Microsoft’s $29.6 billion scam: Tech giant leads the way in tax-avoiding innovation
http://www.salon.com/2014/08/28/microsofts_29_6_billion_scam_tech_giant_leads_the_way_in_tax_avoiding_innovation/
Reading companies annual reports to the Securities and Exchange Commission is a reliable cure for insomnia. Every so often, though, there is a significant revelation in the paperwork. This year, one of the most important revelations came from Microsofts filings, which spotlighted how the tax code allows corporations to enjoy the benefits of American citizenship yet avoid paying U.S. taxes.
According to the SEC documents, the company is sitting on almost $29.6 billion it would owe in U.S. taxes if it repatriated the $92.9 billion of earnings it is keeping offshore. That amount of money represents a significant spike from prior years.
To put this in perspective, the levies the company would owe amount to almost the entire two-year operating budget of the companys home state of Washington.
The disclosure in Microsofts SEC filing lands amid an intensifying debate over the fairness of U.S.-based multinational corporations using offshore subsidiaries to avoid paying American taxes. Such maneuvers although often legal threaten to significantly reduce U.S. corporate tax receipts during an era marked by government budget deficits.
Microsoft has not formally declared itself a subsidiary of a foreign company, so the firm has not technically engaged in the so-called inversion scheme that President Obama and Democrats have lately been criticizing. However, according to a 2012 U.S. Senate investigation, the company has in recent years used its offshore subsidiaries to substantially reduce its tax bills.