7 ms·

I have to pay 40% of my income as income tax. I have HAD ENOUGH. This is infuriating. What can we do?

by malux85 5y ago

ClumsyPilot 5y ago
Corporations are people, we are the serfs
MikeUt 5y ago
Respect copyright and patents as much as Microsoft respects taxation.
- howaboutnope 5y ago
  That's way too tame and already too hardcore for HN.
deleted 5y ago
[deleted]
egman_ekki 5y ago
I guess earn enough so that it makes sense to pay a lawyer and an accountant to create this setup for yourself... maybe a startup idea? :)
deleted 5y ago
[deleted]
waterglassFull 5y ago
If you are fortunate enough to be in a position where you're earning enough to pay 40% tax then great for you! Paying tax is good for society, what's not great is companies avoiding it. The latter doesn't negate the former.
- callamdelaney 5y ago
  Oh, it's great that it's great society. Sucks pretty hard for him though.
  - um_ya 5y ago
    "Pay your fair share". I cringe every time I hear this from people. Rich people pay WAY more than what they get back from the gov.
    - dariosalvi78 5y ago
      well, the idea is that the richer you are the more you contribute to society.
      - callamdelaney 5y ago
        Wouldn’t we achieve the same with a flat tax rate?
    - three14 5y ago
      Rich people don't usually get handouts from the government, but they get something more valuable - a social order, enforced by the government, that allows them to be rich. Suppose you were rich, but you lived in a place where rich people tended to get kidnapped and held for ransom - being rich wouldn't be quite as good of a deal. The social order disproportionately benefits the rich, so they should pay more to keep it going.
    - dragonwriter 5y ago
      > Rich people pay WAY more than what they get back from the gov. Only if you ignore the role of the government in defining and enforcing (violently, where necessary) property rights, which is what allows “rich people” —particularly rich through various forms of intangible, indirect, and directly-physical-but-beyond-immediate-personal-supervision property — to, as such, even exist.
    - medvezhenok 5y ago
      Rich people can extract value - i.e. park $1B into S&P500, and reap $40M in returns every year. How much work did they do to do the above? Zero (if they inherited 1B). How much are they taxed on it? 20 percent of $40M = $8M. Where as someone who worked 40 hours a week for the whole year and made $200K gets taxed... exact same 20% effective (federal), and another ~15% (employer+employee) in FICA. Part of the value of paying taxes is to ensure that the people who's labor you're extracting value from don't rebel and rise up against you.
- TheGigaChad 5y ago
  Die commie rat.
neilwilson 5y ago
"What can we do?" Well you can look at it in the round and realise that your income is similarly higher than it otherwise would be because government spent money into the economy that it is now extracting as tax. Moving the tax around doesn't avoid you paying it. It just gets rolled into the price of what you buy instead. That's because in aggregate corporate costs including taxation are a component of final consumption expenditure. While there are fewer jobs than people that want them the incidence of charges on corporations will always end up being paid by workers one way or another. That's the whole point of the 'unemployment buffer' put in place during the neoliberal era - to make sure that price changes can't be easily passed through to wage rises and thereby resolve the distributional conflict in favour of capital.
maccard 5y ago
> I have to pay 40% of my income as income tax. So do all the engineers, PMs, etc working at Microsoft.
- KMag 5y ago
  All of the MS engineers in the U.S. have an effective income tax rate of 40%, not a marginal tax rate of 40%? Assuming Washington State takes about 10% marginal tax... that's about half their income coming in above the 32% federal tax bracket which starts at $163k. Is a starting salary for an engineer at Microsoft really around $320,000/yr.? If they're really pulling in that, one would hope they'd have some long-term capital gains, which would further pull down their effective income tax rate.
  - maccard 5y ago
    Very few people _anywhere_ are paying a 40% effective tax rate. I wasn't aware of the Washington state tax rate though.
    - KMag 5y ago
      I'm not sure what it is in Washington. In New York 10 years ago, my marginal tax rate to the state was around 10%.
- seanmcdirmid 5y ago
  Many of those are in Washington state, which doesn’t have an income tax. It is almost impossible to get to 40% with federal income taxes and payroll alone. They are probably maxing out their 401k as well as various other pre tax contributions that can be made.
  - maccard 5y ago
    I didn't know Washington state had no income tax! If you count 401k/marriage allowances, personal allowances etc, then there are very very few people anywhere paying 40% income tax. In Ireland, you're not paying 40% until you make 120k which is a very small amount of people.
dalbasal 5y ago
