10% Tax On Custom Software, $100M Tax Cut For Microsoft 305
reifman writes "Last week, the Washington State House of Representatives passed a bill which would impose a 10% tax on custom software while all but eliminating a $100 million yearly tax obligation that some say Microsoft is wrongfully avoiding by routing large chunks of business through an office in Nevada. 'I believe we've got an issue of justice and fairness here,' said Rep. Maralyn Chase. 'Most of the custom software purveyors are small businesses. It's a question for me of how we fairly distribute the tax burden.' 'It means that a 5 person team of entrepreneurs building a cool custom software suite, or a group of system integrators, would face a 10% tax on their services while keeping the exact same project in-house would not be taxed,' wrote Rep. Reuven Carlyle. 'It would be a massive blow to the entrepreneurial community in our state.' The bill won't become law until the House and Senate work out how best to raise another $300 million in taxes. A sales tax increase on consumers is also being considered."
Bad bill... (Score:5, Interesting)
This is clearly is bad for the individual geek who makes their living selling simple custom programs that do only what the user wants/needs and nothing that they don't, unlike Microsoft omnibus packages. It's a case of government by large corporation over the individual if this passes.
Re:Bad bill... (Score:5, Insightful)
Too late, it's already done. Now as for the reason why it isn't law, law yet is a puzzling one: they apparently need to find another 300 million in tax revenue and have completely inored the most obvious: closing the MS tax dodge instead of giving them a free pass that this bill just did. Or they could just I don't know cut all the extraneous crap that they shouldn't be doing to begin with but I suppose that actually solving the problem would piss off everyone dependent on the bloat.
Re:Bad bill... (Score:5, Informative)
Yeah, it's all done, except for those pesky State Senate vote and Governor sign/veto issues.
It sounds good until you realize that MS have WA by the balls. Piss them off and they move employees out of state. Boeing did it... MS could too. Sure, there's no state income tax, but that's a lot of sales tax WA won't collect.
Have you seen the WA budget over the past two years? They've made DRASTIC cuts in spending. The question is if they can find another $300 MM to cut, or if they're better off find additional $300 MM in revenue. In a poor economic situation, cutting spending is a hell of a anti-stimulus for economic activity... the better course of action is to wait for economic recovery to make additional budget cuts (whether or not that would actually happen is a different story).
Re:Bad bill... (Score:5, Insightful)
Oddly enough, if they stopped using Microsoft products they could recoup a large amount of that money anyways. I have reviewed the IT expenditures of several state agencies and they are blowing money like its no tomorrow, but they have no clue how to get efficiencies because they are so star struck by the crap MS has been dishing out to them for years.
Re:Bad bill... (Score:5, Interesting)
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Washington likely allow all large employers like Microsoft all kinds of exceptions. I'm sure actuaries and accountants working for the State have already figured out (using MS software of course) how profitable they are, on tax revenue generated by their employees, despite the 300 million cut.
A 2.6 billion state deficit is nothing.
-- I wonder if MS has special hidden algorithms in their software: if state=Washington and query="how much state tax Microsoft should pay", then answer=0. --
Re:Bad bill... (Score:5, Insightful)
-- I wonder if MS has special hidden algorithms in their software: if state=Washington and query="how much state tax Microsoft should pay", then answer=0. --
You see, that's the problem with closed source software; we'll never know.
Re:Bad bill... (Score:4, Insightful)
Well it's obvious you went to the Keynesien school of economics.
Every dollar that goverment spends is one less dollar that the individual spends. In fact, the return on government spending is LESS than individual spending (I'm trying to dig up those numbers now).
You cannot spend your way out of a recession. That money is best left in the hands of the individuals to spend as they will. Will some people resort to the hoarder mentality? Yep but it's not an absolute.
I don't know the situation in WA but it's not like they're not in the same boat as every other state in the country - reduced revenues and all.
There really needs to be, in all states, a line by line audit of where the states are spending money and where they can cut that spending or eliminate it entirely.
Reason did an amazing series with Drew Carey about "saving Cleveland". It had some awesome ideas that have been shown to be successful in other parts of the country. They admit that what works one place may not work in another but honestly when you're faced with a $300m shortfall, maybe you should try something new?
http://reason.com/blog/2010/02/25/save-the-week-reason-saves-cle [reason.com]
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wow, did you fail macroeconomics?
