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Microsoft Education Government The Almighty Buck United States Politics

Protesters Blockade Microsoft's Seattle Headquarters Over Tax Breaks 246

reifman (786887) writes "A thousand unionized healthcare workers protested outside Microsoft's Seattle offices over its Nevada tax dodge on Friday. Microsoft shareholders have pocketed more than $5.34 billion in tax savings as Washington State social services and schools have taken huge cuts. In a hearing Wednesday, the Supreme Court suggested it may hold the Legislature in contempt and order it to repeal all tax breaks to restore proper funding to K-12 schools and universities." I suspect Microsoft's lawyers are careful to engage in legal tax avoidance rather than illegal tax evasion. Geekwire notes "The South Lake Union satellite facility is not a major office for Microsoft, compared to its presence in Redmond. It’s not clear why the workers didn’t protest at Microsoft headquarters."
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Protesters Blockade Microsoft's Seattle Headquarters Over Tax Breaks

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  • by Anonymous Coward on Saturday September 06, 2014 @10:25PM (#47844089)

    I suspect they protested at S. Lake Union because that is very close to downtown Seattle and an extremely visible location. Microsoft Campus in Redmond is in the in a much more suburban atmosphere, it would be much less of a visible protest there.

    • Did they ride the trolley to get to the protest?

    • by fuzzyfuzzyfungus ( 1223518 ) on Saturday September 06, 2014 @10:39PM (#47844153) Journal

      I suspect they protested at S. Lake Union because that is very close to downtown Seattle and an extremely visible location. Microsoft Campus in Redmond is in the in a much more suburban atmosphere, it would be much less of a visible protest there.

      There's also the fact that the campus is likely mostly private land, while downtown areas tend to have public ways near them.

      Depending on the local PD, your right to peaceable assembly may or may not be treated as adorably fictitious and/or a good chance to break out the cool 1033 program toys and play soldier; but you don't even have a theoretical one if you can just be rounded up for trespassing before things even start.

      Trying to protest on MS's campus would just make it a question for PR of whether the visibility is lower for ignoring you and keeping the cameras away, or having you hauled off for trespassing before you make too much noise.

    • by SuperKendall ( 25149 ) on Saturday September 06, 2014 @11:35PM (#47844415)

      I suspect they protested at S. Lake Union because that is very close to downtown Seattle and an extremely visible location.

      You have that right on the money.

      This year at WWDC there were Apple tax protestors out front before the keynote with the classic protestor drum circle and some kind of chant.

      Well the moment the cameras outside are gone? So are they. I had some respect for them before that for at least making a stand, even if I disagree with the position. But they weren't making a stand - they were making a TV show.

      Given the behavior it's hard to believe they were not all actors of one form or another. It certainly didn't seem like anyone had the kind of protesting spirit that really meant anything when they couldn't be arsed to protest longer than a few hours. I have to wonder if the Microsoft protest is of the same spiritless form.

      • by Concerned Onlooker ( 473481 ) on Sunday September 07, 2014 @12:00AM (#47844487) Homepage Journal

        "Well the moment the cameras outside are gone? So are they."

        Why waste your time parading to an empty street? Why shouldn't protestors play the PR game just as much corporations? It's all about getting your message out. Just ask the Koch brothers and their hired goons.

        • Why waste your time parading to an empty street?

          This is right in the middle of SF (4th & Howard). If nothing else there are a ton of cars going past all the time.

          Then the whole week long there are thousands of Apple developers walking in and out and handing around outside enjoying the weather (yes, sometimes SF has nice weather in June and this was one of those years).

          But basically if you are dedicated you are THERE. That's really the point. They were not there for anyone but the cameras, then it was

          • by thegarbz ( 1787294 ) on Sunday September 07, 2014 @02:34AM (#47844779)

            So? Apple developers don't care, customers may care. Protesting is about two things, PR and disruption.

            Lots of disruption cases are illegal especially in a public setting so disruption is typically reserved for private cases but then how can you be disruptive if you don't have access to the private premises? Disruptive protests are normally done by employees internally but they aren't going to complain about the tax breaks their employer received.

