Beta
×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Movable Clouds Migrate To Chase Tax Breaks

Soulskill posted more than 5 years ago | from the overcast-overcost dept.

The Internet 151

1sockchuck writes "State legislators have been offering huge tax incentives to attract data center projects from cloud-builders. But what happens if the political climate changes and the tax break disappears? If you're Microsoft, you can just take your cloud and move it someplace else. The infrastructure for the Windows Azure platform is being migrated out of a facility in central Washington after the state ruled that data centers no longer qualify for a tax exemption on equipment. Mike Manos, a key player in site selection for many major data centers, predicts that future cloud platforms will move often to chase lower taxes or cheaper power."

Sorry! There are no comments related to the filter you selected.

Corporations externalize costs (4, Informative)

Maxo-Texas (864189) | more than 5 years ago | (#28996501)

It's what they do.

the Corporate structure was created to benefit society (just like copyright).

however, they have become extremely adept at hiding their true cost by externalizing costs to the rest of society.

I.e. health care for Walmart, Security for Oil Companies (if they had to pay $3 trillion to defend their oil directly-- how much would oil cost per barrel-- that true cost is hidden in our taxes), etc.

Cloud computing is doing nothing different in this regard.

We pay for the power setup, the roads, the police force-- they pay none of these costs. So whatever cloud computing's true costs are remain hidden.

Never make a deal with management or a corporation that involves cost to you today in return for profit in the future-- they will always renege at that point (be it pensions, promised future taxes or jobs, etc.).

Re:Corporations externalize costs (2, Insightful)

XanC (644172) | more than 5 years ago | (#28996597)

Not that I am at ALL a fan of these sweetheart deals, but isn't it the government that's reneging here, not the corporation?

Re:Corporations externalize costs (2, Informative)

earnest murderer (888716) | more than 5 years ago | (#28996773)

The courts ruled that the tax breaks did not apply to this facility. It's mostly just a case of posturing after an attempt to exploit a loophole that was opened for another project. Microsoft pays almost nothing to Washington state relative to their revenue, which is fine as Olympia has invited this kind of relationship. They employ a lot of people, and really are used to getting what they want from the state.

However, I don't think this action isn't even so much about the taxes on the site as much as letting our legislators know they're ready to leave wholesale as soon as it suits them.

Re:Corporations externalize costs (1)

earnest murderer (888716) | more than 5 years ago | (#28996651)

I would only add that the weirdest part is there is a contingent of people caught under the wheel that will vociferously defend the right of the corporation/government to grind your bones to make their bread.

I suppose some people must have structure, even if it is wholly self destructive.

I'm not anti-corporation, but corruption has reversed the role of corporations as a tool of the people.

Re:Corporations externalize costs (1)

Toonol (1057698) | more than 5 years ago | (#28996955)

Corporations can and often are corrupt, so I'm not defending them; I have all sorts of issues with the legal fictions surrounding corporate rights.

But still, it is moral clarity, not weakness or foolishness, that would lead somebody to defend the right of someone else even though it's detrimental to themselves. It's a good thing that I support the right of somebody to compete with me, even though that takes away my sales; the right of an employer to fire me, even though it might hurt me. The right of somebody to criticize me, even though that may hurt me.

It may suck that a corporation can move. But it might still be wrong to forbid it from moving.

Re:Corporations externalize costs (1)

earnest murderer (888716) | more than 5 years ago | (#28997445)

A corporation is not a person. I think you are reading a whole lot of inaccurate data into what I wrote.

I have no idea how you even get forbiddance out of what I post.

Re:Corporations externalize costs (1)

maharb (1534501) | more than 5 years ago | (#28999319)

Corporations are groups of people. They are not mythical evil structures that are born to kill babies, they are legal entities that represent a group of real human beings just like you.

Re:Corporations externalize costs (1, Informative)

Anonymous Coward | more than 5 years ago | (#28996783)

The corporate structure was not created to benefit society. It was created to protect the corporate officers from liability and maximize profit.

And copyright does not benefit society, it degrades it. (A good book to read on copyrights and other IP related matters would be Boldrin and Levine's Against Intellectual Monopoly.)

Corporations pay taxes for the "services" you describe. But really, it's hard to call it a service because with any service you have a choice to subscribe to it or not, with taxation, there is no choice. If you don't pay, you get fined and possibly even receive jail time. Government services are monopolies. As with any monopoly, shortages happen, service is bad and prices are out of wack. The only difference is that, since it is government, you have no recourse.

If those services didn't exist and there were no taxes to pay for them, you'd see other corporations and individuals taking up the slacks. Security services, private arbitration courts, irrigation, power generation, distribution, etc would all be taken care of by people that see a need and fill it. The major difference would be that it would be a voluntary choice based on private contracts. Only the people that actually wanted the service would pay, those that didn't use it or didn't want it would be free of the expense. (Most can imagine water and power as private entities, but roads and security is harder because they've been raised to believe in a monopolistic government service. See Walter Block's The Privatization of Roads and Highways, for how those services would work and The Machinery of Freedom by David Friedman for how private defense agencies would work.)

