Microsoft is the most recent member of the get-your-money-out-of-the-country club. The technology giant is facing scrutiny amid findings that it is housing nearly $92 billion offshore in an effort to avoid as much as $29 billion in US taxes.
Annual filings with the Securities and Exchange Commission exposed that the money is lurking in offshore accounts. Microsoft claims however that has simply “not provided deferred U.S. income taxes because the money was made by “non-U.S. subsidiaries and will be “reinvested outside the U.S,” according to David Sirota.
When pressed on the issue by the International Business Times, IBT was told to refer to testimony given in 2012 where Microsoft gave the normal corporate tax runaround.
“Microsoft’s tax results follow from its business, which is fundamentally a global business that requires us to operate in foreign markets in order to compete and grow. In conducting our business at home and abroad, we abide by U.S. and foreign tax laws as written. That is not to say that the rules cannot be improved — to the contrary, we believe they can and should be.”
Microsoft is right to point the finger back to congress and call for the laws to be improved. Tax evasion loopholes exist and it is the responsibility of congress to close them and of Obama to enforce them. However, the president has consistently done little more than issue stern statements to business caught violating the tenets of what many call “economic patriotism.”
“I don’t care if it’s legal; it’s wrong,” Obama has said.
But Microsoft isn’t the angel simply playing by the rules that someone else wrote either. As Sen. Carl Levin has pointed out, “Microsoft U.S. avoids U.S. taxes on 47 cents of each dollar of sales revenue it receives from selling its own products right here in this country. The product is developed here. It is sold here, to customers here. And yet Microsoft pays no taxes here on nearly half the income.”
So whose fault is the missing $29 billion in offshore, unpaid taxes? The pot or the kettle?