You do realize individual states have no control over monetary policy right? So that means the only tools it has are based in fiscal policy. And your asking the state to reduce the strength of it's fiscal powers.
That be like saying oh my house is on fire. No! don't pour water on it, it will go out faster if you just let it burn.
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In fact, the return on government spending is LESS than individual spending (I'm trying to dig up those numbers now).
It's an incredibly difficult number to calculate, because of the lack of good experiments. You only have a recession every decade more or less, so it's hard to come up with good generalization. Maybe in a century or two we'll have it down....
But for now, I recently read one economist who managed to put the multiplier at around 0.6. He was only able to do this using data from wartime, though, which is probably not the best way to spend government money (once a bomb explodes, it's of no more use to the e
Re:Bad bill... (Score:4, Interesting)
That's a bold assertion. What happens when they spend all the money on consumer goods produced in Asia?
What happens if, instead, the money was spent on infrastructure that directly benefits people in the state?
On what basis do you make that assertion? Just regurgitating Austrian or Chicago precepts -- or do you really have an understanding of economics? Even the Austrians recognize that public spending in times of recession stimulates the private economy and can hasten the end of a recessionary period... the value judgment on whether this is the *optimal* course of action in the long run is a different matter.
Please do share them when you've found them. I hope they are broken down by sector. Do you have them by state, or just federal? Does the federal breakdown only include domestic spending? Are the societal benefits of the judiciary spending included?
If it were that easy to determine exactly how effective public spending is, we wouldn't be in this quagmire. I do hope you produce some data that is useful.
Re:Bad bill... (Score:4, Interesting)
Sorry for not posting sooner. Sick child in the house.
That's a bold assertion. What happens when they spend all the money on consumer goods produced in Asia?
Irrelevant. Those goods may be produced in Asia but they are sold by people with jobs here - advertisers, retail staff and so forth. I'm not up for getting into a massive discussion about it but take a look at http://cafehayek.com/myths-and-fallacies [cafehayek.com] and some of the articles there. You should have more respect for his opinion than mine. To answer the second question, I'm not an economist but he is.
I find it interesting that you mention "Even the Austrians..." because I was just reading about that today. I really need to use some sort of web clipping addon.
Anyway, I would have to say I align myself pretty strongly with Hayek but my personal philosophy is whatever provides the greatest amount of individual economic freedom.
And I'm still looking for a good "unbiased" source of information on government spending. I hesitate to link to a third-party news source (especially News Busters) quoting Milton Friedman from a book, however this link has a subsection that is of interest:
http://newsbusters.org/node/27813/print [newsbusters.org]
My google-fu isn't strong enough at this late hour but I also found an interesting statement:
"When the economy is doing fine, he estimates, $1 of government spending yields 40 cents in extra production and related jobs." - http://www.dailyfinance.com/story/does-the-return-on-government-spending-triple-in-a-depression/19200069/ [dailyfinance.com]
In a such a short article, there's not much meat but I'm interested in seeing any corroboration and/or rebutal to the theories at the end.
Taken in light of the Friedman statements and the basic reality of where government gets its money would seem to suggest that there IS a very small window where government COULD stimulate the economy.
However that window is smaller, IMHO, than trying to hit a two-meter thermal exhaust port. On one side (spending too early) it's wasteful and takes money from the private sector. On the other side, you end up with massive inflation.
I think the safer course of action with those odds is to leave the money with the people who know how to spend it best in their situation, the people who earned it.
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Would never happen. Microsoft is dependent on Washington state as they are on Microsoft.
Re:Bad bill... (Score:5, Interesting)
In a poor economic situation, cutting spending is a hell of a anti-stimulus for economic activity...
This is an incredibly misleading over-generalization, one which I keep seeing smart people make. If you think about it, it should be obvious that whether 'cutting spending' is good for the economy or bad is extremely dependent on what the money was being spent on, and where the money was coming from.
On the spending side, it is an extremely bad idea to cut spending on roads if some of the roads become unusable as a result (obviously). It is a rather good idea to cut spending if most of the money ends up directly in another country. This should also be obvious.
