How Microsoft's Tax Dodge Led to $4 billion K-12 and Higher Education Cuts

Jeff Reifman on the Microsoft Tax Dodge

Apple's not the only company to save billions in taxes through Nevada as The New York Times reported yesterday. Here's how Microsoft's saved $4.37 billion in tax payments to Washington State and how it's led indirectly to $4 billion in K-12 and Higher Education cuts since 2008. 18% of University of Washington freshman are now foreigners (because they pay more) up from 2% six years ago. Washington State ranks 47th nationally in 18-24 yo college enrollment and 48th in K-12 class size. This hasn't stopped the architect of the company's Nevada tax dodge from writing in The Seattle Times: 'it's [Washington] state's paramount duty to provide for the public education of all children. Unfortunately, steady declines in public resources now threaten our ability to live up to that commitment.' Yes, indeed.

Seattle City Initiative Seeks to Make Net Neutrality Law

I am lead organizer behind Seattle Initiative Measure 103 http://www.i103.org which will end corporate personhood in Seattle and elevate the rights of residents above corporate rights. 

Three things you can do right now:

1) Join the Measure 103 Facebook page or sign up for our mailing list.

2) Collect petition signatures from your friends and family

3) RSVP for our Kickoff Party March 29th in the University District

What Measure 103 will do in Seattle:

• End corporate personhood and limit corporate rights
• Ban corporate spending on elections
• Ban corporate lobbying except in public forums
• Close the revolving door of employment  between elected officials and large corporations
• Provide citizen oversight of the Seattle Police Department
• Provide constitutional rights for workers
• Provide neighborhoods the right to approve major zoning changes
• Provide rights for nature
• Provide equal access to a free and open Internet, known as network neutrality

Our efforts in Seattle are part of an emerging statewide and national movement to place peoples' rights above corporate rights. 

Learn more about Measure 103

When it comes to education in Washington State, Microsoft is the problem...

Here's my penultimate summary of how Governor Gregoire, the legislature, the courts and The Seattle Times have enabled Microsoft's hypocritical stance on education and tax dodging to damage our budget and our educational system ... new updates including audio clip of Microsoft's Brad Smith acknowledging the Nevada tax dodge:

Full story at Microsoft Tax Dodge

Microsoft Told to Put Up or Shut Up on Nevada Tax Dodge Issue

Beginning with the publication of Citizen Microsoft in Seattle Weekly in 2004, I've reported that Microsoft used its Nevada office to avoid payment of the state's Royalty Tax from 1998 - 2010. I've blogged that the amount of the tax dodge has likely exceeded $1.07 billion (not including penalties). 

Last week, after John Burbank, Executive Director of the Economic Opportunity Institute, wrote an editorial condemning the company's hypocritical record of tax dodging while advocating for more education funding, Jeffrey Reading, Microsoft's Senior PR Manager wrote The Herald to refute the claims Burbank made (Burbank based his article on my reporting):

"Mr. Burbank does not include sourcing to support his claims regarding Microsoft’s Nevada licensing, which is part of a very complicated piece of state tax law. Much of the information regarding this issue is misinformation primarily spread by a blogger, and no state official has ever provided any factual data supporting his claims."

I stand behind my research and all of my claims. If Microsoft wishes to prove that it paid Washington State Royalty Taxes during the years 1998 - 2010, it should disclose its worldwide licensing revenue and its Royalty Tax payments for this time period. It would be quite simple for the company to provide these two sets of numbers and would put the issue to rest once and for all (as I have done here). 

Read: To Refute Claims, Microsoft Should Disclose Its Royalty Tax Payments

Now for what really matters...

I've posted some personal thoughts on today's national elections up at Tales of Change: Now for what really matters... It's reflective in part of watching Microsoft get its way in Washington State in this last legislative session. Hope you'll take a look.

Cyber-Security Czar Howard A. Schmidt Needs Help with His Website

 Apparently the corporate website for Howard A. Schmidt, the new Cyber Security Czar, remains under construction (via Seattle Weekly) . While the Washington Post reports "Schmidt's resume reflects experience in the private sector, law enforcement and government," his website would not get him in the door for an interview in most private sector IT firms. 

The site is powered by 1&1's Website Builder but unfinished. While many of us own domains that we don't run completed sites on, this appears to be the home page for his R&H Security Consulting LLC. He was previously hired by the Bush Administration as an advisor on cyber security issues.

Seattle, show your support for Mike McGinn on Facebook

Add Mike McGinn to your Facebook profile photo via The Needle's profile customization feature:

As it gets closer, it's just not how I expected it to be...

the end of the Bush era. We've been waiting for this day for so long, but the thrill isn't rising yet at all. I'm calm, perhaps distracted by my fun new work project - but, I expect this to change soon... The end of Guantanamo, implicit corruption in government and the beginning of the Obama administration (even if he's appointed centrists), the first African American presidency... I am looking forward to the Northwest's inaugural balls!

What percent of volunteer hours go into fundraising?

I often wonder what percent of volunteer and staff hours go back into fundraising efforts for nonprofit organizations. Rather than progressive tax systems properly funding our overall societal needs and efficiently regulating corporate harms, we have a huge network of nonprofit organizations which attempt to fill the gap.

I received this handwritten letter from Sierra Club President Carl Pope - I'm assuming it's written by a volunteer or staff, asking me for exactly $2,675 (not sure how they came up with that number). They were nice enough though to include a self addressed stamped envelope. Click the images to enlarge them.

When I see stuff like this, it just makes me wonder how we ended up here. This seems like a very inefficient system. I imagine that there are tremendous inefficiencies in the nonprofit model that's arisen in our society to make up for lack of government services and protections.

The SEC's War on Trees

I received these five letter packages for some AIG shareholder settlement from 2005. I imagine I'm bound to get even more bundles after the shakeout from this year's AIG government bailout has its impact. I often get these long documents from companies I own stock in. There seems to be no way to tell them to stop - and they don't seem to filter on duplicate names. My broker told me it's an SEC requirement.
 
In the future, I'd rather the SEC actually regulate business into following the law rather than relying on class action lawsuits which take longer, result in huge payouts to law firms and which result in many trees being destroyed so that the average shareholder can receive multiple copies of the near incomprehensible documents.