Microsoft isn’t happy about a new tax on companies’ foreign profits
Microsoft Corp. Chief Executive Officer Steven Ballmer said the world’s largest software company would move some employees offshore if Congress enacts plans to impose higher taxes on U.S. companies’ foreign profits.
“It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”
The plan seeks to help raise tax revenue and balance the budget by rolling back $ 190B USD in tax deferral for offshore companies over the next decade. Microsoft is not the first to oppose the measure—the National Foreign Trade Council, the U.S. Chamber of Commerce and the Business Roundtable are among the numerous others to voice their disapproval.
Symantec Corp. and some smaller companies such as privately held Bentley Systems, an Exton, Pennsylvania-based maker of engineering software, carry out similar practices and are similarly opposed to the measure. Symantec says it’s frustrated with being called a tax cheat. Symantec Chairman John Thompson adds, “It is a little bit ironic that most of our most significant trading partners and partners globally have taken the tack that they’ll reduce corporate tax rates to stimulate economic growth and not raise corporate tax rates.”
Mr. Ballmer, perhaps the most outspoken critic, did acknowledge that the proposal preserved research and experimentation cost tax breaks. He warned, though, that the cuts to foreign exemptions would raise the cost of Microsoft’s 56,552 U.S. employees. He says this could necessitate moving them overseas
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Microsoft Warns Of Tax Law Consequences, Jun 5, 2009