On the income side, when you spend money, it has to come from somewhere. If the government happens to have a pile of cash saved up, a recession is definitely a good time to spend it. If the government has to increase taxes to get the money, it could have a net negative effect on the economy (this also depends on where the money goes: if you raise taxes to build a new road, the resultant positives could outweigh this negative). If the government has to borrow money, it could have a negative effect, because it borrowed money from people who would have otherwise spent the money on potentially more valuable projects. If the government has to get money by printing more, well, you might as well just hit your economy with a sledgehammer.
See how it is? It's not enough to say spending is good. You have to look at the details. Geeks should be good at that.
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Re:Bad bill... (Score:5, Informative)
Because a lot of the money flowing in the economy in the first place doesn't flow. It is hoarded, it leaves the local economy when used to purchase non-local goods, etc.
Never mind the fact that *some* public spending has a *positive* impact on the economy greater than the amount spent (public mental health services, for example).
And never mind that while the government is the "middleman" in the spending, they are not extracting profit. This is not like a creator-wholesaler-distributor transaction where the wholesaler takes some cash and runs off with it as profit. The tax money is returned to the economy, via employee wages, etc. The question is the return on that spending.
But, like, OMG, whatever...
Re:Bad bill... (Score:4, Insightful)
What you call "hoarding", I call "saving" and the general lack of savings in America is a Bad Thing (tm).
Re:Bad bill... (Score:5, Insightful)
I'm willing to bet the law won't be written by anyone who knows anything about "Custom Software".
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There's a simple workaround to that though. Sell it to your client, royalty free for your standard fee, then tell then you will offer it to the public on a simple website with a shopping cart for $5,000,000 per license and split the income with them.
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And this will be even more true next year as many in the custom software field leave the state and/or stop doing business there.
A different tax proposal (Score:4, Insightful)
I propose a 20% tax on people who pass stupid laws!
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Does that include the 15% guilt tax on the people who vote for them?
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Thats a good idea! And while they waste time writing and debating it in special session, the costs to get that bill moved through will cause the net value to be nothing.
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Re:A different tax proposal (Score:4, Insightful)
Hey I know, Washington!
Maybe you could stop running giant ad campaigns (bus, billboard, web...) telling me to get my swine flu shot. How much did that ad campaign cost? And while we're at it, why don't you stop making new lotto games and spending tons of money advertising them as well? And how much do we spend putting giant "click it or ticket" billboards along every highway? I think it's safe to assume people know that there's a seatbelt law at this point.
Christ.
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Modest? It's already high enough. Changing the property tax to a "modest" one would lower it.
FOSS Contributions (Score:4, Interesting)
At first I thought ... "that doesn't affect me, I run Linux" ...
But what about paying a developer to work on a FOSS application? Would that be taxed? It is custom software, after all.
Re:FOSS Contributions (Score:5, Interesting)
At first I thought ... "that doesn't affect me..."
This is a very common attitude that is degrading our lives in all areas in my opinion. To me, it's like playing chess and looking just one move ahead.
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You (and others) have missed the point slightly.
FOSS is (generally, although not universally) free as in beer. Therefore, there is no sales tax. If someone sells you a CD with Linux on it, the sale would still be taxed under normal laws.
However, developing this software is not free. Many times, a company will want a customized feature added to a product that they already use, but don't want to develop in-house. They then pay a chunk of money to the project to have this feature developed ahead of other f
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Re:FOSS Contributions (Score:5, Interesting)
This is nothing more than a prime example of lobbyists in action. How else could you explain that the first "community" to do this contains one of the largest "non-custom" computer engineering firms in the country? I wonder what the state congressmen (or whatever they are called up there) got in return for this sweet deal... Money? Drugs? Sex? Free Computers?
Re:FOSS Contributions (Score:5, Interesting)
I was looking over the proposed law [wa.gov] and found some interesting information on this.
First, I'm not a lawyer or politician. Be ye forewarned.
