Microsoft's Sacred Cash CowIn early December, The New York Times published a series on corporate tax incentives across the country. They also provided a state by state reporting view online (here’s the link for Washington State’s corporate tax incentives).

Washington state grants $2.35 billion to corporations annually (about 15 cents of every dollar of the budget). Not surprisingly, Microsoft tops the list of beneficiaries with $305 million in incentives between 2004 – 2010. That’s just what’s on the books – it doesn’t include lobbying and its unenforced Nevada tax dodge (1998 – 2010) which cost the state approximately $4.37 billion in tax revenue from the software maker – see Dummies Guide to Microsoft’s Nevada Tax Dodge.

Partly as a result of these incentives, Washington State faces a “projected $900 million deficit for the next two-year budget ending in mid-2015, not counting money lawmakers will need to spend to improve funding for education as directed by the state Supreme Court earlier this year.”

The New York Times report found that these tax incentives were commonplace around the country with little analysis as to their overall effectiveness:

[blockquote align=”center”]A Times investigation has examined and tallied thousands of local incentives granted nationwide and has found that states, counties and cities are giving up more than $80 billion each year to companies. The beneficiaries come from virtually every corner of the corporate world, encompassing oil and coal conglomerates, technology and entertainment companies, banks and big-box retail chains. The cost of the awards is certainly far higher. A full accounting, The Times discovered, is not possible because the incentives are granted by thousands of government agencies and officials, and many do not know the value of all their awards. Nor do they know if the money was worth it because they rarely track how many jobs are created. Even where officials do track incentives, they acknowledge that it is impossible to know whether the jobs would have been created without the aid. [/blockquote]

I don’t believe Washington State has a budget problem; more accurately, I consider it a tax fairness problem. Microsoft’s recorded more than $579 billion in revenue since 1998 but somehow we still don’t have enough money in this state to properly educate our children or maintain our roads.

Posted by Jeff Reifman

Jeff is a technology consultant based in the Pacific Northwest.

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