As far as making deals goes, make as many as you want. For every reneged deal, there are thousands that went through just fine. The overwhelming majority of companies that exist today exist because they don't screw people. It's only a small criminal group that causes harm and gets the most press. These are the ones that commit fraud (renege on a contract) or use use government regulation to prevent competition from occurring. These are the Enrons, the Goldmans Sachs, the Blackwaters (Xee,) the GM's of the world-- true ciminals.

The cloud-builders are correct to leave. If the government is eating too much into their livelihood, people vote with their feet. History has shown this pretty regularly.

Re:Corporations externalize costs (5, Insightful)

MightyYar (622222) | more than 5 years ago | (#28996891)

It was created to protect the corporate officers from liability

Which in turn benefits society. Who in their right mind would make a commercial aircraft if they weren't shielded from liability?

Re:Corporations externalize costs (2, Informative)

plnix0 (807376) | more than 5 years ago | (#28997157)

Someone who is confident that the aircraft will work.

Re:Corporations externalize costs (1)

turbidostato (878842) | more than 5 years ago | (#28999415)

"Someone who is confident that the aircraft will work."

And doesn't find anything with a higher short-time benefit return.

And that's exactly the point: under such circumnstances nobody would build aircrafts if they could manage mom-n-pop's stores at better short-range profits.

Re:Corporations externalize costs (0)

Anonymous Coward | more than 5 years ago | (#28997331)

I buy insurance when I'm concerned about liability.

Re:Corporations externalize costs (0)

Anonymous Coward | more than 5 years ago | (#28997531)

I buy insurance when I'm concerned about liability.

That's sort of the point. If CEOs were directly liable then they would just demand that the company pay for their insurance. At least now we cut out the insurance company as the middle man: The company is liable for the officers' misdeeds, it is their insurer. Make it an insurance company instead and you haven't made any progress toward CEO accountability, but you have added a significant cost to every legitimate company's operations by requiring them to insure their officers. This adds significant costs to the upstanding companies whose officers won't commit any malfeasance while pushing off the therapeutic bankruptcies of mismanaged companies.

Re:Corporations externalize costs (1)

aristotle-dude (626586) | more than 5 years ago | (#28996933)

And copyright does not benefit society, it degrades it. (A good book to read on copyrights and other IP related matters would be Boldrin and Levine's Against Intellectual Monopoly.)

Are you aware the everyone has a copyright automatically when they create a creative work in certain jurisdictions? Copyright protects you and me from having our work misused or used for profit by other party without permission and compensation. From the tone of your post, you seem to be blissfully unaware that average people either have automatic copyright or can apply for copyright for a small fee for any work they created depending on where they live. This would even include slashdot posts like these. Of course, it would be difficult for an anonymous coward such as yourself to prove that you wrote it since you did not sign in with an account.

The purpose of copyright is to protect the rights of content creators which could very well be an individual for a period of time to allow them to either sell their work directly or to distributing party for financial compensation. Without this protection, there would be very little incentive to create new creative works.

Re:Corporations externalize costs (1)

Timothy Brownawell (627747) | more than 5 years ago | (#28997165)

The purpose of copyright is to protect the rights of content creators which could very well be an individual for a period of time to allow them to either sell their work directly or to distributing party for financial compensation. Without this protection, there would be very little incentive to create new creative works.

Only in theory... and that exact same theory says nobody will ever use BSD-like licenses, or the WTFPL, or such. So it's obviously incorrect, besides not accounting for the production of creative works before copyright was invented.

Re:Corporations externalize costs (1)

plnix0 (807376) | more than 5 years ago | (#28997227)

Copyright was not the main point of GGP, which I would guess is the reason GP did not spend more than a brief pair of sentences on it (into which you somehow read a degree of ignorance not shown by GP). I'm reasonably confident based on GP's comments that he is in fact aware of the facts you refer to. But how is this relevant? Are we supposed to support copyright out of selfishness, simply because we ourselves can partake of it, too? Nonsense. Some people, yourself apparently excluded, believe in absolute morals and contend that individual integrity is of the utmost importance in our relations with the world. If copyright is immoral (and it is), then it does not matter how much I benefit from it. Even if it made me a hundred billion dollars, I would still be a rotten, wicked, selfish bastard of a thief for violating the rights of individuals to use their real property as they would choose.

Re:Corporations externalize costs (1)

Cereal Box (4286) | more than 5 years ago | (#28997585)

A good book to read on copyrights and other IP related matters would be Boldrin and Levine's Against Intellectual Monopoly.

Is there somewhere I can download that book for free?