Page 87 makes it seem that this isn't a new tax, but a removal of an exemption. From the document:
(7)(a) The term also includes the sale of or charge made for custom software and the customization of prewritten computer software to a consumer, regardless of the method of delivery to the consumer. (b) The term also includes the charge made to consumers for the right to access and use custom software and customized prewritten computer software, where possession of the software is maintained by the seller or a third party.
In other words, the following are taxable:
1) The sale of "custom software"
2) The amount paid to customize software that's already written
3) Licensing fees to access custom software
Back to the original question in this thread, it seems that FOSS could fall under 2) in my list -- developers are often paid to add specific features (thereby customizing the software) by individual or companies. As nothing is charged for the sale and licensing of FOSS (generally), 1 and 3 woudn't apply.
I will say, however, that "custom software" is not defined in said document.
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repairs (Score:3, Insightful)
Is repairing infected OS and apps using third party tools at the computer fixit shop a matter of customization? Scenario: The PC owner comes in with the borked machine, it has a state of software level. The tech uses his antivirus and search and destroy stuff and skillz, and customizes the software on the customer's drive, to get it back to a functional level. Perhaps they also add a couple new features, like FF and OO.
With that said, the malware/botnet authors and maintainers could be charged with tax evas
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Fine. I won't write software. I will write books. In a nice OCRable font. About a nice piece of fiction of how to translate the narrative into executable code.
Re:FOSS Contributions (Score:4, Funny)
I feel so much better. They already had a law to force me to bend over with or without lube applied. But they deferred it. So they only removed the deferral they didn't make a *new* decision to rape me. What a relief!
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I wonder what the state congressmen (or whatever they are called up there) got in return for this sweet deal... Money? Drugs? Sex? Free Computers?
They were promised unlimited free porn for life, and eagerly agreed. Then MS sent them a download link for Internet Explorer.
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It's a sales tax, sizzle chest.
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It's not unheard of for sales tax to be applied to the "fair market value" rather than the actual sale price of an item. If I buy a car from my parents for $0, I still get to pay sales tax on it when I go to transfer the title... the RMV worker will just look it up in KBB and tell me to cough it up.
Never underestimate the lengths the state will go to collecting taxes that shouldn't exist in the first place.
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Remind not to move to that state. In PA there would be no tax on that.
Microsoft's tax cut and a sales tax (Score:2, Insightful)
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For the same reason governments have a hard time dealing with offshoring - companies will leave if you make things too uncomfortable. Microsoft provides far more benefit to the state of Washington and its people than Washington provides to Microsoft. In the end this is just a recognition of that fact.
You can bleed companies (like GM) with large fixed facilities, but it's pretty easy to move software development. If not to Oregon or California, then to India or the Philippines.
Re:Microsoft's tax cut and a sales tax (Score:4, Interesting)
sales taxes are not just not-progressive - they're regressive.
Rich and poor people need to buy a lot of the same basic things that are taxed - that tax eats up a larger percent of a poor persons income. that is the definition of a regressive tax.
Re:Microsoft's tax cut and a sales tax (Score:5, Informative)
You don't have to assume any such thing. If you want, you can actually check the data. It's available. The truth of the matter is that poor people spend a higher proportion of their income on taxable goods than wealthy people do. Keep in mind that "necessities" are exempt from sales tax in all, or almost all, states... this includes food.
Keep in mind that it's probalbe that you paid more in tax than your poor friends did... but as a percentage of your income? Not as likely... I think you're unclear on what a regressive tax is. It means that as a proportion of income, people with lower income pay more than those with higher income. So if you make $100,000 a year and pay out $1000 in sales tax (1 %), but they make $25,000 a year and pay out $300 (1.2%) in sales tax, it's an example of the regressive nature of sales tax. The math gets even worse for the poor when you compare disposable income, rather than total income.
Yes, you just gave an example of how a progressive tax schedule could be implemented. And while I'm not the person you responded to, I do believe that a progressive tax is ideal.
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A Sales Tax is pretty much regressive by definition.
Well as long as the Elasticity of demand is less then 1. And i don't think rich people pay more for software then poor people
WTF? (Score:3, Insightful)
This is like taxing grocers and restaurants while giving incentives to out-of-state food processors and big-box ultramarkets to bring in more processed pseudo-food.
