Yesterday, Microsoft announced it had made net income of $5.87 billion in the latest quarter, but had reduced its tax rate from 25% a year ago to 7%. Annualized, that would be about $4 billion incremental in tax avoidance just over the last year. You're probably saying to yourself, "Hey, I'd like to reduce my tax rate by 72% from 2010 to 2011, too! What are some tips from Microsoft on how I could do this?"
In the fine print of Microsoft's July 21, 2011 press release, you can find:
Our effective tax rates for the fourth quarters of fiscal years 2011 and 2010 were approximately 7% and 25%, respectively. Our effective tax rate was lower than the U.S. federal statutory rate primarily due to a higher mix of earnings taxed at lower rates in foreign jurisdictions resulting from producing and distributing our products and services through our foreign regional operations centers in Ireland, Singapore and Puerto Rico, which are subject to lower income tax rates.
Microsoft's tax avoidance strategy wasn't public knowledge until recently. New Is My Business reported on June 7, 2011:
Software giant Microsoft has reportedly been using three jurisdictions where it operates outside the United States — Puerto Rico, Ireland and Singapore — as tax shelters to reduce its federal tax bill, the Financial Times reported.
The strategy is part of Microsoft tax planning methods, details of which the Washington-based company reluctantly disclosed to the Securities and Exchange Commission in its quarterly report filed last month. That was when the company revealed for the first time that most of the $50.2 billion in cash it has amassed is held in so-called “low-tax regional centers.”
If you are wondering why giant American corporations aren't reinvesting their giant retained earnings in creating American jobs, or at least distributing them to American shareholders as dividends or stock buybacks, well, one reason is because they've declared that they just happened to make most of this cash in certain overseas tax havens. Hence, 84% of Microsoft's $50 billion trove of cash is officially overseas, and can't be repatriated without paying American taxes on it which means that American shareholders can't get it and thus can't pay taxes on their capital gains, either. This kind of tax policy would make sense to Rumplestiltskin, Hetty Green, Silas Marner, and Scrooge McDuck, but it doesn't seem to make much sense to me.
For purposes of tax avoidance, Puerto Rico is considered, by the U.S. government, to be an untouchable foreign tax haven, because it's crucial, as Admiral Mahan explained in the 19th Century, for the U.S. Navy to hold Puerto Rico to protect the approaches to the future Panama Canal from the Kaiser's High Seas Fleet and the new dreadnoughts of the Royal Navy. Or something. The U.S. doesn't actually have any military bases in P.R. these days, nor does it have the Panama Canal, but it still has lots of tax breaks for Puerto Rico.
Microsoft has had presence in Puerto Rico for more than two decades. The eastern town of Humacao is where it operates its only wholly owned manufacturing facility in the world. Out of that plant come the millions of software and game CDs and DVDs ...
Furthermore, the Financial Times also reported that some 62 percent of Microsoft’s international income came from the three aforementioned manufacturing hubs last year, even though the two island nations and Puerto Rico only accounted for 42 percent of the company’s international revenue.
A May 26, 2011 article in Caribbean Businss by Jose Alvarado Vega gave some details on Microsoft's Puerto Rica operation that helps Microsoft avoid perhaps a billion or two in taxes per year:
Microsoft Humacao plant poised to capture growing software market
Microsoft's manufacturing plant in Humacao is not only key to the company's regional and global distribution of disk-based gaming and office-computing software, but also is looking forward to Internet-driven, interactive and unified telecommunications media products. More than 90% of all personal computers used throughout the world are run by Microsoft software. Chances are that such software was made and passed quality-control tests at the 123,000-square-foot plant, a continuation of the company's 21 years of innovation-driven manufacturing in Puerto Rico.
Julián Herencia, general manager of Microsoft Operations Puerto Rico LLC, which runs the plant, said the facility shows Microsoft's long-term trust in the local workforce. ...
The plant, built in 2006, makes 80 million CD and DVD software units a year, and has 185 full-time permanent employees. ...
Herencia didn't rule out lobbying for moving some research & development, now done entirely at Microsoft's headquarters in Redmond, Wash., to Puerto Rico. [I don't know if the "entirely" done in Redmond part is true, but the point is that Microsoft isn't doing much in Puerto Rico other than having a 185 people replicating CDs, plus the modest sales office in suburban San Juan I mentioned yesterday. Yet, Microsoft has recently started to claim to make several billion dollars in profits annually in Puerto Rico.]
