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Steven Ballmer, the Microsoft chief executive, says that they would move some employees offshore if Congress enacts President Barack Obama’s plans to impose higher taxes on U.S. companies’ foreign profits. 'It makes U.S. jobs more expensive,' Ballmer said in an interview. 'We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.' ... 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." Obama wants to stop all of that, as he has announced. We're going to lose US jobs! Here's Microsoft as much as saying so.
They've been moving jobs overseas and bringing in foreigners to under pay them for years. I haven't talked to an American at their tech support since the 80's. They have enjoyed decades of free QA support from all their loyal techie followers and yet they want to avoid paying taxes in the country that allowed them to prosper. Does that bloated AH really think MS would have been able to grow to the size it has in India? I doubt anyone would have even heard of MS if it had started overseas. I can't believe a company that makes so much money is so opposed to paying their fair share of taxes.
Ballmer said that, while the Obama proposals would preserve expense deductions related to research and experimentation costs, the overall deduction limits for companies that defer tax on foreign profits (would raise the cost of employing U.S. workers)"
“It’s not about companies anyway; we’re talking about shareholders.”
Current US tax rules lets them defer paying rates as high as 35% on most foreign profits as long as that money remains invested overseas. Ending the incentive to keep foreign profits tax deferred, US companies should invest them in the US, but we see some would rather not.
Microsoft already has 1/3 of the employees overseas and currently them and other companies get to 'stretch' the tax rules to their advantage.
One has a choice and doesn't have to use their products.
They've been moving jobs overseas and bringing in foreigners to under pay them for years. I haven't talked to an American at their tech support since the 80's. They have enjoyed decades of free QA support from all their loyal techie followers and yet they want to avoid paying taxes in the country that allowed them to prosper. Does that bloated AH really think MS would have been able to grow to the size it has in India? I doubt anyone would have even heard of MS if it had started overseas. I can't believe a company that makes so much money is so opposed to paying their fair share of taxes.
This. Saying the proposed taxes would cause MS to move jobs overseas is like saying the taxes would cause fish to breathe water. One of Microsoft's mottos in the mid 2000s was "What jobs can we outsource overseas today?" I'm sure that's still the case.
I used to work for MS through an American company that Windows support was outsourced to up through 2002. The company had two centers, one near Seattle and the other somewhere in Utah. The company I worked for got bought out by another company that closed our center. The one in Utah was closed less than 2 years later, and all the jobs went to India. Now when you call them for support you get someone who barely speaks English reading off a card.
It seems that this (what ballmer is mentioning) is another loophole in the tax code written by the industries (im guessing here), to their advantage, now being closed. Hopefully the next broken piece of legislature that gets fixed is NAFTA.
Overall, (even with the business communities crying) this does not seem to be a bad idea.
Yeah, I never liked the idea of NAFTA and couldn't understand why Clinton signed it.
Then again, not being an economist, I'm surprised that people couldn't see that bank deregulation and the ridiculousness of McMansions and inflated housing costs wouldn't lead the way to big trouble.
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