>>What can we do? It's a tough question. The tendency is to react superficially: Moralizing reactions, emotional reaction, first principles takes. The way tax actually works is via accounting "standards," tax law and corporation law... across multiple jurisdictions. A thousand-detail complex , where morals, emotions and first principles are literally meaningless. Actual meaning can only be derived with scenario plans and spreadsheets. Words like "profit," "company," "revenue" and such don't have inherent meanings, in that world. They're just objects with associated rules. The pro-corporate side of this debate (debate is the wrong word) deals entirely in the latter terms. Terms that the majority of journalists and politicians can't work with. They tend to win. When the other side does consider the reality of mess, they tend to conclude radical/unrealistic conclusions like "throw everything out and start from scratch." At this point, complexity is hardened by international agreements and trade rules. IMO the actual place to start is corporation law, not tax law. If entities can own other entities, or part thereof in an endless cascade...words like "tax rate" have no meaning. Another, more radical approach is rethinking the idea of public wealth. The currently ongoing collapse of monetarism is, perhaps, an opportunity. Tax public companies x% of their shares per year. Hold, to avoid price deflation. Offload shares as part of macroeconomic/monetary policy (ie, when we run deficits), to avoid inflationary scenarios such as the current one. I would take the same approach for wealth taxes. Capital gains, property, etc. Tax x% of current market value annually, not income or realized gains. It won't be perfect, but everything gets marked to market eventually.
- gruez 5y ago
  >Another, more radical approach is rethinking the idea of public wealth. The currently ongoing collapse of monetarism is, perhaps, an opportunity. Tax public companies x% of their shares per year. 1. this disproportionately affects companies with higher capital requirements than lower ones. Think spacex compared to a SaaS. 2. this doesn't solve the underlying issue of moving to a jurisdiction with lower taxes. let's say US taxes 1% of shares every year, but the company offshores to bermuda. then what?
  - dalbasal 5y ago
    >> disproportionately affects companies with higher capital requirements How/Why? >> underlying issue of moving to a jurisdiction with lower taxes Well... nothing simple solves this in full. However, "loophole" in this article works by attributing income from IP licensing (an internal transaction between Apple owned entities) to Ireland, which does not consider this a taxable transaction. A "share tax" would apply to the same entity that shareholders own a stake in, it doesn't try to disentangle subsidiary structures. Companies might try to list on Bermuda's stock exchange. I wouldn't discount that possibility, but it won't happen overnight.
rorykoehler 5y ago
40%? Usually that kind of rate applies to an upper progressive tax band. Where do you live?
I_am_tiberius 5y ago
Sorry but this is not a good comparison. Microsoft created many jobs which are all paying this kind of income tax. This article is about corporate tax which is tax on the company's profit.
DFHippie 5y ago
Are you sure you pay 40%? Googling around a bit to find the US income tax rates (assuming you are in the US) I found this: https://www.bankrate.com/finance/taxes/tax-brackets.aspx https://www.bankrate.com/finance/taxes/tax-brackets.aspx This is really just the first thing I looked at, but it seems to provide the desired information. The highest bracket, for income above roughly 550k, is 37%. So considering only federal income tax it is impossible to pay 40% of your income in taxes, but also the first 550k or so of your income would be taxed at lower rates.
- sethammons 5y ago
  Now toss on state income tax. And don’t forget about AMT (alternative minimum tax). Sure, you need a higher income to hit these thresholds, but it is not as functionally high of an income as you may think it is.
- seanmcdirmid 5y ago
  If you throw in state income tax and consider payroll taxes, hitting 40% isn’t that hard, if your income is 1099, hitting 40% is pretty easy.
- malux85 5y ago
  I’m not on the US
markus_zhang 5y ago
You can't do much under the current instituitions. The elites of United States spent huge effort these hundreds of years to make sure that 1) Their income mostly relies on the United States as a financial/military beast, and 2) Whatever ordinary people suffer from, be it high tax or flood or lightning bolts, the elites will not be affected and can safely live in areas well protected.
Cthulhu_ 5y ago
Vote for politicians that want to tax the rich. I mean this can be solved by forcing Bermuda to charge taxes for example. If they REALLY want to escalate things, Bermuda can be strongarmed into compliance - a country can put a boycott on Bermuda, like the US does with e.g. Iran and NK at the moment. Any company doing business with Bermuda then - directly or indirectly - will be in a lot of trouble. But they don't dare to take a firm stance, because the politicians that make the decisions benefit from the system. Just look at how many politicians had accounts revealed via the Panama Papers.
dariosalvi78 5y ago
I have an idea: Ireland could cut electricity, telecom, drain, rubbish collection, road access, police, firemen and health services just and only around those buildings where the company operates. Maybe they learn the value of paying taxes (or more probably not).
adolph 5y ago
Why should “we” (aka mostly other people) do something about your problem (aka HAD ENOUGH)? If the cost of getting to net Y cash inflow is X gross income where X = Y + (.66Y) then solve for X and move on, or perform the cost benefit analysis for moving to another tax jurisdiction. The solution is yours to execute.
rmah 5y ago
You can stop believing the idiocy printed by rags masquerading as newspapers. Microsoft did not even make £220B (apx $310B) revenue globally in the 2020 fiscal year, much less in one subsidiary. Their total global revenues were $143B and total global net income (aka profit) was $44. If The Guardian can't fact check the basics, how can you trust anything else they write?
boudin 5y ago
What is infuriating the fact that you pay taxes or that a company like Microsoft do not? If it's the first one I can't disagree more, I'm paying kinda the same percentage and I'm happy to do so personally. If it's the second one, I can't agree more that this is infuriating indeed.