Now, I get it! You see, Microsoft has over 40,000 employees in the state of Washington in the United States. But they don't actually physically burn on to disks the software they develop. Instead, Microsoft, has a manufacturing plant in Puerto Rico employing 185 people that gets credited in Microsoft's books with a lion's share of Microsoft's Western hemisphere revenue and profits. It's making disks that's the really important thing that Microsoft does.
Despite all you've heard about Microsoft being a software company, they are actually a manufacturing company, at least for tax accounting purposes. To the IRS, Microsoft is basically a Puerto Rican, Irish and Singaporean industrial goliath with a money-losing R&D outpost in Redmond, WA.
I'm picking on Microsoft because they are in the news and they are easy to pick on because very few people like Microsoft. But MS barely made the top ten in piling up cash overseas to avoid paying American taxes. Microsoft didn't invent this tax avoidance technique. Judging by how much their tax rate has fallen over the last year, they only recently jump heavily on this bandwagon.
As for Puerto Rico, it's a really odd story. Imperialism has been in bad odor for most of the last century. There are now a couple of hundred independent countries. But, not Puerto Rico, even though it's a much more plausible nation-state than many existing counties. It's an island. They all speak Spanish. Emotionally, Puerto Rico is a nation with its own Olympic team.
But the way it works is that big American corporations and politicians team up to bribe Puerto Ricans via tax breaks for big American interests into staying part of the American empire, all at the expense of average American taxpayers. Any American who would call for kicking Puerto Rico out of America would be branded a racist, so the thought never even crosses anybody's mind.
It's another one of these Hi-Lo teamups against the Middle that have been so successful in recent decades.
A reader writes:
As for Puerto Rico, it's a really odd story. Imperialism has been in bad odor for most of the last century. There are now a couple of hundred independent countries. But, not Puerto Rico, even though it's a much more plausible nation-state than many existing counties. It's an island. They all speak Spanish. Emotionally, Puerto Rico is a nation with its own Olympic team.
But the way it works is that big American corporations and politicians team up to bribe Puerto Ricans via tax breaks for big American interests into staying part of the American empire, all at the expense of average American taxpayers. Any American who would call for kicking Puerto Rico out of America would be branded a racist, so the thought never even crosses anybody's mind.
It's another one of these Hi-Lo teamups against the Middle that have been so successful in recent decades.
A reader writes:
I happen to have a bit of inside knowledge on this one. MS ships blank
disks to their overseas operations, which then burns them onsite for resale
to foreign markets. MS then shows US income for the 10 cents or so the disk
costs, while the "profit", that results from the completed packages is
booked to foreign operations in that country. Pretty slick.
How do I know this? 'Cause Bill himself told me in a meeting before I
retired from MS in 199X.
Posts
58 comments:
Are you going to comment on Oslo or not?
If Microsoft claims they're generating billions in profits in Puerto Rico, you know some bullsh*t must be going on.
Note: the FT in reporting unflattering things about American in theory companies does a better job than the WSJ. It is good to check them out, the first year they only charge $99 which is not a bad deal.
Microsoft has a money-making office suite, is losing money on phones, is barely breaking even after a decade or more of losses in gaming, and is losing profits in OS. It is stable, but its growth days are far behind. Its basically the Exxon-Mobil of software. There's nothing wrong with being a big, scale-advantaged behemoth with low growth rates but cash cow. But that's not going to get really hot programmers looking to make a name or gain an edge come and work there.
Okay, remind me again why corporations should pay any tax at all?
So when are these tax-eva- er, tax-reducing measures coming to Costco? You know, Legal Zoom style.
In other words, what are the hurdles? Does Joe Citizen have to pay big fees only big firms can pay? Or is it just a matter of paperwork? Hell, can a bunch of Joe Citizens get together and form a corporation to share costs?
"Sorry Uncle Sam, my checks come from Singapore, I'll take the 7% rate, kthanxbye."
It's got to be just a matter of time before the playing field starts to level out. Otherwise what is the information age for?
Microsoft foreignizes the workforce and then foreignizes the revenue. Remind me again, how is this an American company?