            In cases like this the protest is exclusively a PR campaign to raise awareness. Disruption will likely end them in jail, fined, or worse still as in the cases of the Google Buses people may not sympathise due to a misdirected attack.

            What they did here was get their face on TV. It's about the best form of public protest you can have. Who cares about a few thousand developers when you have the evening news and media sites picking up the story? In some cases getting your face on TV is the end game and there really is no point it wasting your time beyond that.

    • by SpzToid ( 869795 )

      My understanding is because the tax-free 'HQ' , oops, I meant the Operations Center in question is located in Nevada [google.com] of course, and that would obviously present a financial hardship on these common Washingtonians whose means to earn a living have been diminished.

    • It's more visible, and culturally, trying to get someone from Seattle proper to go to the eastside has always been a bit of an uphill battle, even moreso with the general cuts to public transportation.* I moved from Wallingford to Woodinville while I worked at Microsoft**, and was always impressed by the extent to which eastsiders think little of going across the lake for a show of a class, but westsiders (at least, those who don't already work on the eastside) are loathe to head in the other direction with

    • I though Microsoft was an Irish [windowsitpro.com] corporation.

  • well... (Score:3, Insightful)

    by thieh ( 3654731 ) on Saturday September 06, 2014 @10:27PM (#47844091)
    The difference between Microsoft-style tax avoidance and tax evasion is that MS just donate to politicians to reduce the amount of taxes they pay in the former while you don't pay politicians in the latter
    • Washington already collects payroll tax from Microsoft's employees, and property tax from Microsoft's buildings. There is no logical reason that they should be able to collect billions for income earned worldwide. If they try to enforce extraterritorial taxes on corporations, those corporations are going to leave. Their biggest employer before Microsoft was Boeing. Today Boeing is headquartered in Chicago, and they are building their new factories in the South.

      • Re:well... (Score:5, Informative)

        by haruchai ( 17472 ) on Saturday September 06, 2014 @11:31PM (#47844393)

        Boeing took Washington State for all they were worth and were the beneficiaries of the 1st & 3rd largest incentives in US history.

        • Boeing took Washington State for all they were worth and were the beneficiaries of the 1st & 3rd largest incentives in US history.

          Is that before, or after, the $1.2 billion that Nevada is giving Tesla for the Gigifactory?

          • After - Boeing received tax breaks equivalent to over $8Billion for siting the 787 production in Washington State.

          • by haruchai ( 17472 )

            See pg 18 on the PDF below for a list of "Megadeals" in the US up to the end of 2012.
            Boeing got $3 billion in breaks from Washington state back in 2003. And then there's the almost $9 Billion over 20+ yrs that they were just awarded for production of the 777x.

            http://www.goodjobsfirst.org/s... [goodjobsfirst.org]

            Nevada's governor thinks the return on the Tesla deal will be 80-to-1 which seems VERY optimistic given that Tesla will need a decade to reach the 1/2 milllion cars per year threshold for which they're building the Gig

      • Washington State has no personal income tax. So the only tax that it sees from Microsoft employees is the sales tax on their purchases, and the property tax on their houses.

    • Re:well... (Score:5, Informative)

      by schnell ( 163007 ) <me@schnelEEEl.net minus threevowels> on Saturday September 06, 2014 @11:18PM (#47844339) Homepage

      MS just donate to politicians to reduce the amount of taxes they pay

      Kinda sort of but not really. What most posters here seem not to understand is that it is 100% normal for companies who employ lots of people in area X to negotiate with that city/county/state's government to say in effect "because of us you have many thousands more people paying property/school/sales taxes and supporting the local economy. Other places would be willing to offer us a break on our corporate taxes if we moved there instead and benefitted their economy. So why don't you?"

      On some level this sounds like playing dirty pool but it's really not... it's the exact same thing you would do if you had your employer behind the eight ball in salary negotiations: "Other companies are willing to pay me X for my skills, so why don't you match it or I will leave?"