Re:Corporations externalize costs (2, Informative)

Plunky (929104) | more than 5 years ago | (#28997731)

A good book to read on copyrights and other IP related matters would be Boldrin and Levine's Against Intellectual Monopoly.

Is there somewhere I can download that book for free?

Yes [dklevine.com]

Re:Corporations externalize costs (5, Insightful)

Iyonesco (1482555) | more than 5 years ago | (#28996959)

"We pay for the power setup, the roads, the police force-- they pay none of these costs"

Firstly, "they" pay 40% corporation tax - the second highest in the world. What more do you want? Do you really want to see the total collapse of the US economy as corporations buckle under an even heavier tax burden?

Secondly, who are "they"? A corporation is composed of three groups of people - employees, shareholders and customers. In reality "they" is in fact you, me and everyone else here and it's us who pays the costs of higher taxes on corporations.

If you tax a corporation the money has to either come from raising prices, cutting the workforce or taking a hit and suffering a reduction in share value. In all of these situations it's the public who pays the cost, either through higher prices of goods and services, losing their job or a suffering a reduction in the value of the shares in their retirement account.

When corporations get taxed it comes out of your pocket and it's you that suffers. Quite why you'd want to see them taxed more I don't know.

You think like a ReThuglican Jew (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#28997959)

You think like a ReThuglican Jew

Re:Corporations externalize costs (1)

Caffinated (38013) | more than 5 years ago | (#28998399)

Firstly, "they" pay 40% corporation tax - the second highest in the world. What more do you want?

Actually, Microsoft reported last year that they pay more like 25% and that's probably inflated since it's usually noted in the context of Ballmer threatening to move offshore, so this is their "high" number to use as a club. That they don't actually pay anywhere near the statutory rate isn't a surprise as essentially no companies actually do. In fact the effective tax rate of our corporations is a good bit lower than most industrialized nations when exemptions and manipulations to hide profit are factored in.

A good outline of effective corporate versus statutory tax rates if one is interested [cbpp.org]

"Do you really want to see the total collapse of the US economy as corporations buckle under an even heavier tax burden?"

A mentioned and noted earlier, our corporations aren't suffering higher effective taxation rates here than other industrialized nations and in many cases they're lower. Ultimately, if our infrastructure and the quality of our workforce suffer, it doesn't matter what the tax rate is, they won't locate or stay here with the skill jobs that we want. That's what taxes are for. I understand that corporations are amoral by nature and will try to externalize every cost that they're able to since their guiding force is maximizing profit. As such, they're motivated to make sure that paying for the police force, roads, education and the like is "someone else's problem".

Re:Corporations externalize costs (1)

OeLeWaPpErKe (412765) | more than 5 years ago | (#28999101)

d the quality of our workforce suffer, it doesn't matter what the tax rate is, they won't locate or stay here with the skill jobs that we want. That's what taxes are for. I understand that corporations are amoral by nature and will try to externalize every cost that they're able to since their guiding force is maximizing profit. As such, they're motivated to make sure that paying for the police force, roads, education and the like is "someone else's problem".

You state this as if it's a bad thing. The profit maximizing thing. No offence, but what exactly do you think is done in a competitive environment with those "maximized profits". What do they mean in practice ?

Well, they mean, especially if the profits are split amongst large numbers of not-too-large companies, more jobs, better products, more efficiency in the rest of society (since that's what customers pay for, in the end), more stable environment (yes, really), ... In the long run it means more food, more people, less death.

Taxes, on the other hand, while necessary on some points (police, army), are a negative influence on society. They mean less efficiency, less products, less jobs, lower quality environment (ie. pollution), ... in the long run it means less food, less people. And how do you get from more people to less people ? It's called death.

Yes there are lots of side remarks to make involving monopolies, cartels, the international environment, ... lots of necessary preconditions for this system to exist that just have to be satisfied (unemployment benefits, government aid for the poor and national health care, however are not part of it). The problem I have with Obama is that he tries to solve the problem of Bush's excessive spending (and yes Bush spent excessively) by ... spending more. What total morons we all were voting for this idiot. This guy is supposed to be smart, so answer me this : why is he doing this ? Stupidity or malice. Nobody can seriously believe it will help.

Re:Corporations externalize costs (1, Informative)

Anonymous Coward | more than 5 years ago | (#28997451)

Corporations hire the employees which pay state and city taxes. The incentive was the have the company come here and develop where as they could have built it almost anywhere. The company comes and develop the area and now you have the government pull their support from the business? Now if govt were smart to use their tax dollars responsibility rather than run stupid deficits, every government runs it for some reason. I can't find a govt, city or state without massive amounts of debt. They tax us every year or businesses every quarter but they never seem to have any left over at the end of the year.

Businesses

Re:Corporations externalize costs (1)

maharb (1534501) | more than 5 years ago | (#28999305)

If we didn't pay taxes then a defense corporation, a road building corp, etc would all be established and would offer services that the government currently provides. These costs would then be passed on to the consumer and everything would end up costing the same. The only difference is the most efficient company would win the contracts so everything should end up cheaper than it currently is because we all know governments are terribly inefficient.