Instead of blowing his money on go nowhere causes like his "Small Learning Communities", Bill should just hire Americans and pay taxes. Trust me, the American people would appreciate it a lot more.
It's a sign of the ages that you can get out of taxes and screw over American programmers, but somehow you're considered a saint for burning cash on this sort of BS.
So ideally, Microsoft would pay taxes how many times? Because the single time they do apparently is not pleasing you. You want them, what, triple taxed?
You're secretly Obama, aren't you?
froginblender: Okay, remind me again why corporations should pay any tax at all?
Answer: Otherwise, (rich) people would just legally declare themselves personal corporations, and nearly all of their activities and ordinary living expenses would become tax-deductible. Or so I've heard claimed.
I really think this sort of broader issue is very useful in separating out "conservative morons" (or perhaps corporate shills) from people with even just a tiny grain of sense, of whatever ideology. My guess is that something like 95% of the members of Congress fall into the former category, either actively or passively.
"Are you going to comment on Oslo or not?"
Obama's going to make an official state visit and tour the wreckage with Bill Ayers.
Actually I would put high odds on Obama making an official visit for the memorial service. It's a chance to get in a not-so-subtle dig at his right-wing critics. If so, it will happen at the same time the US government is (allegedly) on the edge of the financial abyss.
"Okay, remind me again why corporations should pay any tax at all?"
Ever heard of not putting all your eggs in one basket? There will always be large numbers of people capable of avoiding certain taxes. By spreading around the burden, you reduce the number of people able to avoid all taxes.
remind me again why corporations should pay any tax at all?
For the same reason people should?
I like your focusing on this topic. Only problem: how do you keep corporations from simply locating in the countries that give them the best deal on tax breaks?
Want to avoid taxes? Here's the phrase: Indian Reservation. Yes, you and yours as members of an approved Indian tribe enjoy tax exemptions from local property taxes, state taxes, and even federal income tax (if your income is earned on land held in trust by USG within the borders of a Reservation.) So get busy one and all, gather up your enrollees and petition the BIA to become a recognized Indian tribe.
The lesson is that the US has a stupid and malevolent business environment, just as it has a stupid and malevolent immigration policy.
Corportations take advantage of our stupid environment, including trying to make is worse if they think they can benefit from the worsening.
But the root of the problem is the government and it's laughable con-man sales pitch that it can be all-knowing, all-powerful and supremely wise.
And the voters who fall hard for this con every time.
research & development, now done entirely at Microsoft's headquarters in Redmond, Wash.
Not exactly. Microsoft has several R&D Centers abroad with one in Israel being the biggest.
My chief disappointment with the comments to yesterday's piece on Kaplan's brilliant advice for Canada wasn't the fact that people picked on the Jews. Of course having Jewish parents and a Jewish last name but none of that commonly assumed Jewish gold means that I'm a tad concerned about any sort of serious antisemitic movement afoot but my chief exasperation was with the cowardice and, what seemed to me to, downright ignorance of this bunch that they'd jump to hating on some particular minority when that minority is AT BEST a proxy for those who TRULY run the show of keeping us enslaved to a world they restructure to their own benefit and our detriment - the wealthy.
Now. Wealth is a relative term. A great deal of what Steve and I say about Bill Gates can be accurately said about us by Indian villagers. True Enough. I'm not playing any moral card here, just the rational, self-interested one. To that extent, I want to see a parting of the ways here among commentators on this board . At the moment, as a member of the lower middle class economically I regard anyone (with rare exceptions of course) making over 120K/yr or in possession of commensurate wealth as my enemy and, if you're in a similar boat you ought to as well. Whether you understand economic principles or not (and no, this isn't an invitation for an enlightenment by 'Reason' or 'Newsmax' readers) the fact is that these people are waging war against you and doing it so successfully that they've even castrated your emotional ability to fight back.
All I ask that you take your ideological balls back from them. To demonstrate my ineffectiveness as a propogandists I'll paraphrase the commies again (who, it needn't be said, were bloody murderers - obviously), you may not be interested in class war but class war sure as hell is interested in you.
By all means despise the trust-fund descendants of the Kaplans of the world but you do yourself and your children a disservice if you choose to extrapolate from the rotten civilization-destroying wealthy Jews of the world to "Jews" as a class rather than to "the wealthy" as a class.