      So long story short, every company with the clout of Microsoft (which IIRC employs >40K employees in Washington State/Seattle Metro area) gets local or state tax breaks that Joe Schmoe's auto garage does not. Apple gets tax breaks in Cupertino, Google gets them in Mountain View, Sprint gets them in Kansas City, Verizon gets them in Basking Ridge NJ. In the greater Seattle area, Microsoft, Costco, Starbucks and other businesses with HQs there get them... Seattle felt the sting years ago of not offering enough tax breaks to Boeing and seeing their corporate HQ relocated to Chicago. (If you're interested to see who's probably getting big tax breaks where, look at the map of Fortune 500 headquarters by city [fortune.com].

      So it's rational to give large companies tax breaks to keep them in your city as a way to keep your economy strong. It may seem unfair, but all these cities and states have done enough research to conclude that doing tax favors for these big companies is worth more than taxing them at regular rates and losing the employment. So it's neither illegal or irrational on the part of the government or the corporations.

      • Now what would happen if nobody could hide economic development decisions, such as the relocation of companies between states? That is, that any decision to move, no matter how small or early, had to be publicly disclosed - and that all existing records had to be made public? That would anger thieving states like Georgia, who have no qualms about removing history from Northern states, while providing a chance for states to make an agreement.

        Or, you can have the status quo, which encourages blood-feud betw

      • Re:well... (Score:5, Insightful)

        by cyn1c77 ( 928549 ) on Sunday September 07, 2014 @12:14AM (#47844527)

        So it's rational to give large companies tax breaks to keep them in your city as a way to keep your economy strong. It may seem unfair, but all these cities and states have done enough research to conclude that doing tax favors for these big companies is worth more than taxing them at regular rates and losing the employment. So it's neither illegal or irrational on the part of the government or the corporations.

        It doesn't seem unfair, it is unfair.

        The big companies get tax breaks. The politicians get kickbacks, lobbying, and stay in office. The regular citizens pay higher taxes to make up for the company and the politician screwing them.

        Microsoft employs >40K employees in the Seattle Metro area, while the other 3.6M residents (literally the 99%) get screwed.

        • How is it unfair? The state gets additional jobs, higher tax revenues (if applicable), and most likely an economic boost from people spending money.

          In several financial and political philosophies, companies provide a net benefit and therefore should pay zero taxes. Therefore, it is your position that is unfair.

          If a state imposed higher than average taxes, and never negotiated, it would lose employment. If it gave in once, there would be a race to the bottom, which logically is zero taxes. Because busine

          • Re:well... (Score:5, Interesting)

            by AthanasiusKircher ( 1333179 ) on Sunday September 07, 2014 @07:37AM (#47845341)

            How is it unfair? The state gets additional jobs, higher tax revenues (if applicable), and most likely an economic boost from people spending money.

            At the expense of likely quid-pro-quo types of arrangements with politicians. I'm not naive, and I realize that these sorts of things happen in the real world. But every time we rationalize private deals made between big corporations (or rich people) and politicians, we're asking for more corruption.

            In several financial and political philosophies, companies provide a net benefit and therefore should pay zero taxes. Therefore, it is your position that is unfair.

            Umm, NO. Sure, you're right that some people argue for zero corporate tax. I'm not saying that's an invalid argument. But what's unfair is that if you REALLY want "zero corporate tax," you give it to ALL corporations. That's fair.

            What you're talking about is an anticompetitive practice that gives large corporations an unfair market advantage. Say I give a major tax break to a company that employs 10,000 employees. You know who gets screwed? 200 other local companies that each have 50 employees or whatever. Because they're forced to pay the normal tax rates, while your giant corporation is exempt. Sure, most of those companies may not be competing directly against the big company, but some of them might be.

            If a state imposed higher than average taxes, and never negotiated, it would lose employment.

            And if the state's corporate tax rates are uncompetitive, the FAIR way to fix that is to lower them for ALL corporations, not give an unfair advantage to large corporations that already have many advantages in the marketplace.

            Or is your goal to drive local small businesses out of business?

            By artificially lowering the tax rates for a few select corporations, you are also allowing the state to continue ignoring a potential problem of too high corporate tax rates for anyone else. Anyone with the clout to negotiate gets the lower rate, while other local small businesses get screwed. That's the exact OPPOSITE behavior of something that will drive tax rates to zero -- because the local tax rates are artificially propped up by the people who can't fight them.