I have to pay 40% of my income as income tax. I have HAD ENOUGH. This is infuriating. What can we do?

ClumsyPilot 5y ago

Corporations are people, we are the serfs

MikeUt 5y ago

Respect copyright and patents as much as Microsoft respects taxation.

howaboutnope 5y ago
That's way too tame and already too hardcore for HN.

deleted 5y ago

[deleted]

egman_ekki 5y ago

I guess earn enough so that it makes sense to pay a lawyer and an accountant to create this setup for yourself... maybe a startup idea? :)

deleted 5y ago

[deleted]

waterglassFull 5y ago

If you are fortunate enough to be in a position where you're earning enough to pay 40% tax then great for you! Paying tax is good for society, what's not great is companies avoiding it. The latter doesn't negate the former.

callamdelaney 5y ago
Oh, it's great that it's great society. Sucks pretty hard for him though.
- um_ya 5y ago
  "Pay your fair share". I cringe every time I hear this from people. Rich people pay WAY more than what they get back from the gov.
  - dariosalvi78 5y ago
    well, the idea is that the richer you are the more you contribute to society.
    - callamdelaney 5y ago
      Wouldn’t we achieve the same with a flat tax rate?
  - three14 5y ago
    Rich people don't usually get handouts from the government, but they get something more valuable - a social order, enforced by the government, that allows them to be rich. Suppose you were rich, but you lived in a place where rich people tended to get kidnapped and held for ransom - being rich wouldn't be quite as good of a deal. The social order disproportionately benefits the rich, so they should pay more to keep it going.
  - dragonwriter 5y ago
    > Rich people pay WAY more than what they get back from the gov. Only if you ignore the role of the government in defining and enforcing (violently, where necessary) property rights, which is what allows “rich people” —particularly rich through various forms of intangible, indirect, and directly-physical-but-beyond-immediate-personal-supervision property — to, as such, even exist.
  - medvezhenok 5y ago
    Rich people can extract value - i.e. park $1B into S&P500, and reap $40M in returns every year. How much work did they do to do the above? Zero (if they inherited 1B). How much are they taxed on it? 20 percent of $40M = $8M. Where as someone who worked 40 hours a week for the whole year and made $200K gets taxed... exact same 20% effective (federal), and another ~15% (employer+employee) in FICA. Part of the value of paying taxes is to ensure that the people who's labor you're extracting value from don't rebel and rise up against you.
TheGigaChad 5y ago
Die commie rat.