[Responding with some witty riposte about a poor Jew who's a dickwad or a wealthy guy who's a benefactor will be easy. Reconsidering your prior assumptions won't be. It's ours to choose.]
What's wrong with just eliminating the corporate tax? Won't it just result in higher salaries/bonuses that'll be taxed instead?
But I guess we're screwed either way, they'll probably find a way to avoid that as well.
With this blonde possible-culprit in the Norway thing, we finally have a real life blonde villain amirite!?
"I regard anyone (with rare exceptions of course) making over 120K/yr or in possession of commensurate wealth as my enemy"
By your own definition a disproportionate number of your enemies are Jews.
If an ethnocentric, zionist Jew proposes flooding Anglo-French-Christian Canada with tens of millions of non-white immigrants, I'm going to call him out on his supreme hypocrisy. By all appearances Kaplan is a major hypocrite, proposing a "solution" (to a non-existent problem) that he would not dare suggest for Israel, and imposing it on a nation full of people he probably doesn't really regard as his own, or feel any particular loyalty to.
It's fun to pick on Bill Gates both because Microsoft makes crappy products and because of the silly way his foundation spends his money -- he'd literally be better off driving around in a convertible tossing wads of hundreds to passersby.
But this is stupid tax policy, and anti-corporatism only gets you so far. The United States has a very high corporate income tax rate, and a tax code that's riddled with loopholes and complexities.
That's what the Democrats, corporatist Republicans, and large incumbent corporations want, because it channels wealth away from the wealth-producing sector of the economy toward the parasite class -- lawyers, K Street lobbyists, etc. Incumbent large business are fine with it, because it creates barriers to entry and expansion.
And best of all, if somebody suggests lowering corporate tax rates (or just junking the corporate tax), it's easy to play the "you shill for evil corporations" card.
Steve is quite right that this is a High/Low teamup against the middle. But one of the intellectual weaknesses of the Stevosphere is that many within it can fall prey to the same sort of class warfare rhetoric as the folks on the left. Half Sigma is guilty of this too -- he's right on the basic wealth production/wealth transfer dichotomy, but he defines wealth production too narrowly. (He also tends to delete posts that politely take issue with him.)
The logical thing to do is to reduce or totally eliminate the corporate income tax, while taxing dividends at the normal rate. This would bring hundreds of billions -- perhaps trillions -- in capital back to the United States, and it would reduce the power and wealth of the wealth-transfer class.
By the way, RKU, the notion that rich people could just incorporate and deduct basic living expenses is -- how to put this delicately? -- retarded.
Today, as in right now, the top individual tax bracket is higher than the corporate rate, but people don't try this in large numbers. They don't do it because it's an obvious scam, and the IRS is very good at detecting it.
Really -- it's not an issue. A corporation formed for the purpose of avoiding personal taxes which deducts your food and underwear is currently unlawful, and it's seriously not a big deal.
Kaplan's-non-friend, why do you think that anybody making more than 120k a year is your enemy?
Of course it's true that the libertarians can take certain arguments too far, and many of them support wackier immigration policies that would result in libertarianism, or anything like it, being impossible.
But there are a ton of people who make more than 120k a year who are quite productive, and whose wealth-production adds to the overall well being of the world. Adam Smith didn't get everything wrong.
For example, engineers at Intel make more than 120k a year -- many of them at least -- and they provide quite a valuable service. Neurosurgeons. Even ace sales guys, depending on the sort of product they're selling.
The main battle isn't between rich and poor -- that's the battle the Obamas of the world want you to believe is being played out. The real battle is between the the wealth producing class and the parasite class. Members of the parasite class include people cashing in the EBT cards, and it includes well-heeled Goldman Sachs guys.
It's not how much you make; it's what you do to make it.
Hence, 84% of Microsoft's $50 billion trove of cash is officially overseas, and can't be repatriated without paying American taxes on it which means that American shareholders can't get it and thus can't pay taxes on their capital gains, either. This kind of tax policy would make sense to Rumplestiltskin, Hetty Green, Silas Marner, and Scrooge McDuck, but it doesn't seem to make much sense to me.