            What is fair? You need to define words before you use them. I suppose I should ask, fair to whom? Because that seems to be the crux of your argument.

            "Fair" in terms of the law means that we all get to play by the same rules. No one should get to "negotiate" out of abiding by the law. If corporate tax is too high in a state or local area to draw these large businesses, the correct way to fix this is by lowering corporate taxes FOR EVERYBODY. If enough big businesses refuse to move to a state because of its tax structure, it puts pressure on the state legislature to move toward your ideal world of zero corporate tax. If, on the other hand, companies get arbitrary individual tax rates, there's no such pressure, and the only benefits accrue to the biggest companies with the best lobbyists and connections... which is a recipe for corruption and unfair to actual local smaller businesses.

          • It is unfair because other companies ARE required to pay taxes. It is unfair because groups of people are treated differently than individuals.

            Why do we have different taxes for corporations and individuals? Just have every person (legal or physical) pay income taxes. And just like current income taxes, have them pay income taxes for any income earned abroad that has not yet been taxes at the same level as at home. And do the same for the person owning the company - have them pay income taxes if the taxes p

        • Re:well... (Score:4, Interesting)

          by FlyHelicopters ( 1540845 ) on Sunday September 07, 2014 @01:03AM (#47844615)

          Microsoft employs >40K employees in the Seattle Metro area, while the other 3.6M residents (literally the 99%) get screwed.

          So tell me, if Microsoft left and took the 40k jobs with them, they would then NOT get tax breaks in Seattle.

          How would the other 99% of the Seattle residents be better off?

          Would they somehow be less screwed?

          • Microsoft employs >40K employees in the Seattle Metro area, while the other 3.6M residents (literally the 99%) get screwed.

            So tell me, if Microsoft left and took the 40k jobs with them, they would then NOT get tax breaks in Seattle.

            How would the other 99% of the Seattle residents be better off?

            Would they somehow be less screwed?

            How dare you attempt Logic on Slashdot?

          • by wytcld ( 179112 )

            So tell me, if Microsoft left and took the 40k jobs with them, they would then NOT get tax breaks in Seattle.

            Microsoft can't go anywhere. 40,000 employees aren't going to happily relocate to Pittsburg or wherever. Can you imagine the cost of building a new campus for 40,000? Can you imagine where they'd ever find a buyer to pay a fair price for the existing campus?

            • Sure they can...

              Boeing left after all...

              I live in the Dallas, TX area, Toyota is moving a big chunk of their headquarters here, several thousand employees. The local real estate market is already humming. They got big tax breaks to move here, but what has business owners excited is the creation of thousands of well paid jobs, those people become customers in local businesses, they buy homes, spend money, pay taxes.

        • by lgw ( 121541 )

          Fair is for 5-year olds.

          The 40k MS employees likely keep another 400k in the area in work providing good and services to them, as they're paid quite well by WA standards, and most people spend all the money that comes to them.

          There's no need for politicians to get kickbacks: there's nothing more powerful at the state level then bringing jobs to the state or keeping jobs in the state.

          Plus WA and local governments get the property taxes not just from the buildings on the MS campus, but the 40k houses owned by

          • Fair is for 5-year olds.

            Why?

            • Because they're the only ones simple enough that "fair" is clear and straight-forward?
              • by Euler ( 31942 )

                ..Because 5 year-olds haven't been influenced by conservative rhetoric. And believe me, I'm fairly conservative. But I hear this 'fairness isn't a real thing', and see this as a dark side of conservatism to deny fairness as a basic trait of civil behavior. To a 5 year-old, fairness is getting an equal slice of pie. To an adult, fairness is equal consideration under the law. Not really a hard concept to define. That, of course, isn't trying to argue that the world has to be made equal by redistribution

            • by lgw ( 121541 )

              Fair is for 5-year olds.

              Why?

              Heh, I can't tell if you're really asking, or simply impersonating a typical 5-year old. Just in case it's the former:

              Asking for fairness is asking that the world be so simple that the rules make sense to a young child. But fairness is a poor goal. A court system in which innocence or guilt is decided by the toss of a fair coin would be perfectly simple and unbiased, discriminating against no one (not even the guilty). Justice is better that fairness, and righteousness is better than justice (the princi

  • Itâ(TM)s not clear why the workers didnâ(TM)t protest at Microsoft headquarters."

