‘Making Amazon look bad’: Microsoft supports a state tax on businesses
seattletimes.com
seattletimes.com
I do not understand how people can not understand that a percentage tax, by it's definition, does have the largest companies pay more.
They don't understand it because it isn't true on a proportional basis (and in some cases on an absolute dollar value basis, too).
Larger companies have access to tax avoidance strategies which are unavailable to smaller companies[1] which substantially changes the calculus.
I've gone through the books of plenty LargeCos. The playing field is not even.
[1] issues include inability to finance high-end tax structuring advice, writing of grants or negotiate valuations, lack of ability to amortize risk associated with an unfavourable tax ruling, lack of capital to access directorship services in tax havens etc.
Is it, though? This is a situation where Chesterton's Fence is important to consider.
No single government regulates tax worldwide, and each is iteratively attempting to balance a multitude of concerns, while remaining competitive to capital.
Additionally, many of the loopholes aren't legislative tax exemptions on the books. They're determinations regarding how and when certain things are recognized on the books. 'Fixing' those problems doesn't 'remove' loopholes. It just creates new rules which are then exploited.
Finally, with respect to tax simplification in general: Simplifying the tax code is akin to refactoring code. Sure, there are some areas where it could be engaged in without causing problems (and which would result in efficiency gains!), but much of the appeal of refactoring code lies in how we ignore the tricky edge cases when designing a new utopic system in our heads.
The legal project of re-digesting a highly complicated body of law and producing a more functional version would take, at the very least, a decade of work. So now we're hitting the complexity limits of an administration's compute ability too. Shit.
All in all: it's a bit harder than that. I wish you were right, though.
I have two taxpayers, Roy the rich ($1000 / month) and Peter the poor ($100 / month). Today we will have a 10% flat tax. Peter pays $10. Roy pays $100. The total tax take is $110 and Roy is paying 91% of it.
If we imagine a 'comfortable' lifestyle costs $200/month then there is an argument against using this flat tax system, but it is difficult to escape from the fact that Roy is doing almost all the heavy lifting from the who-is-funding-society perspective. Even if Roy has a very good team of accountants and is managing to only pay 5% of his income in tax (grossly unfair!) he would still be paying 83% of the total tax take (50 / 60). If we use percentages, the rich are going to be paying for most of what the government does, whether they pay personally or through corporate tax.
Most people overestimate how profitable companies are, the economics of business tend to squeeze margins. I've seen a lot of arguments in Australia whinging that not enough taxes are paid by companies like Quantas because they don't understand concepts like depreciation and carrying losses forward. Those concepts are quite fair once it is accepted that maybe assets take a few years life in them before they need to be replaced.
EDIT Bit slow this morning, I figured out what you meant by proportional basis.
Society as a whole benefits from Peter the poor paying proportionally less in taxes because Roy the rich simply does not consume the same proportion of his income (let's keep in mind, that in real life, Roy is 100,000 times richer than Pete, not 10x). Taxing Roy proportionately more is not only the ethical thing to do, but also the rational thing to do if you want a strong economy.
These policies aren't about what you find fair, they're in place because they are what make society prosperous.
I do not understand how people can not understand that the largest companies pay a lot of money to structure their taxes so that they pay proportionately less of their income in taxes than smaller companies do despite deriving significantly more economic benefits from the stable economic system those taxes enable.
Also, the percentage tax does not by definition mean that the largest companies pay more. It means that the most profitable companies (on an income tax basis) pay more taxes on an absolute basis than a similarly-sized company that makes less profit. However, Apple, Google, and GE are all (or at least in GE's case, was) highly-profitable companies that pay ridiculously low taxes for their profit because their "taxable" income is significantly less than their economic income.
I understand it that just fine. I just prefer to fix the problem, not the symptom.
> There are two ways of constructing a corporate tax system: One way is to make it so simple that there are obviously no loopholes, and the other way is to make it so complicated that there are no obvious loopholes.
I say this because when people make a simplistic statement about a company not paying much or any taxes on profits a lot of people are mislead into believing the company is somehow not contributing to government revenue. Which is obviously not the case at all.
If it's fair for a company to have the legal rights of a person, it's only fair they pay the same rate of taxes as a natural person.
If the share holders of the company is legally indemnify against the debts/risks of the company, then they shall also pay their fair share of taxes, and should not deduct it from the already paid portion of company tax. So this way, if you want legal protection of a limited liability corp, you have to pay double taxes. But if you accept legal responsibility if the company, then you don't get double taxed.