Capital Gains are taxed at 15%.
For the rich, "income" is taxed at 50%+ [where your state of residence is going to play a huge part in the final tally].
So it would be insane for the super-rich to engage in any economic transaction - such as the quarterly distribution of profits to shareholders - which could possibly be classified by an accountant [or by an IRS agent] as "income".
Instead, the super-rich have abandoned ordinary "income" [as measured in "Bernanke currency", aka US Dollars] altogether and are instead using their stock certificates as a competing form of currency - if they sell in stock certificates, then the transaction cost [the "friction"] is only 15%.
Whereas, by contrast, when the hoi-polloi wage-slave proles sell their services [their "labor"], in Bernanke currency [aka "wages"], then the friction is upwards of 50%.
In this scenario, with two parallel economies, operating under two parallel currencies, the super-rich don't ever need to actually access the "$50 billion trove of cash" sitting there in an off-shore account, gathering dust [if not earning interest] - they merely need to know that that "trove of cash" exists, that it will persist, and that it can be counted on to function as their abstract "Fort Knox", guaranteeing the underlying value of their "stock certificate" currency.
Once you realize that you have two competing currencies [the prole currency -vs- the elite currency], with two radically different transaction costs [frictions], forming two parallel [largely non-intersecting*] economies, then everything makes sense.
*Yes, Mr Smart Ass, you can get intersecting geodesics in hyberbolic geometries, thank you very much.
Of course having Jewish parents and a Jewish last name but none of that commonly assumed Jewish gold means that I'm a tad concerned about any sort of serious antisemitic movement afoot but my chief exasperation was with the cowardice and, what seemed to me to, downright ignorance of this bunch that they'd jump to hating on some particular minority when that minority is AT BEST a proxy for those who TRULY run the show of keeping us enslaved to a world they restructure to their own benefit and our detriment - the wealthy...
I regard anyone (with rare exceptions of course) making over 120K/yr or in possession of commensurate wealth as my enemy and, if you're in a similar boat you ought to as well.
When the Pharisee, which was a lawyer, asked of the Mashiach, "Which is the great commandment in the law?", the Mashiach replied, "Thou shalt love thy neighbor as thyself, BUT IF AND ONLY IF THY NEIGHBOR EARNETH LESS THAN 120K PER ANNUM."
We have started a food-based business. I would say that within the next year, we will have incorporated an office in Puerto Rico and sold the trademark to the office. I will hire a part-time worker to conduct some type of business from R&D to back office management. Whenever we sell a product unit in the USA, we will owe the Puerto Rican firm a royalty for use of the trademark name.
Reducing taxes via overseas shelters also makes sense if you want the best for your family. At some point, a good man must ask himself is it moral to pay taxes to a government that will abuse the money, all the while risking your financial future, or is it moral to put your family first in foremost in times of serious uncertainty and demographic doom?
"At the moment, as a member of the lower middle class economically I regard anyone (with rare exceptions of course) making over 120K/yr or in possession of commensurate wealth as my enemy and, if you're in a similar boat you ought to as well."
Ooo, I know! Let's start a revolution in Russia! That'll work out great, right?
So, 100 million people - not enough to end this kind of thinking? Huh. Derb is right - we are doomed.
Worst nightmare for Steve in Norway. I wonder if he will make a post.
So the takeaway here is that the US's uniquely draconian corporate taxes create an incentive for American corporations to bail on this country.
"For the same reason people should?"
Corporations are composed of people, who also have to pay taxes on whatever they earn! So, of course, corporate taxation is always at least double taxation.
I like your kind of thinking, though. It drives jobs out of America better than anything else, and, after all, who doesn't love globalization? Besides the white Americans who lose jobs because of it, but they hardly count.
Microsoft's HQ in Seattle is about 90 miles from Canada It wouldn't take much for it to become a Canadian company. Perhaps to far to comfortably drive every day but a couple of days a week for a lot of workers could be done instantly.
Bearing in mind that their competitors have been lobbying in Washington to clobber them with more anti-trust actions tax might not even be the prime determinant.
Instead of blowing his money on go nowhere causes like his "Small Learning Communities", Bill should just hire Americans and pay taxes. Trust me, the American people would appreciate it a lot more.