    - this is not the question, and really, the answer is in TFA:

    But Jeff Reifman, a technology consultant and writer who used to work for Microsoft, is pointing the finger at his former employer, saying that Microsoft has used a subsidiary in Nevada to avoid paying Washington taxes. Heâ(TM)s written numerous articles about this over the years, and now published a recent commentary on Crosscut.com linking Microsoftâ(TM)s tax policy with the stateâ(TM)s school funding shortfall

    There you go, that's why they are in Nevada.

    By the way, this is again compared to Burger King for all the wrong reasons:

    In response, Hunter said that he and many other legislators tried for years to figure out whether they could tax the money Microsoft sends to Nevada. He said the answer from the stateâ(TM)s lawyers was always, âoeNo.â And he said itâ(TM)s similar to the recent move by Burger King to buy a Canadian company as a way to lower its U.S. tax bill.

    âoeTo move that big chunk of revenue to Nevada â" itâ(TM)s legal,â Hunter said. âoeSo this is just like the Burger King thing. Itâ(TM)s frustrating, and youâ(TM)ve got lots of people in Congress who are frustrated about it, but itâ(TM)s legal.â

    Burger King is a BRAZILIAN COMPANY, not American. Hasn't been American since about 1989. 70% of its stock is held by a Brazilian conglomerate. Fucking Americans are idiots, crying about a Brazilian company merging with a Canadian one, but what else is new?

    However the point is that Microsoft is a victim of unconstitutional, ill

    • by khallow ( 566160 ) on Saturday September 06, 2014 @10:57PM (#47844245)

      However the point is that Microsoft is a victim of unconstitutional, illegal government system that usurped power and is stealing people's money. Income taxes are illegal and are collected illegally for a wide range of reasons.

      The state of Washington is not held to the constitutional taxation restrictions of the US federal government. Collecting income tax is quite legal for them.

      • However the point is that Microsoft is a victim of unconstitutional, illegal government system that usurped power and is stealing people's money. Income taxes are illegal and are collected illegally for a wide range of reasons.

        The state of Washington is not held to the constitutional taxation restrictions of the US federal government. Collecting income tax is quite legal for them.

        What is more, Washinton State [wa.gov] has no income tax.

    • You can claim that income taxes are unconstitutional all you want, and even cite another poster as "proof," but the Sixteenth Amendment to the US Constitution [wikipedia.org] says otherwise. Federal income taxes are expressly permitted by the Constitution and have been since the amendment was ratified in February, 1913.
    • However the point is that Microsoft is a victim of unconstitutional, illegal government system that usurped power and is stealing people's money. Income taxes are illegal and are collected illegally for a wide range of reasons. [slashdot.org]

      I love when people make these long concise arguments about the constitutionality of income tax and declare the matter settled, conveniently forgetting the part of the constitution that empowers and tasks only the Supreme Court with judging a laws validity under the constitution. Until such day as the Supreme Court decides that your arguments have merit and the law invalid under the constitution, it shall remain enforceable law.

      • by hawk ( 1151 )

        They probably missed the parts about "only" and "tasks" because they're not there.

        Marbury v. Madison found that the power is there, but it's not in the text. (And as a practical matter, a judge that takes an oath to defend a constitution must necessarily have the ability to determine if a law he's asked to apply complies with that constitution; issuing an order applying an unconstitutional law would both violate the oath and be beyond his authority derived from the constitution . . .)

        Furthermore, in US pr

    • However the point is that Microsoft is a victim of unconstitutional, illegal government system that usurped power and is stealing people's money. Income taxes are illegal and are collected illegally for a wide range of reasons.

      Yeah, I read some of the post you linked.

      So you seem to think that the 16th amendment only defines income in an incredibly narrow manner, granting the government very limited power to tax the income of corporations and none to tax individuals. You base this on your... creative interpretation of a 1921 supreme court ruling.

      You're not alone in this interpretation, amazingly tax protesters have gone to the courts to make this argument many times, not so amazingly they have lost every single time.

