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Comment by new_here | Hacker News Reader

Take a moment to comprehend those numbers:

FY18/19 - under $10bn profit

FY19/20 - $314.7bn profit (3/4 of Ireland's GDP) and paid no tax on it.

> The subsidiary, which collects licence fees for use of copyrighted Microsoft software around the world, recorded an annual profit of $314.7bn in the year to the end of June 2020, according to accounts filed at the Irish Companies Registration Office. Its profits jumped from just under $10bn the previous year and compare with Ireland’s 2020 GDP of €357bn ($437bn).

> Tax transparency campaigners described the “tax aggression displayed by Microsoft, and facilitated by Ireland” as “beyond belief”.

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And seen in another thread: Microsoft is lobbying the US govt to spend 250 million to make more software engineers by introducing computer courses in schools so that there are more SE on the market in the future so that they can hire for cheaper.

Meanwhile, individuals are paying 20–50% income tax.

What a wonderful world.

> is lobbying the US govt to spend 250 million to make more software engineers

It cost money to "train" engineers , better use taxpayer money to train those damn "human ressource" rather than those 300Billions of Profit.

This argument comes up a lot but nobody is paying 50% income tax in the US. Even if you make a million dollars a year in W2 income, in California, which has the highest marginal tax rate, you'll pay roughly 40% effective, almost entirely to the federal government. Realistically you're going to make a lot less than that W2, which drives the effective rate down considerably, and as remote work becomes more of an expectation, living in a state with high income taxes will become more and more of a choice. Plenty of states have bustling urban centers and low single digit income taxes.

Also I think it's pretty disingenuous to assume that MS wants to see computer courses taught in school to drive down the cost of labor.

>Also I think it's pretty disingenuous to assume that MS wants to see computer courses taught in school to drive down the cost of labor.

So, what's another good explanation as to why software heavy businesses want more software engineers? It seems to me that it's to increase supply to lower costs. If the claim is that they can't capture enough, they can raise comp even more to capture people who don't work in their businesses, train them on the job by reestablishing employer/employee loyalty, etc. Plenty of options there that aren't being pursued, the most obvious explanation as to why is because those options are costly.

Such businesses have been trying to lower expensive technical labor costs for decades now, trying all sorts of strategies (non-compete hire agreements, outsourcing/offshore teams, pushing more towards capturing recent grads with lower expectations, FLSA overtime exemptions for computer professions, reducing employment mobility by increasing hiring barriers, institutionally and indirect built in ageism, ...). I tend not to give 'the boy who cried wolf' too many chances, and that ship has long sailed.

Remember that Microsoft also benefit from more other businesses becoming software businesses, and it seems like more people in the workforce knowing at least the basics of computers would help with that.

You mean the basics of Microsoft products, not computers.

In Europe they've bribed most of the school systems so computing is basically just Word and Excel.

- the world is bigger than the US, there are places in Europe where a 50 or 55% tax rate is a thing (hi Netherlands)

- if it’s not to drive the cost down, why else increase supply? It’s a sellers market at the moment and the big five hate it because it means they must pay engineers more because they have to, gasp, compete (for talent in that case)

> Also I think it's pretty disingenuous to assume that MS wants to see computer courses taught in school to drive down the cost of labor.

SWEs are some of the largest cost for any tech company, why do you feel it is disingenuous? It's a company, makes profits, if they drive down labour costs their profits increase, as any company naturally will tend to (even more larger public ones). Driving down cost of labour is basically all the motivation towards automation since time immemorial, SWEs can't be automated yet, the best course of action is to pump more SWEs to drive the labour cost down.

Not sure what else you think that would compel Microsoft to do that, interested to hear.

Actually, if you make $1M in W2 income in San Francisco, your tax burden (from taxes on income) is almost exactly 50%.

You can verify in the link below: 330K federal taxes, 106K state, 30K FICA (employee contribution) and 30K FICA (employer contribution)

That adds up to 496K / $1M in taxes on income, or effective rate of 49.6%. If you're married, however, that drops to ~45% effective.

https://smartasset.com/taxes/income-taxes#qwJ9noj3c1

BS... you're excluding Property Tax, Sales Tax, etc

Which are not income taxes.

Income tax is not the only tax one pays. Every penny one spends, saves and withdraws is taxed. It may add up to more than 50% in some instances.

The thread is specifically about income taxes. Everyone always wants to act like $0.75 of every dollar they make goes to The Man but it's just not true. Most of the money you make, you keep, to spend on your needs and wants.

People making a quarter million a year whinging about income taxes is offensive by its own right, but it becomes even more so when they arbitrarily double the amount actually paid to try to prove from technolibertarian talking point nonsense.

The world extends beyond the US and there are places in the EU where a 50–55% marginal tax rate is a thing.

I’m not against paying taxes at all, my comment was about MS (in that case) making over 300bn and paying 0.00$ of taxes while individuals make 10–100k and pay significantly more taxes than MS Ireland did on their 300bn. I don’t think that’s fair. Furthermore, individuals are unable to make business deductions that MS and other companies can (and spend pretax dollars to buy things while the rest of us spends after tax dollars)

My post was to point out that corporations are massively advantaged in comparison with actual, alive human beings.

Companies pay, behind the scenes, another chunk of payroll tax that is roughly equal to what the employee pays. It doesn’t make the total 50%, but the taxes paid on your salary are higher than just 25%, even if it doesn’t show up on your paystub.

So now we're including taxes paid by the company when discussing personal income tax rates?

The amount paid is directly proportional to your payroll cost, just like your income taxes. Both amounts are paid by the company directly to the IRS. The only real difference is that one amount is just put on your pay stub, one is not.

It seems disingenuous to not consider it a part of the taxes paid based on your income (though it certainly sounds better to say that we only pay, say, 25%, instead of 40%).

Since this cost is associated with payroll (a.k.a. your income, as a worker), it's fair game to put the employer contribution to FICA under taxes on worked income.

I am not saying you are wrong; just providing another perspective. When every penny you *spend* or *save* is taxed, you end up paying more than 50% of what you made to The Man. Either tax the income or tax the spending, not both, is my argument.

> This argument comes up a lot but nobody is paying 50% income tax in the US.

Call it what you will, add up the local taxes and registration fees and and and people may as well be in Europe instead of the States...

One company’s single year profit is three quarters of GDP of a nation of 5 million people!!! With that much economic power, it is no wonder these multinationals write the rules as they please

Makes you wonder when we'll get back to the point they have their own militaries

I have a feeling that's something Elon Musk might have considered more than once in his own head...

TBH, it looks like this was just money moved around from other low/no-tax subsidiaries.

    Profit after tax increased ... due to the liquidation of two subsidiaries.

Like, it's still bad, but this money presumably represents many years of accumulated profits, as otherwise the number makes no sense (MS made a profit of $14bn in 2020).

See: https://www.documentcloud.org/documents/20794038-microsoft-r... for the actual directors report.

Something doesn’t make sense. If it’s $437B in profit, then revenue must be higher?

And what this is saying is that Ireland’s GDP will double in 2020?

Yeah, it’s an artificial number. It does not reflect the true profitability of MS. As another commenter explained (https://news.ycombinator.com/item?id=27380998) the figure contains money from selling two subsidiaries. That would also explain the steep rise of the profit.

It will trickle down one day. You just have to wait for it.

Warning, the trickle may smell like urine. Don’t look up.

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