What, exactly, is the message the legislators are trying to send here? "Tax local, buy global?"
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No, they are not saying that at all. (Score:2)
What they are saying is: "We know who pays our re-election campaigns to get the voter with an attention span of a 3 seconds and who will vote for us anyway as long as we shout TAX-CUTS right before the election."
or they could you know...spend less money? (Score:2, Insightful)
first cut should always be to government offices furniture budgets, then look at the "perks" elected officials get and cut those
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They should force Congress on a diet of Ramen Noodles and Mac 'n Cheese. They should put ever damn one of those jackasses in cubibcles instead of offices, put them up in two to three members per room dorm type housing, install a timeclock in the senate and house chambers where they have to clock in with their finger prints in order to get paid and only be paid per hour they are actually in session.
This should save A lot of money.
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But instead, the special session in WA right now is costing us extra. Nice huh?
Tax custom software ? logic ? (Score:3, Insightful)
arent you already taxing the income that is generated as a result of that software ? and applying any kind of sales tax to the software, if there is a sales tax in the state ?
Re:Tax custom software ? logic ? (Score:5, Informative)
Sales tax doesn't usually apply to custom software, where 'custom software' means you can't just buy it on a shelf or download it. My company sells custom software that runs youth sports leagues.
We pay income tax on all our revenue, of course, but we don't have to collect sales tax so long as it's a 'service' -- meaning no 'click here to download our software.' So custom software is not currently taxed in most states.
Washington state also doesn't have an income tax at all.
Depending on your current state and existing tax burden, I could see paying a fair tax for something like this, but not ten percent. Custom software is already pretty expensive (possibly one of the reasons it's not currently taxed) and because it doesn't have fixed price, it's tough to track for tax purposes -- I could say 'well, our software costs a hundred bucks, but my consulting fees to set it up and maintain it for you are $10,000 a year' since that's a professional fee/service. Sort of how attorneys work - you're paying for their expertise, not really for a 'product.'
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10% is about the sales tax around here in WA- maybe a little less in some high tax LIDS. I don't agree with targetting specific industries like this, but if they made it an across the board 10% tax on sales of non-sales tax generating services I'd be more ok with it. This state badly needs an income tax though. Just income taxing the MS leadership would significantly close our budget gap.
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It's extremely difficult to tax non-sale services, for the reasons I mentioned. Very few states even try. Reason being that it's not a 'sale' if you have a professional perform a service for you, which is usually what custom software is.
What you're talking about is closer to a VAT.
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There is no such thing as a "fair tax". The actual FairTax is about the closest I've seen in a while.
People need to put the screws to government. Citizens of a state need to decide exactly what public services they want the government to provide. States need to stop doing stupid shit like building arenas and halls of fame and golf courses and bowing to the the "we'll leave if you don't subsidize our sports franchise" bullshit.
Yes, state revenues will contract but so will the needs of the state. No personal
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Well, a bit off-topic, but yes, I agree, which is why my business is relocating from NYC, where we pay:
- one of the highest state + city income tax rates in the nation
- 4% unincorporated business tax
- Metropolitan Commuter transportation mobility tax (something they invented this year to fund the MTA)
To Austin, TX, where we'll pay:
- No state income tax (corporate or personal)
- No UBT
- No spend-happy gov't
- 80% national avg cost of living rather than NYC (don't even want to know what percentage that is)
I'm n
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I'm glad Texas got it right so far. Most people forget the second half of the equation in cutting/eliminating taxes which is to restrict government spending. I'm interested to see, long term, how this fairs for Texas and Austin particularly. So far it seems to be going swimmingly. Right now the economic freedom there is amazing.
lol wut (Score:2)
I have no idea what the Legislature means by "custom software" (and didn't see a definition in the article) but I'm guessing that it would be software written for a specific niche or client - in which case, Microsoft would really be the *least* likely to fall under that definition. Word, Excel, etc. are hardly "custom applications."
And if they are, well, that means just about all the software ever written would be "custom software."
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Isn't all software custom once you get into the configuration?
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Uhmm... (Score:2)
Or do they mean software that is pumped out by the thousands, like MS Windows.