You forget that as a consumer of these services want them to cost less. By paying taxes you are paying to make all goods and services cost less. If companies are just swimming in mountains of profits (as it seems you are alluding to) why don't you start one and reap the benefits of all this free money. The truth is that everything is relative and that someone has to provide and pay for all the services in the society. Every day you are alive in a society you are externalizing costs as a human, why is it all the sudden bad to do it as a corporation (which by the way is just a group of people acting cooperatively to meet a goal).

Responsibility to society or shareholders? (4, Insightful)

BadAnalogyGuy (945258) | more than 5 years ago | (#28996505)

When you decide to skirt tax laws, you are able to directly benefit from the greater net income at the end of the day. Shareholders of companies that skirt tax laws benefit greatly because of the greater net revenues. So it seems that everyone should be happy, right? More money to the private sector and we (the private sector) know how to best spend our money.

But what about social services that are necessary to protect the least among us? Rousseau described a social contract which requires each citizen to give up some rights in order to preserve order and safety. John Rawls describes a theory of social justice which demands a safety net which can protect those who are the most unfortunate, at the cost of additional taxes on those most able to pay.

Aren't these companies who take advantage of these ethically questionable tax shelters 1) not paying their fair share to support the social safety net, and 2) putting the onus on the individual citizens/employees who cannot easily move to tax-free states?

Re:Responsibility to society or shareholders? (1)

cellurl (906920) | more than 5 years ago | (#28996617)

Pruett described the notion that best intentions mask guilt buried in the past. That "trying equals succeeding". Pruett also describes publicly traded companies as evil. No one wants health care. Its just a flag that some think must be planted in the ground to show that "trying equals succeeding". ------- Just tell State Farm that in order to do business in California, they have to cover 95% of the people. They will tax the fat or regulate expenses. State Farm, not the government will make health-services useful and profitable.

Re:Responsibility to society or shareholders? (1)

Forbman (794277) | more than 5 years ago | (#28996935)

Except the choice will be (or perceived to be, or lobbied TO be, by the insurance company...) "either cover 95% of the people or you can't do business in CA". Guess which option they'll take?

Re:Responsibility to society or shareholders? (1)

plnix0 (807376) | more than 5 years ago | (#28997297)

More like "either help us steal from 40% of people to help you pay for %20 of people or you can't do business in California".

Re:Responsibility to society or shareholders? (1)

cellurl (906920) | more than 5 years ago | (#28997965)

My problem is, I have no voice, I doubt you do either. We are kept so busy that you nor I are able to attend rallys or picket. I wish just once slashdot users would rally like AARP does.

Re:Responsibility to society or shareholders? (1)

cellurl (906920) | more than 5 years ago | (#28997925)

Let one walk. Others will stay. Until one carrier "walks", there is money left on the table. Play hardball. They have a 85% mark, I am just saying up it.

Re:Responsibility to society or shareholders? (3, Insightful)

cryfreedomlove (929828) | more than 5 years ago | (#28996633)

The best social contract is one that creates jobs for the 'least among us'.

In general, I agree with you but I have come to realize that there really is no corporate tax that is not simply passed on to consumers in the form of higher prices. I'd prefer no corporate tax at all, accompanied by the individual flat tax with no allowable deductions. Simple, clear, enough to fund the social safety net.

Re:Responsibility to society or shareholders? (1)

FudRucker (866063) | more than 5 years ago | (#28996717)

RE:"there really is no corporate tax that is not simply passed on to consumers in the form of higher prices"

then in turn the higher income garnered from the higher prices should raise their taxes, you see how it can easily spiral out of control? the USA should change the state taxes to a more centralized system to level the field so the tax is the same no matter where they move their cloud to, and if they leave the country then put a tarif on them for it. why should the consumer pay extra because the top dawgs want a 30 bedroom mansion & small private navy of pleasure craft? (it has been spiraling out of control since Reaganomics turned the world in to a playground for the rich at the expense of the working classes)

Re:Responsibility to society or shareholders? (1)

cryfreedomlove (929828) | more than 5 years ago | (#28996741)

Your solution is a job killer, for sure. If a corporation knows that there is a tariff for moving their data center outside the USA then they will never build it here in the first place. The data center and it's attending jobs will be built in another country.

Thanks FudRucker, thanks a lot. Welcome to the 3rd world USA.

Re:Responsibility to society or shareholders? (1)

FudRucker (866063) | more than 5 years ago | (#28996759)

did i mention i am a communist? drink the koolaide comrade, the rest of us are and it tastes fine

Re:Responsibility to society or shareholders? (1)

cryfreedomlove (929828) | more than 5 years ago | (#28996871)

Did Uncle Joe Stalin taste fine? How about Pol Pot?