      Which begs the

  • by King_TJ ( 85913 ) on Saturday September 06, 2014 @10:55PM (#47844235) Journal

    I don't get this at all?

    If a business has avoided paying some taxes *legally* and citizens are angry about it? The proper channel to go through is protesting the government that allowed it.

    Any "for profit" business has the responsibility to maximize profits for the sake of its continued existence and growth, and as a duty to its stockholders if it was publicly held. Therefore, it would be irresponsible of it NOT to take advantage of legal tax loopholes or tactics to minimize costs.

    It sounds like some people have the idea that they can "shame" businesses into volunteering to pay more tax than they're legally required to pay. I'm not saying that might not have a small measure of success in some situations -- but you'd probably achieve similar results by just randomly picketing ANY profitable business and demanding they give more to charity, or pay more of their profits to improve the local area, or ??

    The crux of the problem here is the way the laws are written, so only your legislators can correct it.

    • by khallow ( 566160 )
      I don't see your concern myself. There are obvious benefactors from such laws. And one way to both draw attention to the law and pressure the legislature is to protest in front of these businesses. It seems a straightforward strategy.
    • Exactly...

      Legal tax-loopholes generally come into being because lawmakers decide that they want to use taxation to do something other than raise the funds they require. Countries/states with very simple tax-systems generally tend to have fewer such loopholes. But when lawmakers decide that they want to use the tax system to encourage X type of business or discourage Y behavior, they add complexity. Over time, that complexity reaches the point where companies can design themselves so as to maximize the disco

    • Any "for profit" business has the responsibility to maximize profits for the sake of its continued existence and growth, and as a duty to its stockholders if it was publicly held. Therefore, it would be irresponsible of it NOT to take advantage of legal tax loopholes or tactics to minimize costs.

      There's lots of unethical practices that corporations avoid as a matter of good PR.

      Imagine if exploiting tax loopholes was so socially unacceptable that corporations lost more money than they'd make through lost sales.

      The crux of the problem here is the way the laws are written, so only your legislators can correct it.

      Partly, but there's also a possibility that the legislation is fairly well written and closing these loopholes would cause even more serious problems.

      There's also the possibility that the legislation is terribly written, and by choosing a well defined high profile target (Microsoft) they can c

    • by Tom ( 822 )

      Therefore, it would be irresponsible of it NOT to take advantage of legal tax loopholes or tactics to minimize costs.

      That is in one sentence what's wrong with our western society. Maximise profit at all costs, dodge responsibilities to the world around you, and then justify it all as being the proper way to do things.

      The crux of the problem here is the way the laws are written, so only your legislators can correct it.

      The crux of the problem is the assumption that your responsibilities to society begin and end with the laws, interpreted to your advantage as much as possible.

    • I'm tired of hearing this "companies exist only to maximize profits" garbage. Companies are controlled by people. People do not exist to maximize how much money they can make, therefore they are free to choose to control a company in a way such that it does something less profitable but more moral. There's never any proof that it's why companies exist anyway. It's just an 'edgy' way to look at society ('companies don't care about you, they only want profits'), but where is the proof that companies must maxi
  • Legal tax avoidance is just illegal tax evasion after you bought the relevant laws.

  • It seems like everyone here thinks Microsoft has some obligation to give our government money. Have you seen what our government does with that money? Do you want them to have more tanks, guns bombs? More spying equipment? To continue the war on drugs? To imprison more than 1% of the population?

    Thank you Microsoft.

    • by Shados ( 741919 )

      Besides, it indirectly does give a shitload of money to the government. Software engineers that work at MS in the US aren't exactly paid peanuts. And they have a LOT of employees. The income tax on that is massive.

  • by tomhath ( 637240 ) on Sunday September 07, 2014 @09:03AM (#47845721)
    How much would the state collect if they eliminated the income tax deduction for union dues? Seems fair that it goes both ways.
    • While we're at it let's eliminate the deduction for mortgage payments. Why are we preferring homeowners over renters? Homeowners tend to be the ones with kids who use more resources. That makes as much sense as disallowing payments required to hold a job.

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