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My guess is that "custom software" is software for which sales tax is not being paid. That way you always have to pay some additional tax above that for the income you earn when you sell software.
How about some honesty in taxation? (Score:3, Insightful)
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Move (Score:2, Interesting)
Fortunately my little corporation isn't in Washington. I know first hand that there are many states more conducive to small business. Unless there is some specific reason for remaining there, it isn't be too hard to move. 10% is no small increase, so it's definitely worth looking into a change of locale.
I don't suppose anyone in the WA government considered reducing expenditures enough to make up the difference. Too radical a concept I guess.
Re:Move (Score:4, Informative)
Fortunately my little corporation isn't in Washington. I know first hand that there are many states more conducive to small business.
Fun facts about Wshington state:
Estimated at 8.9% of income, Washington's state/local tax burden percentage ranks 35th highest nationally, below the national average of 9.7%. Washington taxpayers pay $4,334 per capita in state and local taxes.
Washington ranks 9th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states ranked as follows: Idaho (18th), Oregon (14th) and California (48th).
Washington levies no state personal income taxes, joining Alaska, Florida, Nevada, South Dakota, Texas and Wyoming as the only other states not to do so.
Washington's corporate tax structure contains no corporate income tax. Nevada, Texas and Wyoming are the only other states that do not levy corporate income taxes. However, Washington levies the nation's oldest gross receipts tax, the Business and Occupations (B&O) Tax, first instituted in 1933. Washington, Texas, Ohio, Michigan and Delaware are the only states to levy economy-wide gross receipts taxes.
Washington levies a 6.5% general sales or use tax on consumers, slightly above the national median of 6%. In 2006, state and local governments combined collected $1,868 per capita in general sales taxes, which ranks the highest in the nation. Washington's gasoline tax stands at 37.5 cents per gallon, which ranks 3rd highest nationally. Washington's cigarette tax stands at $2.025 per pack of twenty and ranks 8th highest nationally. The sales tax was adopted in 1933, the gasoline tax in 1921 and the cigarette tax in 1935.
Washington is one of the 37 states that collect property taxes at both the state and local levels. As in most states, local governments collect the majority of property taxes. Washington's localities collected $835.25 per capita in property taxes in fiscal year 2006, which is the latest year the Census Bureau published state-by-state property tax collections. At the state level, Washington collects more property taxes than most states do. In FY 2006, Washington collected $257.73 per capita, bringing its combined state/local property taxes to $1,092.98 per capita, which ranks 25th highest nationally.
Washington taxpayers receive less federal funding per dollar of federal taxes paid than the average state. Per dollar of Federal tax collected in 2005, Washington citizens received approximately $0.88 in the way of federal spending. This ranks the state 38th highest nationally and represents a decline from 1995, when Washington received $0.97 per dollar of taxes in federal spending (ranked 31st nationally). Neighboring states and the federal spending received per dollar of federal taxes collected were: Idaho ($1.21) and Oregon ($0.93). The Facts on Washington's Tax Climate [taxfoundation.org]
Soak the Rich Big Businesses, Screw the Little Guy (Score:2, Insightful)
Any regulation that is invariably put in place to "Soak the Rich Big Businesses" will inevitably turn around and screw the medium to small business. Why is this?
Example:
Microsoft is big enough to hire as many tax lawyers and other attorneys as needed to deal with any sort of regulation that the federal government tries to impose ont hem.
Meanwhile Bob T. McProgrammer is writing a piece of custom software and he gets screwed because he had no idea he had to fill out forms 1342-GOV and 1040-SCREW-U Schedule
This just in... (Score:2)
I need an explanation.... (Score:2)
WTF is 'Custom Software'??? What are the definitive characteristics of Custom Software and non-Custom Software?
This is totally bogus, and a blatant demonstration of the ability of business to pervert political processes.
Software is software. I don't know why or how they even feel validated in taxing software at all, aside from a sales tax, let alone specifically discriminating certain software and alleviating tax burden on other software.
It looks like some people need a talking to.
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Custom software is the software that isn't being taxed now, as opposed to all the software that is currently taxed in Washington State. It is the status quo that requires a definition of "custom software." If this new bill becomes law, it won't matter whether software is custom, because all software will be subject to the tax. This new bill ends "discriminating certain software and alleviating tax burden on other software."