It's a sign of the ages that you can get out of taxes and screw over American programmers, but somehow you're considered a saint for burning cash on this sort of BS.
I'd say Bill's phlantropy is a deliberate smokescreen to cover up the devious financial trickery with which he makes his money.
Only problem: how do you keep corporations from simply locating in the countries that give them the best deal on tax breaks?
The same way every other country in the world does - via tariffs. In fact the US already does this with cars. You think all those foreign car makers have built factories in the US out of their desire to employ Americans, or out of their devotion to free trade? They do it because US law is structured so as to make a Honda built in Tennessee cheaper than one assembled in Japan.
Still nothing about the Oslo shootings?
Tum tum, tum tum, tum tum, tuddle duddle.
Tum tum, tum tum, tum tum, tuddle duddle.
it's pretty cool that the Norway terrorist/shooter-guy is a blonde, thus we have Steve Sailer's long waited "Great White Blonde Villain" :: http://www.nytimes.com/2011/07/24/world/europe/24oslo.html
how ironic: a portrait began to emerge of the main suspect in the case as a gun-loving Norwegian obsessed with what he saw as the threat of multiculturalism and Muslim immigration.
"I regard anyone making over 120K/yr or in possession of commensurate wealth as my enemy"
That's why any tax should be abolished. Corporate, and individual.
States are just too big to instill human solidarity.
. "Only problem: how do you keep corporations from simply locating in the countries that give them the best deal on tax breaks?"
Let 'em go. Only the deal is, if you leave so you get to pay no tax, you can't come back in to sell your wares.
Apparently pattern recognition is not only racist, it is anti-Semitic as well! (A twofer, folks.)
Corporations are composed of people
Corporations are people, legally. That was the starting new legal development which gave rise to the modern age: the granting of "personhood" to legal fictions.
So, of course, corporate taxation is always at least double taxation.
And how is that different from most other sorts of taxation? When I buy something with my already taxed money and pay sales tax, I'm being taxed again! When I earn money (and pay income tax) and then get taxed on the interest that money earns in the bank, I'm being taxed twice. Why is this fine for the riff-raff but unacceptable for the rich?
Steve is quite right that this is a High/Low teamup against the middle. But one of the intellectual weaknesses of the Stevosphere is that many within it can fall prey to the same sort of class warfare rhetoric as the folks on the left.
Wait a minute - you agree that our politico-economic system pits the middle-class against the rich and poor, but you then go on to claim that it is a "weakness" and "class-warfare" to acknowledge that fact? You're incoherent.
Anon, the details are still emerging. You're not going to like what I have to say. Folks like Fjordman and Jared Taylor and Mencius Moldbug and Whiskey might be a bit more tongue-tied.
"Still nothing about the Oslo shootings?"
Steve only comments on the news when he has something original to add. What do you expect him to say here? That that Breivik guy is an evil nutcase? Seems self-evident. That every news story about him includes the words "blond" and "blue-eyed", while stories about flash mobbers only identified them as "youths"? Everyone's noticed that already, that wouldn't be original. What else is there to say?
Back to the Microsoft bashing, this company is lobbying to have our patent laws changed to make it easier for Microsoft to prevent what they did to IBM from happening to them.
What do you expect him to say here? That that Breivik guy is an evil nutcase? Seems self-evident. That every news story about him includes the words "blond" and "blue-eyed"
Yeah, the nagger seemed giddy with joy about Breivik's hair and eye color also.
"What else is there to say?"
Steve has mentioned several times how many Norwegians read this blog. Maybe they could add something worthwhile even if Steve can't.
There is a lot of envy here. no wonder politicians get so much mialage and get so much power and money tapping it.
The capuital gains tax rate was equal to the earned income rate at tines. What hapened was capital investment became frozen. If you were invested in the NY Times and you decided to cash in and invest in Google which seemed more promising, you first had to take an income tax hit on realization of the gain in your Times stock before reinvesting. With inflation you might loose half of your capital just by selling the Times and buying Google. If owning the Times was 51% as profitable as owning Google you would be better off staying in the Times. Less capital for new growing companies, more capital locked in because of tax loss on any transaction.