Re:Responsibility to society or shareholders? (1)

FudRucker (866063) | more than 5 years ago | (#28996929)

oops forgot the /sarcasm tag on that one, actually capitalism worked just fine for ages before Reaganomics came along, just ask anyone over 40 or 50.

Re:Responsibility to society or shareholders? (1)

plnix0 (807376) | more than 5 years ago | (#28997311)

Yes, you did. To quote you:

then in turn the higher income garnered from the higher prices should raise their taxes, you see how it can easily spiral out of control? the USA should change the state taxes to a more centralized system to level the field so the tax is the same no matter where they move their cloud to, and if they leave the country then put a tarif on them for it. why should the consumer pay extra because the top dawgs want a 30 bedroom mansion & small private navy of pleasure craft? (it has been spiraling out of control since Reaganomics turned the world in to a playground for the rich at the expense of the working classes)

Re:Responsibility to society or shareholders? (1)

FudRucker (866063) | more than 5 years ago | (#28997721)

nice try but you selected the wrong comment, that one you selected to quote is the one i am serious about, the problem arises with different US states having differing tax benefits that vary depending on the whims of state government, then company A moves in and eventually the tax benefits are dissolved like the washington state example so company A looks for another state which adds to the cost of running their cloud in having to pack up and move and then set up elsewhere, which also adds to economic instability. IF it did not make a difference because all states were on the same tax level then company A would not move (neither to another state or outside the USA) its unstable because its the cost of doing business is higher and the corporates lose trust in government from the instability factor...

i am just as much of a freedom loving american as anyone = born & bred in the USA, i like capitalism just fine, it is just the struggle between the taxers & constituents and the taxed & investors that screw it up, they dont want to look at the big picture unless they have to for selfish profit motives and never even think about looking at the big picture in a way that benefits everyone = themselves & investors + the government & their constituents (some of which may or may not be employees)...

Re:Responsibility to society or shareholders? (1)

Bartab (233395) | more than 5 years ago | (#28998339)

the problem arises with different US states having differing tax benefits that vary depending on the whims of state government

Federalism. Not just a good idea, but constitutional law!

Re:Responsibility to society or shareholders? (4, Insightful)

zippthorne (748122) | more than 5 years ago | (#28997027)

Yeah, that'll really encourage businesses to establish operations in the first place.

There are a few basic principles which I wish people, especially politicians would take into account when setting up these things.

  1. The Laffer Curve [wikipedia.org] . It's certainly more complicated than that, but the basic argument that there is a maximum revenue possible at some optimum tax rate shouldn't be simply scoffed at and ignored. Further, the more general idea is that, for any given level of required revenue (below the maximum, wherever it may lie), if there is more than one level of taxation which would generate that revenue, it is immoral to choose the higher rate, as it needlessly restrains the activity which lifts everyone's standard of living.
  2. If you want to play social games, have higher taxes on things you want to discourage and lower taxes on things you want to encourage now. If you change your mind later, don't be surprised or upset when people doing those things decide to move somewhere where the state wants those things done.
  3. Don't demonize people or organizations for taking advantage of your tax structure to minimize their taxes. You had lower taxes on certain things because you wanted to encourage that behavior, didn't you?
  4. No special cases. There is too much opportunity for graft if your politicians can make special deals on an individual basis and claim credit for those very visible jobs. If the deal is good for one company, it's good for every company. Make that the policy.

Your plan is every bit objectionable as the cable company's sleezy "super low introductory rate for six months, with unspecified but much higher rate for the remainder of your twenty-four month commitment." Except that when the government does it, there are guns or the threat of guns involved.

Re:Responsibility to society or shareholders? (1)

FudRucker (866063) | more than 5 years ago | (#28997813)

exactly right on, thats what needs to be done, the government needs to quit playing games with taxes, set a reasonable level and keep it there, and it should be the same all across the board for all states, or else it will be the same old struggle that never really gets any long term benefits for anyone, not the companies wanting to do business, not the government needing the tax revenue and especially not the working class that need the jobs/income...

Re:Responsibility to society or shareholders? (1)

superwiz (655733) | more than 5 years ago | (#28997859)

Your plan is every bit objectionable as the cable company's sleezy "super low introductory rate for six months, with unspecified but much higher rate for the remainder of your twenty-four month commitment."

Much sleazier, actually. It's more like a cable company that offers a low teaser rate but also says that if you don't buy the service, then you'll be responsible for cableman's children's starving .

Re:Responsibility to society or shareholders? (1)

FudRucker (866063) | more than 5 years ago | (#28997963)

RE:"then in turn the higher income garnered from the higher prices should raise their taxes, you see how it can easily spiral out of control?"

i think you misunderstood the intent of my sentence, did you not see the question mark at the end of this sentence, it was to show an example, i am not sure of a flat tax would fix this or not, i have a feeling a flat tax would but i just dont know for sure, i really dont think anyone has all the answers and if anyone claims they do have all the answers they are the ones you better watch closer than the ones that admit they dont. i dont want to break capitalism i want to see it stabilized...