That doesn't necessarily make it a good change. But at least complain about the right
The sponsor of the bill (Score:4, Informative)
Is Senator Margarita Prentice. According to her bio, she is a member of:
"American Civil Liberties Union; Amnesty International; Democratic National Committee; First Vice President, Washington State Nurses Association, 1968-1972; Labor Officer, Washington State Nurses Association, 1974-1978; Sierra Club; Renton Historical Society; Audubon Society; Humane Society of United States."
http://www.senatedemocrats.wa.gov/senators/Prentice/biography.htm [wa.gov]
Re:The sponsor of the bill (Score:4, Insightful)
Aren't these all the people who are supposed to be standing up for rights, minorities, and the little guy? this is deplorable!
Right hemisphere, wrong quadrant. These are largely in the "you should give all your money to the State _and_ be free to have sex with a tree" camp.
Why not tax what costs the most in infrastructure? (Score:3, Insightful)
Custom software has to be one of the cleanest, safest, crime-free, low impact industries in the state. You have industries with MASSIVE infrastructure burdens like: Trucking, Logging, Mining/Cement generation, farming. Industries that require inspectors or police protection or heavy truck support, water projects, and electrical projects. These industries cost the state big money to support. Or look for industries that create expensive side-effects like pollution.
Just try to zero the bubble: the industries that take the most out of the state in terms of infrastructure costs and natural resources should have to pay taxes so that their cost to the state becomes zero. But the low-impact industries, ones that cost the state little or no money to support, should not have to have special taxes directed at them.
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You might not realize this but everything you've listed is already taxed into the ground. Why do you think commodity prices keep going up, hint, it's not just because of fuel.
Re:Andrew would be upset, again. (Score:5, Insightful)
Andrew Stack would be upset at having to pay any taxes. He was also a loony. The selective 10% on custom software is a supremely stupid thing, but invoking the name of an anti-government crackpot isn't helpful.
Re:Andrew would be upset, again. (Score:5, Interesting)
Just so you know, the state of Michigan tried a 3% tax on gross receipts on physicians... It got shot down in the state senate after the house passed it. They're trying it again in by hiding it in a new budget bill.
I bring this up because it's in the same idea of trying to find new tax sources, that affect a small population to make it not unpopular... And it helps if that particular group is perceived to be "well off." It's poor policy to make one profession bear the burden of the masses (IMHO). It's a great way to try to drive business out of an area. It's also a great way to pass the burden onto the consumer without and claim that taxes have been raised.
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This is why tax policy should be re-evaluated. We should not be taxing things we want people to do, we should be taxing the things we don't want people doing.
If we, as a society, value something, taxing it is the most assured way of destroying it. Let us legalize drugs, prostitution and every other "victimless crime" we have now, and tax it.
I have never understood the idea of taxing things people need like income.
Re:Andrew would be upset, again. (Score:4, Interesting)
Because that way you can pay for other things people need, like roads, hospital, military protection, police, fire, etc. There honestly isn't really anything taxable other than income that can cover these things.
Re:Andrew would be upset, again. (Score:4, Insightful)
Yes.
Road Taxes paid by Taxes on Fuel. Not enough roads, raise taxes on fuel, doubles to reduce cars on the roads, and pays for increased roads. Smog increases, then raise taxes on smog producing fuel.
Military can be paid for with taxes on corporations (state created entities), and cross boarder transaction taxes.
Fire and Police are local, and should be paid for by local taxes like property taxes, since they are used to protect property.
The problem as I see it today, we have no balance in taxing and spending. We have big tax/spend (D) and little tax/big spend (R). Nobody is really offering the REAL solution which is to spend what we tax and tax what we spend. Letting the people vote with their wallets on what is a priority with them.
Of course that doesn't sit well with the busybodies and dogodders who love to spend other peoples money and stick their noses in everyone else's business. Yes, I'm talking about both (D) and (R).
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Because that way you can pay for other things people need, like roads, hospital, military protection, police, fire, etc. There honestly isn't really anything taxable other than income that can cover these things.