I'm the anon at the top. I don't expect Sailer to say anything original at this point perhaps, but just comment to start a discussion. The most interesting stuff I've seen so far is this thread at zerohedge:
http://www.zerohedge.com/article/oslo-shooter-profiled-anders-behring-breivik-32-nationalist-hated-islam
"Tyler"'s commentary is idiotic, but there's interesting material from the various users.
hyberbolic geometries
Yikes - meant to say ELLIPTIC geometries.
Sorry about that.
"Worst nightmare for Steve in Norway. I wonder if he will make a post."
Arch neo-con runs amok. Bad Steve?
Gilbert P.
The plain fact is in the end corporations never pay taxes. People pay taxes, and almost always it's the middle class who pick up the tab in the form of increased costs for goods and services.
Put another way, to survive businesses --all businesses, big and small-- seek out ways to minimize costs, specifically including taxes. Raising taxes by closing loopholes increases costs and exerts pressure to increase prices.
Anon:
The lesson would appear to be that one lone crazy with a gun and some fertilizer can kill a hell of a lot of people. It's worth noting that the mass shooting side of the attack was apparently much deadlier than the bomb part. (I think they're still trying to figure out if he had any help.). This is the main lesson of all terrorism--it's not so hard to kill a bunch of people if you're not too worried about being punished for it.
I don't think it's terribly informative to try to decide whose ideological team gets the blame. That's an exercise that's always done with a desired conclusion in mind.
The plain fact is in the end corporations never pay taxes. People pay taxes
True, but we should be interested in which people pay taxes. When corporations pay taxes, one group of people pay taxes. If we abolish corporate taxes, a different group of people will pay them. It all comes down to who we want to pay them.
I don't expect Sailer to say anything original at this point perhaps, but just comment to start a discussion.
if you're so frantic to "discuss" it (by which I suspect you mean "tell us your priceless thoughts on it") then go to a place where it's being discussed and discuss it there.
Put another way, to survive businesses --all businesses, big and small-- seek out ways to minimize costs, specifically including taxes.
The problem is that some of them, and only some of them, succeed. if taxes were the same for all companies and people there would be no problem. But from a business standpoint the objective is not tax fairness or tax equality, the objective is to get a competitive advantage on your rivals. As a business you want low taxes on yourself and high taxes on everyone else. That's what corporations lobby the government for.
Generally, modern public corporations are thought to have a fiduciary duty to increase shareholder value. Among other things, a responsible Board of Directors is supposed to make sure management pursues this.
In seeking to maximize retained earnings, MSFT is also increasing shareholder value.
If I was a MSFT shareholder, I would appreciate it. But I'm not.
As a taxpayer with somewhat libertarian leanings, I have no problem with what they're doing, which is within the letter of the law (if perhaps an abuse of it, in spirit).
Forty-eight hours without something new to read on iSteve. Yikes! Steve, I really hope you're okay. Now I'm having all these horrible involuntary fantasies about what might have happened, like I do when one of the children misses multiple days of school or my boyfriend's 20 minutes late.
Once you realize that you have two competing currencies [the prole currency -vs- the elite currency], with two radically different transaction costs [frictions], forming two parallel [largely non-intersecting*] economies, then everything makes sense.
Maybe this would make more sense to the iSteve-o-sphere if I were to phrase it thusly: With disparate [tax-code-induced] frictions of 50% -vs- 15%, what we have is a shallow economy for the proles, and a deep economy for the elites.
We would also like to get into this manufacturing of DVDs thing
p.s.
Are you going to comment on Winehouse or not?
Good for Microsoft.
Instead of dropping that money into the American system, where it will be wasted on idealistic and dysfunctional well-intentioned government programs, they can invest it in developing new technologies.
Much of our modern computer experience is nicer because of Microsoft. If we left it up to the hipsters at Apple, we'd still be using standardized 25mhz hardware with an operating system you could crash by holding down the mouse button too long.
"Good for Microsoft."
"Instead of dropping that money into the American system, where it will be wasted on idealistic and dysfunctional well-intentioned government programs, they can invest it in developing new technologies."
Umm... you're talking about Microsoft?
"Much of our modern computer experience is nicer because of Microsoft."
Microsoft? Really? Can you offer any examples?
"If we left it up to the hipsters at Apple, we'd still be using standardized 25mhz hardware"
You think that Microsoft is driving hardware development? Microsoft?
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