Jeff Reifman

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 Times Hits Amazon Hard, Gives Microsoft a Pass

I've had personal meetings with The Seattle Times' Executive Editor David Boardman and his journalists about Microsoft's $1.51 billion dollar Nevada tax dodge. Despite David's spoken intent to cover the issue, the paper never has.

So, I thought it was a bit surprising that The Times hit Amazon with a front page article on its poor record of corporate giving in Seattle. The article ran on April Fools Day - so perhaps this was The Seattle Times treating its readers for fools.

But seriously, doesn't paying your taxes come before corporate giving? Isn't tax dodging a bigger sin than failing to make donations to your community?

When newspapers fail to cover the problems in our tax system and the former-Microsoft employee turned legislator that contributes to the problem, then the region's safety net falls apart and we depend more heavily on corporate donations. But surely The Times should do a better job of covering this issue first.

Shame on The Seattle Times. Shame on Microsoft.

 

 

Mint.com Goes Down All Mad Men Style

South by Southwest Highlights

If you're persistent enough, South by Southwest can offer some truly intimate experiences that aren't easy to find elsewhere. I wanted to share some of the highlights from my first time at the festival.

What do I mean by intimate? Thursday morning I was woken up by a phone call at 5:30 am ... it was an anonymous woman from another room in the hotel wanting to engage me in phone sex. Later that day, after being turned away from Mike Birbiglia's Sleepwalk with Me, I ran over to nearby Gayby (clever & funny - see it) and got to talk and sit next to Australian sex worker, Rachel Wotton, the subject of the festival documentary Scarlet Road. Wotton provides sex work for the disabled in Australia - a truly powerful and culture-bending practice. Wotton preaches decriminilization of sex work and touch and compassion for the most vulnerable among us. On my last day, I happened to walk across a show of one of my favorite artists, Glen Hansard. I was right up front as he played a 30 minute set in a small bar with Clarence Clemmon's nephew Jake. Hansard opened acoustically with Leave.

 

In general, you can get closer to artists at SxSw than in many of today's larger venues. I was 10 feet from the pit for Bruce Springsteen, 40 feet from the stage for Fiona Apple (sound was unfortunately awful) and 20 feet from up and coming star Kimbra (check out her amazing video with Gotye, Somebody I Used to Know). I also got to see a live podcast of You Made It Weird with Pete Holmes and comedy legend Judd Apatow. 

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The difference in energy and vigor between the vocals of Kimbra and Hansard vs. Apple & Springsteen was notable. Here's a clip of Kimbra in action:

 

Seattle radio station KEXP offered weeklong live music at Lance Armstrong's bike shop, Mellow Johnnies. You could walk right in and catch a show (Choir of Young Believer's pictured below) while they fixed your flat. All seven yellow jersey's are hanging on the wall nearby.

My week actually began in an amazing leadership training workshop put on by Yogi's Seane Corn, Hala Khouri and Suzanne Sterling which culminated in part on the roof of Austin's Arthouse in a SxSw yoga class. I'll be writing more later about their organization and mission, Off the Mat Into the World.

I found the people in Austin to be quite friendly (definitely different than Seattle-ites, fairly or unfairly attributed to be cold). The TexMex food was mostly great and usually offered a variety of vegetarian options e.g. the Fried Avocado Tacos at Torchy's were probably the most exotic thing I tried. I highly recommend whatever crack the vegans are putting in the Freeto Burrito in East Austin's Vegan Yacht trailer. And, Austin offers some pretty decent coffee to keep a traveling Northwesterner from losing it. Caffe Medici in Austin was good - and I even coincidentally ran into a former Seattle barista there.

Aside from the scheduled events, there is an abundance of music everywhere in Austin during SxSw and it wonderfully bleeds out on the streets...

If I go again, I think I'll try to avoid staying far from town as the R&R Shuttle just wasn't very convenient and my northern digs a bit isolated. The days and nights grew pretty long, leaving the hotel in the morning and not coming back til late at night. Going back mid-day to change, rest or retrieve a laptop was just not a good option.

The density of industry folks at SxSw interactive is amazing. You can meet nearly anyone (including one of your ex-girlfriend's "notorious" ex-boyfriends - pictured below). The new Highlight mobile app even pinged me when my brother's boss was nearby. One of my favorite interactive sessions was How to Misuse the Internet and Make People Love You, which featured Oprah's 9,000 penis #fail and the awe-inspiring Pretty Color's blog. I can't wait to see the Pinterest Pretty Colors mashup.

 

Comcast Increases Broadband Rates 50% for Seattle Customers

Open letter to the Seattle City Council about Comcast's 50% broadband price hike

Microsoft's Tax Dodging Killing Education in Washington State

How Governor Gregoire, the legislature, the courts and The Seattle Times have enabled Microsoft's hypocritical stance on education and tax dodging to lead to $693 million in cuts to Washington State's education system:

    When John Burbank, a columnist in the Everett Herald, wrote that Microsoft’s unpaid royalty taxes “could be funding high-quality schools for Washington's children,” the company demanded a correction from the paper but refuses to release data that would prove its position. Listen to Brad Smith acknowledge the company's Nevada tax practices in this clip from our 2004 interview for Citizen Microsoft (Seattle Weekly).

Full story at Microsoft Tax Dodge

Jeff Harris' Self Portrait Project - Time

I hope everyone watches this video of my friend Jeff Harris' ongoing (currently 13 year) self-portrait project.

The Complete Mac - How I get the most from the Apple Mac iPhone iPad Ecosystem

This is a bit of a work in progress ... but check out The Complete Mac, which provides an easily browsable summary of all the products and accessories I recommend for Mac, iPhone and iPad users. Enjoy! 

To Refute Claims, Microsoft Should Disclose Its Royalty Tax Payments

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 the full post

 

John Burbank Tells Legislature to Target Microsoft

In his Everett Herald column today, John Burbank, Executive Director of the Economic Opportunity Institute, zeroes in on Microsoft's tax dodge and its harmful effects on the state's educational system. Read more