Either you're joking, or you have a serious lack of imagination. Hospitals, military protection, police, fire are all localized services and could easily be included in property tax (hence you live in an area with lots of hospitals or a higher need for said services then you pay more than if you live in podunk town with 1 fire engine and one police officer). Roads could easily be incorporated into your driver's license or license plate fee.
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If we, as a society, value something, taxing it is the most assured way of destroying it.
Except that taxes don't deter people like that.
The cost of cigarettes is dominated by taxes, for example, and yet people still smoke. The addiction makes then overcome the higher prices.
Nor does it work with income taxes: just because making money is taxed doesn't mean people don't want to work and have jobs.
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We should not be taxing things we want people to do, we should be taxing the things we don't want people doing.
If you tax things you want people to do then you act contrary to your own interests. On the other hand, if you seek revenue through taxes on things you don't want people doing then you become dependent on the "unwanted" behavior, which curtails any incentive to actually persuade them to stop—which is also contrary to your own interests.
The correct approach is to give up the reliance on coercion. Anything worth doing can be done voluntarily.
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I thought it was him trying to not pay any taxes that led Andrew Stack to target people who have no influence on his taxes.
I agree that there are some extremely messed up taxes for some aspects of software development, but that is not why he flew his plane into an IRS office.
He got sold on the idea that he didn't have to pay ANY taxes, ANY, Zip, zero, zilch, none.
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Don't defend what that man did. There are more effective ways of protesting this nonsense without resorting to property damage and death. After all, do you really think that anyone with the legislative power to change things for the better thought to themselves "ya know, he's got a point, maybe we should change the tax laws." It'll be remembered as an act of terrorism nothing more.
FYI - A nitpick/why Stack didn't kill more people (Score:2)
Minor correction: the IRS didn't really wind up with "...an airplane in their offices."
I haven't been in the building but I have received a report from one of the members of the disaster recovery team onsite. Per that report, Stack came within 10 feet of killing 20 to 50 people, perhaps many more.
His plane center-punched a main support column on the exterior of the building, taking it out and causing most of his plane and fuel to spew out at about 90 degrees from the impact. That's why there was such a wi
Re:Andrew would be upset, again. (Score:4, Informative)
My representative likes me to provide cites when I make pronouncements like that.
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Re:Andrew would be upset, again. (Score:4, Informative)
I guess people don't really like this topic (since the original post was modded down), but I think it's one that's going to gain more prominence in the next few years, along with public pensions, as they get more and more expensive. It should be clear to everyone by now that the government is either going to have to cut spending or increase taxes, most likely a combination of both. I see paying employees a sane wage as a reasonable step towards a more balanced budget, but if the rest of the voters disagree with me, that's ok. Regardless, we're going to have to do something as on our present trajectory we're headed towards disaster.
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False. Most unions base a state workers wage (plus benefits) at a percentage of the private sector equivalent. For example, most interns at Microsoft make more then a 3 or 4 year IT worker at a state job.
Perhaps your argument should be more like this: if there is a 20% reduction in jobs in the private sector, then a similar reduction in public services (positions) must follow.
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Obviously if the man said 2+2=4 he must automatically be wrong... The man was crazy but the idea that our government and tax law as a whole have also gone batshit isn't that crazy.
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For the same reason some of us were saying "Maybe we should find out why Al Quaeda attacked us on 9/11" as opposed to yelling about "They hate our freedoms" and "You just want to blame America". If you never get at the root cause of a problem, you'll never truly solve it.
Bin Laden had some valid reasons for hating the US that has nothing to do with our "way of life" and more with our farcical nation building policy. That doesn't mean he was right or that it was entirely our fault. However, unless we underst
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Lie. Corporations do not have the same rights as citizens. Also, the money is taxed anyway - at some point a person gets it. The money a person doesn't get goes into making jobs, doing research, expanding the corporation, etc...
Whining about "corporate taxes" is just something dumb hippies do.
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This is actually an attempt to make it more uniform, isn't it? Currently, if you write software and start selling it, you must collect sales tax. But if it's custom software, it's common to account for it as part of a service, not a sale of software, so sales tax isn't collected. This bill would essentially add sales tax to all software sales, including those that are done as custom-software deals rather than retail sales.