In this era of corporations using blackmail and threats to win sweetheart tax deals, Microsoft is making waves at the state Capitol in Olympia with a far more unusual demand.
Tax us more, the company is telling lawmakers.
“I don’t know if I’ve heard of this happening before; it’s not ringing any bells,” said Rep. Drew Hansen, D-Bainbridge Island, when I asked if a big business has ever come to the state Legislature proposing a sizable tax on itself to help pay for a government program.
“I have to say, I didn’t expect it at all,” echoed Rep. Gerry Pollet, D-Seattle, who has warred with Microsoft before, and lost, over that company’s extensive state tax breaks. “All of a sudden they’re down here offering to pay for the obvious needs of the state.”
The bill, introduced Monday by Hansen and co-sponsored by Pollet among others, is this year’s big push in higher education. It would pour about a billion dollars over the next four years into a “workforce education account,” to be spent on more financial aid as well as more degree slots in high-demand subjects such as computer science, engineering and nursing.
Nothing too novel about that: State higher ed and business leaders have been clamoring for something like this for years.
But when the talk turned to how to pay for it, everybody usually ran out of the room.
The premise now is to put a surcharge on businesses that benefit the most from a highly skilled workforce. That means high-tech of course, as well as professional services firms.
“Our model is the old apprenticeship programs used by electricians and plumbers,” Hansen said.
The bill proposes increasing the state business and occupation tax by 20 percent on about 40 categories of technical services, such as telecom, engineering, medical and finance. And by 33 percent on tech firms with more than $25 billion in annual revenue.
But here’s where this goes off the charts, into politically unheard-of territory. It mandates a top rate, a whopping 67 percent business tax increase, for those “advanced computing businesses” with “worldwide gross revenue of more than one hundred billion dollars” per year.
There are only two businesses headquartered here that fit that rarefied description. And one of them, Microsoft, is the tax’s biggest booster.
“Let’s ask the largest companies in the tech sector, which are the largest employers of high-skilled talent, to do a bit more,” Microsoft President Brad Smith wrote in a recent Op-Ed in The Seattle Times about this idea.
Say what? No one in corporate America ever says “tax me, tax me first.” Let alone 67 percent more.
I don’t know what’s gotten into Microsoft lately. Remember when it was the Death Star, monopolistically glowering over technopolis and threatening to cut off the air supply of competitors and regulators alike? Now it’s all grown up, quietly adding to its Redmond campus like a homebody and offering to help out its neighbors, such as with a $500 million affordable housing fund announced in January.
Sure these initiatives are partly self-serving, as they’re focused on two of Microsoft’s biggest needs (trained, qualified employees, and places for them to live). State business taxes also are a relatively minor part of the company’s vast balance sheet.
But that other company that would also be most on the hook? Apparently it isn’t so thrilled to have been volunteered for civic duty by one of its chief rivals.
“Amazon was surprised to be included in such a public ‘hey, let’s do this’ by Microsoft,” said Rep. Gael Tarleton, D-Seattle, who said she heard that lament directly from an Amazon lobbyist.
Added Pollet: “Amazon has groused in meetings down here that Microsoft is doing this mostly as a way of making Amazon look bad.”
Well, I’ll be damned: A corporation outflanking the competition not by threatening to move or fleecing the taxpayers for subsidies, but by doing good! What in the world will become of us if that catches on?
Well played, Microsoft — for your company, and for the state. Your move, Amazon.