Currently, Washington State faces a $2.6 billion budget deficit. Our schools are overcrowded. Our teachers are underpaid. Seattle recently considered making "D" a passing grade to increase graduation rates.
Our infrastructure is crumbling. Highway 520, the world's largest floating bridge and commuting route for thousands of Microsoft employees, is nearly fifty years old and must be replaced. Seattle's Highway 99 viaduct may be shut down in the next few years because officials fear it may collapse in an earthquake.
This is the result of boom times: Microsoft is one of the richest, most successful corporations in American history. In the past twelve years, Microsoft earned $127 billion in profit from $460 billion in revenue and currently has $36 billion in cash on hand.
Microsoft has made its home here since 1979. It's success is largely built on its 40,224 Washington employees, its 79 local sites and our existing infrastructure and services.
Microsoft has created more than 10,000 millionaires. Yet, there is no income tax here. Not only would Microsoft have to pay its employees 10-20% more on average in other states, it's upper middle class employees enjoy the benefits of the country's most regressive tax system:
People earning less than $20,000 annually pay 17.3 percent of family income toward sales and excise taxes and property taxes, the report said. People making between $99,000 and $198,000 each year pay 7.6 percent toward their tax bill. Meanwhile, people in the top 1 percent of earners - those making more than $537,000 a year - pay just 2.9 percent, the report said.
- Who Pays? (Institute on Taxation & Economic Policy), Nov. 2009
Avoiding A Vital Tax
Washington's .484 percent B&O Royalty Tax is one way the company is required to support our general budget fund for the service it and its employees rely on: education, courts, public health, technical colleges, parks, et al. The Legislature even cut the tax by 66% in 1997, but this was not enough for Microsoft to halt its plans.
Given Microsoft's success, it's attempts to dodge this tax are offensive and unnecessary. Microsoft has helped create Washington's current fiscal crisis. Is it really in the best interest of Microsoft's shareholders to keep thumbing its nose at Washington taxpayers?
When it's not dodging taxes, Microsoft lobbies the Legislature on its behalf. In the last five years, Microsoft has spent more than $1.54 million enforcing the status quo. For every dollar it spent lobbying, it managed to dodge $260 in state taxes.
Meanwhile, Microsoft Chairman Bill Gates gives billions to his foundation to support global charities while Washington's infrastructure disintegrates at home. His father William Gates Sr. has even written a book on tax fairness and the importance of the estate tax. The hypocrisy is lost on them.
Microsoft says the transparency of its business practices are a core value but it won't reveal the nature of its Nevada tax dodge for public review. It calls on governments to commit to transparency while Washington refuses to release records of its enforcement of Microsoft's own tax practices.
Just as Microsoft expects its customers to respect the intent of its End User License Agreements (EULA) and not illegaly copy its software, Washington State taxpayers expect Microsoft to respect the intent of our tax laws.
A company as wealthy as Microsoft should not be engaging in tax dodges to the degree that it endangers the public safety and welfare of the residents in which it makes its home.
The best interests of Microsoft's shareholders are no longer served when its employees are at risk at home, deprived of vital services and the good will of Washington taxpayers turns broadly against the company.
- Study: Washington state has USA's most regressive taxes, Nov. 18, 2009
- Seattle Eyes Dropping Graduation Standard to D Average (KIRO TV), Sept. 16, 2009
- No income tax in Washington State (Wa. Dept. of Revenue)
- Seattle's Other Mega-Project - Decision Time for New 520 Bridge (KPLU), Nov. 16, 2009
- Take Down the Viaduct Now? (Seattle Transit Blog), Oct. 27, 2009
- SR 520 Floating Bridge - Simulated failure by earthquake, Apr. 15, 2007
Recent Comments