Re:Responsibility to society or shareholders? (1)

budgenator (254554) | more than 5 years ago | (#28998739)

I've aways thought that corporate income tax rates are less than individual income tax rates; effectively a corporation paying taxes reduces the individual stockholders income taxes! Corporates income taxes are much more flat than individual and so more regressive, one would think that Liberals would be against corporate income taxes.

Re:Responsibility to society or shareholders? (3, Insightful)

PPH (736903) | more than 5 years ago | (#28996677)

Rousseau described a social contract which requires each citizen to give up some rights in order to preserve order and safety.

Fine. But the terms of the contract were changed. Unilaterally. The state offerd tax incentives to attract business and then withdrew them once the business is up and running. Why not just charge the going tax rates from the outset?

For every company that has the foresight to use portable infrastructure [slashdot.org] , there are hundreds that have sunk costs and can't afford to move easily. But they serve as warnings to other potential investors as to the ethics of the particular jurisdictions that they are considering. Companies avoid that state and the population suffers, not only from a lack of funding for social services, but a lack of jobs.

Re:Responsibility to society or shareholders? (1, Interesting)

BadAnalogyGuy (945258) | more than 5 years ago | (#28996747)

Many Christians believe that those who will enter the Kingdom of Heaven are already named in the Book of Life. God is omniscient, therefore he already knows who will spend eternity in Glory and who will burn forever in the Lake of Fire. Calvinists hold this concept of preordination.

However such a concept flies in the face of a loving Creator for many Christians. So these subscribe to the concept of Free Will. The choices you make in life actually affect how you will be judged in the afterlife.

What it boils down to, though, is whether God is omnipotent and omniscient. If he is, then he knows that a vast number of people will die and enter the flames of Hades, and his refusal to do anything about it is far from the loving God caricature He is portrayed as. On the other hand, if he isn't those things, then how shall we live such that we can pass lightly through the Gates of St. Peter? Isn't the fallibility and lack of knowledge a sign of weakness in our God?

What this brings me to is your comment.

Fine. But the terms of the contract were changed. Unilaterally. The state offerd tax incentives to attract business and then withdrew them once the business is up and running. Why not just charge the going tax rates from the outset?

From the outset of what? Are laws never to be changed? No one can know the perfect formulation of taxes and services from the outset of incorporation. Laws should be allowed to change as no politician is infallible, and thus those subject to those laws should also have the ability to adapt (even to the point of leaving the neighborhood/city/state/country) if those laws become too heavy a burden.

It is a mistake to think that laws are perfect from Day 1.

Re:Responsibility to society or shareholders? (1)

blahplusplus (757119) | more than 5 years ago | (#28997603)

"What it boils down to, though, is whether God is omnipotent and omniscient. If he is, then he knows that a vast number of people will die and enter the flames of Hades"

Hell of current mainstream christianity is incorrect reading of the bible, for those who are not christian and but are interested in christian history and whatnot it's wonderful that other unknown and small christian denominations have done quite a job debunking modern christianity from within their own ranks and much has been known for a long time.

http://en.wikipedia.org/wiki/Christendom_Astray_from_the_Bible [wikipedia.org]

http://thechristadelphians.org/htm/books/astray/astray_mainframe.htm [thechristadelphians.org]

Re:Responsibility to society or shareholders? (0)

Anonymous Coward | more than 5 years ago | (#28998169)

The state offerd tax incentives to attract business and then withdrew them once the business is up and running.

Is that really so?
Don't know about USA, but in France this happens all the time: tax breaks are meant as a help to start new businesses. They're not meant to be lifelong subventions. It's only for a couple of years. It's explicit from the very start.

Re:Responsibility to society or shareholders? (0)

Anonymous Coward | more than 5 years ago | (#28998685)

in the USA we have corporate welfare, where the rich fatcats get tax breaks but if a little person is just late with his taxes for a little while they threaten them with heavy fines and prison...

Re:Responsibility to society or shareholders? (3, Insightful)

Robin47 (1379745) | more than 5 years ago | (#28996777)

Aren't these companies who take advantage of these ethically questionable tax shelters ...

I actually went back and RTA thinking I missed something. I'm still scratching my head trying to think of a way this can be characterized as "ethically questionable tax shelters". No one is doing anything ethically challenged here except maybe the government trying to change the deal to generate a new revenue stream. Yeah, Microsoft, sit there and take it.-Not! I can't blame them in the least.

Re:Responsibility to society or shareholders? (1)

BadAnalogyGuy (945258) | more than 5 years ago | (#28996803)

No one is doing anything ethically challenged here except maybe the government trying to change the deal to generate a new revenue stream.

