 2004 @01:40AM (#10411465)
    For all you brainless posters who are sarcastically dismissing M$'s actions as acceptable corporate strategy - you are missing the whole *POINT* of the article!

    The problem is not ONLY with M$ avoiding taxes, but their HYPOCRISY, since at the same time they are spouting out of their backend about how the residents are not paying enough and trying to get the people to pay even MORE taxes.

    What a bunch of BS! If I were a resident of WA, I'd want to kick them out.
  • PLUG! (Score:3, Funny)

    by Malicious (567158) on Saturday October 02, 2004 @02:20AM (#10411585)
    1. Write inflamitory story
    2. Put picture of Gates in gorilla suit
    3. Advertise to flamers on slashdot
    4. Profit!
  • by zonix (592337) on Saturday October 02, 2004 @03:59AM (#10411914) Homepage Journal

    "The clown can stay, but the Ferengi in the gorilla suit has to leave!" :-)

    z
  • by mjh (57755) <mark AT hornclan DOT com> on Saturday October 02, 2004 @07:46AM (#10412427) Homepage Journal
    ...why is this op/ed piece in a section titled "News"?

    Here are some excerpts from the piece:

    But it's about time we started asking hard questions about where our competitiveness is taking us and who is pushing the agenda. How is it that with one of the richest corporations in the world in our backyard, our state has become less livable?

    ...
    These aren't improvements with which Microsoft wishes to help. These are areas of concern the company wants remedied at taxpayer expense.
    ...
    Ballmer had to know, however, that Microsoft wouldn't be footing much of the bill if taxpayers increased education funding.
    ...
    Microsoft has been hypocritical about taxes and education.

    How can anyone call those things "facts"? Their opinion. Now, I don't mind op/ed pieces. But this is reported under the title of "News". If you want to express your opinions, that's fine. Just don't tell me you're trying to express fact when you're expressing opinions.

    If we in the OSS world, want to beat Microsoft, we can't accuse them of FUD at the same time that we're practicing it.

    $.02

  • Gorilla logic flawed (Score:3, Informative)

    by SysKoll (48967) on Saturday October 02, 2004 @10:50AM (#10413079)
    Says the article: Gates said, "If you don't want to create jobs or intellectual property, then there is a tendency to develop open source," according to Asia Computer Weekly. Gates knows that competitors are taking in billions of dollars in open-source-related revenue.

    IBM is creating almost 20,000 jobs this year and has a booming intellectual property business, fuelled by the record 3000 patents granted yearly to Bug Blue.Yet, IBM is developping a large number of open source projects.

    So the gorilla's logic is flawed.

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