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‘Making Amazon look bad’: Microsoft supports a state tax on businesses

141 points by benryon 8y ago

_bxg1 8y ago
> I don’t know what’s gotten into Microsoft lately. Remember when it was the Death Star, monopolistically glowering over technopolis and threatening to cut off the air supply of competitors and regulators alike? 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.
- jermaustin1 8y ago
  > Microsoft is a relative underdog now How so? According to NASDAQ, MSFT is valued higher than all of the FAANG companies. It's north of $900B right now.
  - MagicPropmaker 8y ago
    If that's what people believe, it's brilliant! Part of the strategy of Apple's resurrection was making people think they were the little guy; the hip, cool alternative for people who "think different." Now Microsoft can play the same game. As of right now, MSFT market cap is $895B and AAPL is $888B. Some underdog!
- rlanday 8y ago
  > Microsoft is a relative underdog now (among the tech giants). Microsoft is currently the largest company in the world by market cap.
  - _bxg1 8y ago
    Hmm, that's surprising. It has a dodgy foothold in mobile, Amazon (and possibly also Google?) has it beat in cloud services, Google Docs has taken a chunk of Office's territory, Chrome OS is overtaking Windows in education, Mobile+Apple+Chrome OS are swallowing it in personal computing and (I believe) gaining some ground even in enterprise. It doesn't seem like Microsoft has dominance in anything but desktop OS right now. It's just a general perception, as a casual observer, that Microsoft has been ceding lots of territory lately and not really gaining much.
    - polyomino 8y ago
      Microsoft used to be a boxed software business, now they're transitioning to saas. It's really that simple.
      - _bxg1 8y ago
        Right, but Amazon and Google are arguably better than them at SaaS. AWS is second to none for cloud hosting, and Google is second to none for AI.
        cwyers 8y ago
        Only if you ignore the categories of software where Microsoft leads -- Active Directory and Office 365 are SaaS offerings that Microsoft has that are seeing massive adoption, and Microsoft is using that to leverage businesses onto their other cloud offerings.
        gamblor956 8y ago
        Google is second to none for AI. 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.
- CPLX 8y ago
  > Microsoft is a relative underdog now (among the tech giants) lol
- mallocfree 8y ago
  >Microsoft is a relative underdog now (among the tech giants). 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.
  - anth_anm 8y ago
    Settling for #2 in search and cloud isn't exactly a bad consolation prize.
- kerng 8y ago
  Underdog? It's the largest company by market cap in the world. That can be viewed as being the most successful company there is (over time). They sure do a lot of things right lately though.
hbosch 8y ago
Isn't the general argument that state taxes mean almost nothing to businesses like Boeing, Microsoft, Amazon, et al (in Washington State) but are actually a huge pain in the ass for small/mid-size businesses? The quote featured in this headline underscores an editorial bias that is pro-Microsoft (who keeps their campus in the suburb of Renton) and anti-Amazon (the scapegoat for rising Seattle real estate).
- almost_usual 8y ago
  >Isn't the general argument that state taxes mean almost nothing to businesses like Boeing, Microsoft, Amazon, et al (in Washington State) but are actually a huge pain in the ass for small/mid-size businesses? "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.
  - anth_anm 8y ago
    That's true, but what is the rate now? If it's going from 3% to 5% that's not as bad as 10 to 17 or whatever.
    - linuxhiker 8y ago
      The B&0 tax is off the top based on gross revenue generated in Washington state. For my small company, 5% would put me out of business. I don't recall the exact rate we pay but it's nowhere near five.
- chihuahua 8y ago
  Most of the Microsoft main campus is in Redmond, not Renton. They have some buildings in Bellevue and Seattle. But as far as I know, Microsoft has no office space at all in Renton.
RHSeeger 8y ago
> Let’s ask the largest companies in the tech sector, which are the largest employers of high-skilled talent, to do a bit more I do not understand how people can not understand that a percentage tax, by it's definition, does have the largest companies pay more.
- wlesieutre 8y ago
  I'm quite sure that the President and CLO of Microsoft who said that understands exactly what he said. "More" in context means more than they're doing now. Not "do more than a lemonade stand that made $200 last quarter," which no shit, they're doing already.
- ABCLAW 8y ago
  >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.
  - RHSeeger 8y ago
    There seems to be a repeated response to what I said, so I'll just respond once. The fix for companies using loopholes to avoid taxes is not to raise the tax rate. The fix is to remove the loopholes.
    - ceejayoz 8y ago
      A decent chunk of the tax savings from loopholes is channeled back into preventing those loopholes from closing.
    - 8y ago
influx 8y ago
How much tax are you going to get when Amazon shifts to HQ2? Bezos deliberately started Amazon here in Washington because there was no state tax. 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.
- seanmcdirmid 8y ago
  Property and sales tax are necessary in Washington in lieu of an income tax. 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.
  - cheeze 8y ago
    > police aren’t that bad (compared to other cities) 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.
    - donavanm 8y ago
      1) i presume youre talking about the consent decree and mou dating from ~2011. Which spd has been in full conpliance with. And IIRC this is the last year of “sustainment” monitoring. 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.
      - 8y ago
pikapikamtf 8y ago
i don't think it takes any effort to make amazon look bad
- MuffinFlavored 8y ago
  yet there's no competitor even close to capturing its marketplace share 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%?
IXxXI 8y ago
These tax hikes are protectionist and designed to stifle american business so that asian and european tech sectors can be more competitive.