This is a common meme, but it disregards the fact that the government exists to implement the will of the citizens. Many of those Microsofties who voted in the last election voted for the winners, and those winners are now making the laws. Call it the tyranny of the majority, but it is the will of the majority.

Re:Responsibility to society or shareholders? (1)

Robin47 (1379745) | more than 5 years ago | (#28996889)

I used to think that way but have changed my thinking to government seems to implement the will of government, no matter what they promise in the campaign.

Re:Responsibility to society or shareholders? (1)

plnix0 (807376) | more than 5 years ago | (#28997275)

Great start, but you should have stopped after the first paragraph.

Your post includes too many fallacies to fully address in a short reply, but I'll mention a few of them.

putting the onus on the individual citizens/employees who cannot easily move to tax-free states?

Individuals can move. "Easily" is a red-herring. Economics and their individual situation determines how easy the move will be and whether a move will be worth it to them (kind of like with big companies). But believe me, moving a family across the country is a whole lot easier than moving a large company. Obviously they can't move to tax-free states, because, (due to arrogant people like you who think the world owes you something just because you were born), there are no tax-free states.

By the way, giving up rights will never gain you order and safety. The word 'safety' only has relevance in relation the thing which is to be kept safe. In has no meaning whatsoever considered apart from rights.

Re:Responsibility to society or shareholders? (1)

aaarrrgggh (9205) | more than 5 years ago | (#28998049)

Sorry, but it isn't about being a good citizen. When you invest $600MM-1B in any facility, sales tax becomes a huge cost, and at a different scale than consumer sales tax.

It used to be that sales tax just ht the final transaction, now it is every step in the process. This doesn't help buld the economy, the schools, or roads in an equitable relationship between payees and users. (Taxation without representation?)

For a project in California, the state actually takes in more cash from a major construction project than the contractor's profit margin.

A better solution needs to be found.

Nice going states! (0)

Anonymous Coward | more than 5 years ago | (#28996509)

Give away millions in subsidies to create a few thousand jobs.

Migrating clouds are a good thing if it teaches you spendthrifts a lesson. Besides, in a few years I'll have so much computing power available to me at the consumer level I won't need somebody else's cloud; I'll have my own. Try thinking beyond the next election will you? Be a Statesman, and not just a Pol.

Data Clouds become more like real clouds (1)

Kotoku (1531373) | more than 5 years ago | (#28996515)

First data moves up into the massive cloud from all over. Then the cloud moves. Then somebody does a dance of sorts. All our data crashes to the ground. (Erm..this step is reserved for Microsoft's clouds)

A new threat? (2, Funny)

olborer (1372163) | more than 5 years ago | (#28996555)

The first thing on my mind after reading the topic was a government run development of stealth flying apparatus chasing innocent citizens for not paying taxes.

flag@whitehouse.gov is illegal (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#28996581)

When is Slashdot going to run a story about Obama's snitch program being illegal?

Basic economics (3, Insightful)

Hawthorne01 (575586) | more than 5 years ago | (#28996585)

Businesses treat taxation as damage and go around it. Or something like that.

Re:Basic economics (1)

DaveGod (703167) | more than 5 years ago | (#28997577)

Businesses treat taxation as cost and minimise it.

That's how I'd rephrase your point (while still saying roughly the same thing).

In Microsoft's case this is quite literal, as the tax adds 7.9% to the cost of their equipment.

Companies exist to maximise shareholder wealth. This is done by increased share price and through dividends. Tax reduces shareholder wealth, it is the company's duty to it's shareholders to minimise it - but legally. Three usual terms divide up the spectrum of minimising tax:
- tax planning, which is simply as described to be tax-efficient by design and is perfectly bona-fide.
- tax avoidance, which is using the system to your advantage (i.e. going out of your way to reduce tax). Legal but has a wide scale of moral grey.
- tax evasion which is cheating.

To a company tax is just another cost. A society offers it certain things and extracts a price in return. Taxation can be high (relative to other areas) provided there are compensating advantages. Once the cost of taxation exceeds those advantages, that place is no longer best and the company is failing in its duty towards it's shareholders if it does not move. Complaining that a company moved to minimise tax is hypocritical - you also put a large emphasis on price every time you buy something.

The problems are generally that some companies evade tax, legislators are fallable (leading to undesirable avoidance), and governments are always mucking around with tax. That last point is often understated. Differences in taxation distorts the market: a company may choose to avoid a tax area that has a natural competitive advantage because that country has higher taxes - TFA is a good example, Quincy has hydro power. Texas is therefore suboptimal and on balance society has a net loss.

Tax is also changed over time, so a company may do good planning which then backfires because the tax is changed. This is obviously means those plans are now inefficient, and again we have a net loss.

So we see that taxation is both a direct cost to a company and also poor implementation of taxation has a cost from inefficiency. Both of these pass on to society.