neilwilson 5y ago

"What can we do?" Well you can look at it in the round and realise that your income is similarly higher than it otherwise would be because government spent money into the economy that it is now extracting as tax. Moving the tax around doesn't avoid you paying it. It just gets rolled into the price of what you buy instead. That's because in aggregate corporate costs including taxation are a component of final consumption expenditure. While there are fewer jobs than people that want them the incidence of charges on corporations will always end up being paid by workers one way or another. That's the whole point of the 'unemployment buffer' put in place during the neoliberal era - to make sure that price changes can't be easily passed through to wage rises and thereby resolve the distributional conflict in favour of capital.

maccard 5y ago

> I have to pay 40% of my income as income tax. So do all the engineers, PMs, etc working at Microsoft.

KMag 5y ago
All of the MS engineers in the U.S. have an effective income tax rate of 40%, not a marginal tax rate of 40%? Assuming Washington State takes about 10% marginal tax... that's about half their income coming in above the 32% federal tax bracket which starts at $163k. Is a starting salary for an engineer at Microsoft really around $320,000/yr.? If they're really pulling in that, one would hope they'd have some long-term capital gains, which would further pull down their effective income tax rate.
- maccard 5y ago
  Very few people _anywhere_ are paying a 40% effective tax rate. I wasn't aware of the Washington state tax rate though.
  - KMag 5y ago
    I'm not sure what it is in Washington. In New York 10 years ago, my marginal tax rate to the state was around 10%.
seanmcdirmid 5y ago
Many of those are in Washington state, which doesn’t have an income tax. It is almost impossible to get to 40% with federal income taxes and payroll alone. They are probably maxing out their 401k as well as various other pre tax contributions that can be made.
- maccard 5y ago
  I didn't know Washington state had no income tax! If you count 401k/marriage allowances, personal allowances etc, then there are very very few people anywhere paying 40% income tax. In Ireland, you're not paying 40% until you make 120k which is a very small amount of people.

dalbasal 5y ago

>>What can we do? It's a tough question. The tendency is to react superficially: Moralizing reactions, emotional reaction, first principles takes. The way tax actually works is via accounting "standards," tax law and corporation law... across multiple jurisdictions. A thousand-detail complex , where morals, emotions and first principles are literally meaningless. Actual meaning can only be derived with scenario plans and spreadsheets. Words like "profit," "company," "revenue" and such don't have inherent meanings, in that world. They're just objects with associated rules. The pro-corporate side of this debate (debate is the wrong word) deals entirely in the latter terms. Terms that the majority of journalists and politicians can't work with. They tend to win. When the other side does consider the reality of mess, they tend to conclude radical/unrealistic conclusions like "throw everything out and start from scratch." At this point, complexity is hardened by international agreements and trade rules. IMO the actual place to start is corporation law, not tax law. If entities can own other entities, or part thereof in an endless cascade...words like "tax rate" have no meaning. Another, more radical approach is rethinking the idea of public wealth. The currently ongoing collapse of monetarism is, perhaps, an opportunity. Tax public companies x% of their shares per year. Hold, to avoid price deflation. Offload shares as part of macroeconomic/monetary policy (ie, when we run deficits), to avoid inflationary scenarios such as the current one. I would take the same approach for wealth taxes. Capital gains, property, etc. Tax x% of current market value annually, not income or realized gains. It won't be perfect, but everything gets marked to market eventually.