I don't really have an opinion on anything else you're talking about.
Mom + pop e-commerce retail sites are dying
Jet/Walmart capture what percentage of market share? If I had to guess, it'd be like... 5%?
I’ve been an Amazon employee and I’ve paid a lot of taxes here and have seen the government waste that money. Our property tax has gone up by hundreds of dollars a month and our schools, roads, and police forces are still in disarray. I don’t mind paying tax as long as it’s ised effectively and efficiently.
If you live in Seattle, schooling, roads and even the police aren’t that bad (compared to other cities), heck, you can choose to live in Bellevue where all those things are better (though at the cost of being boring). In general, taxes get used pretty darn well in WA, at least compared to other states.
You mean the police department that was investigated by the DOJ for being engaged in a "pattern or pratice" of violating constitutional rights through excessive force, specifically against minorities?
The same police department that turns a blind eye to _any_ property crime?
Just making sure that we're talking about the same Seattle Police Department here. SPD has been a disgrace for the past 10+ years.
In fairness, they are improving IMO.
2) thats SPD abiding by prosecutor enforcement priorities. Go ask the king county DA why they dismissed 1500 misdemeanors last year, why they wont prosecute theft or vandalism, or why illegal firearm possession is book and release.
Wait, seriously?
https://wallethub.com/edu/states-with-the-highest-and-lowest...
Washington state has already been through this shit with Boeing.
"The bill proposes increasing the state business and occupation tax by 20 percent on about 40 categories of technical services, such as telecom, engineering, medical and finance. And by 33 percent on tech firms with more than $25 billion in annual revenue.
But here’s where this goes off the charts, into politically unheard-of territory. It mandates a top rate, a whopping 67 percent business tax increase, for those “advanced computing businesses” with “worldwide gross revenue of more than one hundred billion dollars” per year."
Not sure if you read more than the headline but I don't think this bill targets small/mid-size businesses.
If it's going from 3% to 5% that's not as bad as 10 to 17 or whatever.
At the end, an east side Bellevue woman snobbishly complains about 425 containing Renton.
> And if you cannot afford a lawyer...well, uh, what are you doing living in Redmond? Maybe you meant Renton? They do sound similar, Redmond, Renton...
Also, Pat Cashman is a treasure. "Did you have to dial a one...before?"
They might have a marketing area, but I haven't seen it in the downtown area.
Microsoft is a relative underdog now (among the tech giants). Underdogs tend to benefit more, personally, from the greater good, and also have less clout with which to push others around. This makes them come off as being more humble, and if they're smart they lean into that image in their public relations. Just look at AMD and T-Mobile.
With this move Microsoft is trying to fertilize a shared resource, investing some of its own money but also hoping to pressure Amazon - the company it's trying to get a leg up on - to invest alongside it. Amazon has less need for the shared resource and would have to contribute a greater amount to it. On top of that, Microsoft gets some positive PR. It's a smart move.
Edit: I've been informed that Microsoft is currently #1 in market cap, so not an underdog overall. They feel like an underdog in most isolated product categories, but maybe this really is purely a PR move.
Microsoft is currently the largest company in the world by market cap.
It's just a general perception, as a casual observer, that Microsoft has been ceding lots of territory lately and not really gaining much.
Definitely going to disagree there. While Google has done more work on commercializing piss-poor AI, MS Research has been at the forefront of AI research since before Google learned how to make money. Google is definitely the second fiddle when it comes to AI research, and it's not even close.
> Amazon (and possibly also Google?) has it beat in cloud services
No, not google.
Which reminds me. I knew some folks who worked at Microsoft who used to talk about open source as if it was cancer - in 2005. Now they display equal enthusiasm for the opposite view. If you have actually seen it, it looks quite like a comedy scene from one of those movies which spoof corporate life, where all employees act gung-ho no matter what.
How so? According to NASDAQ, MSFT is valued higher than all of the FAANG companies. It's north of $900B right now.
As of right now, MSFT market cap is $895B and AAPL is $888B. Some underdog!
lol
How do you define a Tech giant?
By Market cap they are #1. Here are top 5.
1. Microsoft $895B 2. Apple $888B 3. Amazon $867B 4. Google $816B 5. Facebook $473B
They have been in top 3 for last 30 years with a robust business model. They missed on Mobile and search but hey it would be hard for any tech company to top in each market.
They sure do a lot of things right lately though.