Ballmer Says Obama's Tax Increases Would Move Microsoft Jobs Offshore

God knows if anyone company out there deserves accounting tricks, it is Microsoft...

In this era of war spending, banks collapsing, etc, etc, etc, THIS is the sh*t you're going to worry about? What one CEO, that backed the candidate no less, says does not policy make.

Poor microsoft

Huh, that Bloomberg article made MS out to look like complete tax cheats.

Typically, he said, a company like Microsoft develops a product like Windows in the United States and deducts those costs against U.S. income. It then transfers the technology to a subsidiary in Ireland, where corporate tax rates are lower, without charging licensing fees. The company then assigns its foreign sales to the Irish subsidiary so it doesn’t have to claim the income in the United States.

“What Microsoft wants to do is deduct the cost at a high tax rate and report the profits at a low tax rate,” Bosworth said. “Relative to where they are now, the administration’s proposals are less favorable, so there will be some rebalancing on their part.”

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I say good for Obama. If you're going to transfer something off-shore to avoid paying taxes on it, don't deduct the expenses that you paid to develop it...

boxxerace said:

Here is an EASY button of a solution: Reduce Corporate Tax rates to be competitive with Ireland AND slowly change the foreign tax policy (or enforce in four+ years to allow for businesses to plan and move).

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And the money is going to be made up where? You can't just arbitrarily reduce taxes for corporations without finding some other way to obtain the capital lost (and if you say tax cuts will make up the difference with increased revenue, you get a neg rep....)

I'm fine with reducing our tax burden to compete with Ireland if we reduce our expenses to be in line with Ireland. How much does Ireland spend on their military again? $800m? A whopping 14 tanks? What's the VAT tax in Ireland? (hint: 21%) How's their economy doing? 2nd downgrade in their national debt rating in 3 months?

You can't point to Ireland's low corporate tax rate without noting that they pay almost nothing in military spending, have a HUGE VAT tax added to just about everything they buy and their economy is in the sh!tter right now. Yeah, great country to emulate...

Yes, what M$FT is doing now is legal, but it shouldn't be. If they want to develop here, and produce product here, they shouldn't be allowed to ship a CD off to Europe and avoid all of the taxes on income gained by selling the product by claiming that the program is "owned" by an Irish subsidiary. All the Obama team is trying to do is tell M$FT that they can't deduct expenses here, if they're not going to count the sale of the product as American income. What exactly is so bad about that?


edit: btw, if we cut back our military spending to the same per capita that Ireland spends, we'd be spending $60b, or less that 10% of what we currently spend... I bet that extra $740b would pay for quite a few corporate tax breaks.

boxxerace said:

Here is an EASY button of a solution:

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You're right, paying cheats to stay here WOULD keep them within the borders. That IS easy. I can't believe we didn't think of it sooner.

Reduce corporate taxes? Is there such thing as a negative tax rate?

Yes. Corporate welfare.

Microsoft is steadily losing money and would be looking to ship jobs overseas like Intel does when stuff sucks. The trick is they feel they can blame Obama and not bad business ventures.

Many years ago the CEO of my company was talking to a group of engineers. He was laying out his plan to shift manufacturing then product support and product design overseas to take advantage of low cost labor. Someone in the audience piped up and asked when they planned on shifting executive roles to low cost options overseas.