gruez 5y ago
>Another, more radical approach is rethinking the idea of public wealth. The currently ongoing collapse of monetarism is, perhaps, an opportunity. Tax public companies x% of their shares per year. 1. this disproportionately affects companies with higher capital requirements than lower ones. Think spacex compared to a SaaS. 2. this doesn't solve the underlying issue of moving to a jurisdiction with lower taxes. let's say US taxes 1% of shares every year, but the company offshores to bermuda. then what?
- dalbasal 5y ago
  >> disproportionately affects companies with higher capital requirements How/Why? >> underlying issue of moving to a jurisdiction with lower taxes Well... nothing simple solves this in full. However, "loophole" in this article works by attributing income from IP licensing (an internal transaction between Apple owned entities) to Ireland, which does not consider this a taxable transaction. A "share tax" would apply to the same entity that shareholders own a stake in, it doesn't try to disentangle subsidiary structures. Companies might try to list on Bermuda's stock exchange. I wouldn't discount that possibility, but it won't happen overnight.

rorykoehler 5y ago

40%? Usually that kind of rate applies to an upper progressive tax band. Where do you live?

I_am_tiberius 5y ago

Sorry but this is not a good comparison. Microsoft created many jobs which are all paying this kind of income tax. This article is about corporate tax which is tax on the company's profit.

DFHippie 5y ago

Are you sure you pay 40%? Googling around a bit to find the US income tax rates (assuming you are in the US) I found this: https://www.bankrate.com/finance/taxes/tax-brackets.aspx https://www.bankrate.com/finance/taxes/tax-brackets.aspx This is really just the first thing I looked at, but it seems to provide the desired information. The highest bracket, for income above roughly 550k, is 37%. So considering only federal income tax it is impossible to pay 40% of your income in taxes, but also the first 550k or so of your income would be taxed at lower rates.

sethammons 5y ago
Now toss on state income tax. And don’t forget about AMT (alternative minimum tax). Sure, you need a higher income to hit these thresholds, but it is not as functionally high of an income as you may think it is.
seanmcdirmid 5y ago
If you throw in state income tax and consider payroll taxes, hitting 40% isn’t that hard, if your income is 1099, hitting 40% is pretty easy.
malux85 5y ago
I’m not on the US

markus_zhang 5y ago

You can't do much under the current instituitions. The elites of United States spent huge effort these hundreds of years to make sure that 1) Their income mostly relies on the United States as a financial/military beast, and 2) Whatever ordinary people suffer from, be it high tax or flood or lightning bolts, the elites will not be affected and can safely live in areas well protected.

Cthulhu_ 5y ago

Vote for politicians that want to tax the rich. I mean this can be solved by forcing Bermuda to charge taxes for example. If they REALLY want to escalate things, Bermuda can be strongarmed into compliance - a country can put a boycott on Bermuda, like the US does with e.g. Iran and NK at the moment. Any company doing business with Bermuda then - directly or indirectly - will be in a lot of trouble. But they don't dare to take a firm stance, because the politicians that make the decisions benefit from the system. Just look at how many politicians had accounts revealed via the Panama Papers.

dariosalvi78 5y ago

I have an idea: Ireland could cut electricity, telecom, drain, rubbish collection, road access, police, firemen and health services just and only around those buildings where the company operates. Maybe they learn the value of paying taxes (or more probably not).

adolph 5y ago

Why should “we” (aka mostly other people) do something about your problem (aka HAD ENOUGH)? If the cost of getting to net Y cash inflow is X gross income where X = Y + (.66Y) then solve for X and move on, or perform the cost benefit analysis for moving to another tax jurisdiction. The solution is yours to execute.

rmah 5y ago

You can stop believing the idiocy printed by rags masquerading as newspapers. Microsoft did not even make £220B (apx $310B) revenue globally in the 2020 fiscal year, much less in one subsidiary. Their total global revenues were $143B and total global net income (aka profit) was $44. If The Guardian can't fact check the basics, how can you trust anything else they write?

boudin 5y ago

What is infuriating the fact that you pay taxes or that a company like Microsoft do not? If it's the first one I can't disagree more, I'm paying kinda the same percentage and I'm happy to do so personally. If it's the second one, I can't agree more that this is infuriating indeed.