Name: Insights: Inside Why Microsoft Raised its Own State Taxes
Uploaded: 2020-04-14
Duration: 3 min
Description: Microsoft joined with Amazon and other Washington state businesses to raise money for education.

 BRAD SMITH: What we did really in this year, another sort of event in 2019 was we decided to champion legislation that would raise business taxes. ADAM LASHINSKY: Hold on, Brad. I'm sorry. You said, Microsoft is championing raising business tax. BRAD SMITH: Yeah, I know. And it was something we did with a huge amount of thought and a little trepidation. This specific issue actually was post-secondary education opportunities. ADAM LASHINSKY: Post-secondary. BRAD SMITH: And we recognize that we have a business community in Washington state like everywhere that is critically dependent on skilled people. That come out of our universities, increasingly community colleges, other post-secondary training opportunities. And in our state as in most states, this was underfunded. And what it did is, it took one of our taxes. There is Washington state what's called a business and occupation tax. So be a no tax. Other states often have it. And the rate for services was 1.5%. It was two decades ago 1.8%. and we said, it should be raised back to 1.8% to raise the money for this. But the other thing that we did, and this is was the interesting discussion. It was really Amy Hood and me inside Microsoft, we said look, if we're going to raise this, if we're going to argue that lawyers, and dentists, and small businesses pay this. We better raise our taxes more than theirs. And so what we proposed and what was adopted was a graduated rate for most businesses it goes up to 1.8% for a certain category of companies with revenue up to $100 billion per year. Say 200-- guess it's $25 billion to $100 billion, it goes to 2%. Above $100 billion a year, there's two companies in Washington state that would hit this. Microsoft and Amazon, it goes up to 2.5% with a minimum and a max. And I called her out. I called other business leaders. And I said, hey, we're thinking about this. What do you think? And buy and large, people said you know we get. It it's a good idea, and especially with you are willing to pay a higher rate than anybody else. We get behind this and it passed. ADAM LASHINSKY: And was Amazon supportive of this? BRAD SMITH: Amazon became supportive of it. I know it was terrific. I mean, they had to work through what it meant for them. And you know, we were at the forefront of the idea, and whenever you're the second person to get the idea, you're going to be a little more cautious. They did, they were fantastic in Olympia. And I don't think we would have done it without their support as well. I don't think it would have gotten through. 

Insights: Inside Why Microsoft Raised its Own State Taxes

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Microsoft joined with other businesses to fund education.

Why Microsoft Raised its Own State Taxes

Microsoft joined with Amazon and other Washington state businesses to raise money for education.

what we did really? Well, in this year, another sort of event in 2019 was we decided to champion legislation that would raise business taxes. Uh, hold on. I'm sorry. You said Microsoft is championing raising business. Yeah, I know. And it was something we did with a huge amount of thought and a little trepidation. The specific issue actually was postsecondary education opportunities post second. And we recognize that we have a business community in Washington state like everywhere that is critically dependent on skilled people that come out of our universities. Increasingly community colleges, other postsecondary training opportunities. And in our state, as in most states, this was underfunded. And what it did is it took one of our taxes. There is a Washington state was called the business and occupation tax being no tax. Other states often have it, and the rate for service is was 1.5%. It was two decades ago, 1.8% and we said it should be raised back to 1.8% to raise the money for this. But the other thing that we did and this is, was interesting discussion. It was really a me Hood and me inside Microsoft. We said, Look, if we're gonna raise this, if we're gonna argue that lawyers and dentists and small businesses pay this, we better raise our taxes more than theirs on. So what we proposed in what was adopted was a graduated rate for most businesses. That goes up to 1.8% for a certain category of companies with revenue up to $100 billion per year, say 200. Uh, guess it's 25 billion to 100 billion. It goes to 2% above $100 billion a year. There's two companies in Washington state that would hit this Microsoft and Amazon. It goes up to 2.5% with a minimum and a max. And and I called around the I called other business leaders and I said, Hey, we're thinking about this. What do you think? Uh, and you, by and large people said, you know, we get it. It's a good idea, and especially with you all willing Thio pay a higher rate than anybody else. We get behind this and it passed and was Amazon supportive of the Amazon, became support above it. I know It was terrific. I mean, they they they had to work through what it meant for them. And, uh, we we're at the forefront of the idea. And whenever you're the second person to get the idea, you're gonna be a little more cautious. They were fantastic in Olympia, and I don't think we would have done it without their support as well. I don't think it would have gotten through.