|Home » Learning Curve » Red Hat Diaries
Philanthropy vs Hypocrisy
Bringing it all back home.
Philanthropy and hypocrisy: two Greek words.
Philanthropy is literally the love of people. Today it's used to describe people who do a lot for other people.
Hypocrisy was used to describe actors or 'pretenders'. Today it's used to describe people who attest to one thing but actually align with another diametrically opposite.
Creative capitalism is also a great term.
Bill Gates was recently a speaker at the World Economic Forum in Davos. There he was given the royal treatment as one of the great innovators of his time and there he read 'prepared remarks' about - amongst other things - 'creative capitalism'.
How define 'creative capitalism'? Jeff Reifman thinks he knows.
'When I heard Bill Gates invoked the phrase 'creative capitalism' at last month's World Economic Forum it reminded me how Microsoft avoid paying taxes on Washington made software by selling through Nevada', wrote Reifman.
Reifman estimates the M$ 'licence and operations office' in Reno helped the Washington state corporation skip more than $528 million in state taxes the past eleven years.
'I estimate for the past 11 years Microsoft used this practice to save $48 million annually, cumulatively more than half a billion dollars. If the Washington legislature had not reduced the software tax rate from 1.5% to 0.484% in 1998 Microsoft's tax savings would be more than triple that. Software licence codes are unique in that they generate hundreds of millions of dollars in revenue by unlocking hundreds of thousands of copies of software for a PC manufacturer. While shipping a DVD with a replication code might not attract the same kind of scrutiny trucking timber products or delivering an airplane does Microsoft accomplish an astonishing sleight of hand by recording the licensing revenue in Nevada from products made in Washington.'
Quid pro Quo
To which the critics might answer 'OK so Microsoft can move all operations to Nevada and where be Washington state then?'
But the retort is obvious: above and beyond it still being a refined form of tax evasion Microsoft simply can't move to Nevada because Nevada can't support them. A Slashdot poster puts it as follows.
'They're in Redmond because Redmond has the infastructure to support them - the telecommunications, roadways, and educational system to supply those tens of thousands of employees. Nevada by contrast cannot supply these. Sorry Nevada - you're a great state, but your infastructure is horrid.'
'There's a reason why top performing companies are found in areas with the highest tax brackets. Territories that tax for the needed infrastructure are the ones that can support businesses of Microsoft's size.'
Put another way: Washington state contributed the 'quo' so Bill Gates could set up and run operations; but then when it was time for Gates to pay the state back he reneged and took his 'quid' to Reno instead - more than half a billion of it.
Convicted monopolist and now tax evader: anyone getting 'charity' from Gates can't feel it's 'blood money' but the distinction for those involved professionally in IT is thin.
Knighthoods, PhDs - and now supposedly 'philanthropy'. But the wealthy who are desperate to be seen as practitioners of 'philanthropy' are more often seen as practitioners of 'hypocrisy'. And history's already formulated its opinion of Bill Gates.
Bill Gates is the most prominent person of the 20th century. He is zero-made man, who made career from a meduim class to the reachest man on planet. And his difference from other 20th century zero-made men (like Hitler, Stalin, bin Landen, Berezovsky, ect) is that he never killed anyone and never stealed anything. I think he is really exemplary person.
- 'BaulParry' at YouTube
Crosscut: Microsoft's $528 million Washington tax break/p>