141 points by benryon 8y ago

> I don’t know what’s gotten into Microsoft lately. Remember when it was the Death Star, monopolistically glowering over technopolis and threatening to cut off the air supply of competitors and regulators alike? 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.

jermaustin1 8y ago
> Microsoft is a relative underdog now How so? According to NASDAQ, MSFT is valued higher than all of the FAANG companies. It's north of $900B right now.
- MagicPropmaker 8y ago
  If that's what people believe, it's brilliant! Part of the strategy of Apple's resurrection was making people think they were the little guy; the hip, cool alternative for people who "think different." Now Microsoft can play the same game. As of right now, MSFT market cap is $895B and AAPL is $888B. Some underdog!
rlanday 8y ago
> Microsoft is a relative underdog now (among the tech giants). Microsoft is currently the largest company in the world by market cap.
- _bxg1 8y ago
  Hmm, that's surprising. It has a dodgy foothold in mobile, Amazon (and possibly also Google?) has it beat in cloud services, Google Docs has taken a chunk of Office's territory, Chrome OS is overtaking Windows in education, Mobile+Apple+Chrome OS are swallowing it in personal computing and (I believe) gaining some ground even in enterprise. It doesn't seem like Microsoft has dominance in anything but desktop OS right now. It's just a general perception, as a casual observer, that Microsoft has been ceding lots of territory lately and not really gaining much.
  - polyomino 8y ago
    Microsoft used to be a boxed software business, now they're transitioning to saas. It's really that simple.
    - _bxg1 8y ago
      Right, but Amazon and Google are arguably better than them at SaaS. AWS is second to none for cloud hosting, and Google is second to none for AI.
      - cwyers 8y ago
        Only if you ignore the categories of software where Microsoft leads -- Active Directory and Office 365 are SaaS offerings that Microsoft has that are seeing massive adoption, and Microsoft is using that to leverage businesses onto their other cloud offerings.
      - gamblor956 8y ago
        Google is second to none for AI. 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.
CPLX 8y ago
> Microsoft is a relative underdog now (among the tech giants) lol
mallocfree 8y ago
>Microsoft is a relative underdog now (among the tech giants). 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.
- anth_anm 8y ago
  Settling for #2 in search and cloud isn't exactly a bad consolation prize.
kerng 8y ago
Underdog? It's the largest company by market cap in the world. That can be viewed as being the most successful company there is (over time). They sure do a lot of things right lately though.

hbosch 8y ago

Isn't the general argument that state taxes mean almost nothing to businesses like Boeing, Microsoft, Amazon, et al (in Washington State) but are actually a huge pain in the ass for small/mid-size businesses? The quote featured in this headline underscores an editorial bias that is pro-Microsoft (who keeps their campus in the suburb of Renton) and anti-Amazon (the scapegoat for rising Seattle real estate).

almost_usual 8y ago
>Isn't the general argument that state taxes mean almost nothing to businesses like Boeing, Microsoft, Amazon, et al (in Washington State) but are actually a huge pain in the ass for small/mid-size businesses? "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.
- anth_anm 8y ago
  That's true, but what is the rate now? If it's going from 3% to 5% that's not as bad as 10 to 17 or whatever.
  - linuxhiker 8y ago
    The B&0 tax is off the top based on gross revenue generated in Washington state. For my small company, 5% would put me out of business. I don't recall the exact rate we pay but it's nowhere near five.
chihuahua 8y ago
Most of the Microsoft main campus is in Redmond, not Renton. They have some buildings in Bellevue and Seattle. But as far as I know, Microsoft has no office space at all in Renton.

RHSeeger 8y ago

> Let’s ask the largest companies in the tech sector, which are the largest employers of high-skilled talent, to do a bit more I do not understand how people can not understand that a percentage tax, by it's definition, does have the largest companies pay more.

wlesieutre 8y ago
I'm quite sure that the President and CLO of Microsoft who said that understands exactly what he said. "More" in context means more than they're doing now. Not "do more than a lemonade stand that made $200 last quarter," which no shit, they're doing already.
ABCLAW 8y ago
>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.
- RHSeeger 8y ago
  There seems to be a repeated response to what I said, so I'll just respond once. The fix for companies using loopholes to avoid taxes is not to raise the tax rate. The fix is to remove the loopholes.
  - ceejayoz 8y ago
    A decent chunk of the tax savings from loopholes is channeled back into preventing those loopholes from closing.
  - 8y ago

influx 8y ago

How much tax are you going to get when Amazon shifts to HQ2? Bezos deliberately started Amazon here in Washington because there was no state tax. 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.

seanmcdirmid 8y ago
Property and sales tax are necessary in Washington in lieu of an income tax. 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.
- cheeze 8y ago
  > police aren’t that bad (compared to other cities) 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.
  - donavanm 8y ago
    1) i presume youre talking about the consent decree and mou dating from ~2011. Which spd has been in full conpliance with. And IIRC this is the last year of “sustainment” monitoring. 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.
    - 8y ago

pikapikamtf 8y ago

i don't think it takes any effort to make amazon look bad

MuffinFlavored 8y ago
yet there's no competitor even close to capturing its marketplace share 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%?

IXxXI 8y ago

These tax hikes are protectionist and designed to stifle american business so that asian and european tech sectors can be more competitive.