None of the above is any comment for/against high taxation, but rather to show the importance of how it is implemented.

Tax entities will get wise to this (3, Insightful)

davidwr (791652) | more than 5 years ago | (#28996629)

Taxing entities will continue to give tax breaks, but there will be strings attached. Instead of "10 years with favorable tax status if you keep $x in local payroll during those 10 years" it will be "10 years with favorable tax status if you keep $3x in local payroll during the following 30 years, adjusted for inflation, with penalties and the ability to recapture the taxes if you default."

Re:Tax entities will get wise to this (1)

bjourne (1034822) | more than 5 years ago | (#28998029)

Hopefully they will realize that tax breaks is a futile race to the bottom. For every state that gives a rebate there is another one that can undercut you. In the long run it is not sustainable and just wastes tax payer money for everyone.

hmmmm..... (0)

Anonymous Coward | more than 5 years ago | (#28996635)

Oh snap!

Who'd of thought they could do something like that... it's not like there aren't already datacenters in shipping crates... oh wait.

Data Truckers! (1)

SEWilco (27983) | more than 5 years ago | (#28996779)

We're moving the clouds, rolling down the highway, got to keep that data moving, 'cause we're data truckers in our Bit Rigs!
We're sucking up diesel, cause we'll suck up the tax cuts, when we park the data, 'cause we're data truckers in our Bit Rigs!
We're moving to greener fields, and Joe's rig is greener, with his nuclear-powered drivetrain, 'cause we're data truckers in our Bit Rigs!

What, you expect rhyming with moderation that only goes up to 5?

What does this have to do with "the cloud"? (3, Insightful)

argent (18001) | more than 5 years ago | (#28996641)

It's the equipment that's being taxed... or not... not the data on them. Moving servers around doesn't get cheaper or more expensive because they're serving Azure or Halo... you still have to move the physical boxes and the people maintaining them.

Unless by "the cloud" you mean "anything you can run in a colo". But that's kind of diluting the term to the point of meaninglessness, isn't it?

Re:What does this have to do with "the cloud"? (1)

ahabswhale (1189519) | more than 5 years ago | (#28996817)

It's meaningless regardless because companies that aren't running clouds are already playing this game. And by non-cloud businesses, I mean manufacturing. Talk to any Irishman and I'm sure they would be happy to give you a dissertation on how this game works. Then in about two years ask the same question to a Polish man.

Re:What does this have to do with "the cloud"? (2, Informative)

Attila Dimedici (1036002) | more than 5 years ago | (#28997111)

Unless by "the cloud" you mean "anything you can run in a colo". But that's kind of diluting the term to the point of meaninglessness, isn't it?

That is what is meant by "the cloud". "Cloud" computing is just another way of saying client/server, except that "cloud" computing usually means that the Internet is involved somehow. The only difference between "cloud computing" and client/server architecture is that in "cloud" you don't pay any attention to where the server actually is (whereas in traditional client/server you might, although not necessarily).

Re:What does this have to do with "the cloud"? (1)

argent (18001) | more than 5 years ago | (#28997727)

"Cloud" computing is just another way of saying client/server, except that "cloud" computing usually means that the Internet is involved somehow.

Then I was doing "cloud computing" in the '80s. Oh, hmmm, maybe I was doing "cloud computing" in 1972. Oh, it wasn't "the internet", it was a TDM multiplexed line between Sydney and Minneapolis.

Re:What does this have to do with "the cloud"? (1)

Attila Dimedici (1036002) | more than 5 years ago | (#28997955)

"Cloud" computing is just another way of saying client/server, except that "cloud" computing usually means that the Internet is involved somehow.

Then I was doing "cloud computing" in the '80s. Oh, hmmm, maybe I was doing "cloud computing" in 1972. Oh, it wasn't "the internet", it was a TDM multiplexed line between Sydney and Minneapolis.

Yes, you were.

Nothing new here (4, Insightful)

Robert1 (513674) | more than 5 years ago | (#28996669)

This is a basic business fact, has been known for decades, and is one of the big reasons why people are justifiably against increased taxes.

It happens on every level of government - city, county, state and finally country. Tax increases at any of these levels tend to drive away businesses, lower taxes and incentives draw them in. The only thing that makes this news-worthy is that cloud-computing is a fairly new industry. Surprise, surprise they react to taxes like any other business.

Of course, every level of government NEEDS taxes, but tax increases to pay for various social services ultimately have to be finely balanced between driving away business with the need for those services. Heavily taxing business to provide for such services helps the community in the short term, but drives away the business and hurts the community through job loss in the mid to long term. Did the social service help the community greater than the loss of the jobs hurt it? There-in lies the delicate balance that is illustrated by the issue of taxes and business migration. Again, nothing new.

Re:Nothing new here (1)

UnknowingFool (672806) | more than 5 years ago | (#28997045)

And businesses will do whatever they need to do to lower their taxes even if that means exploiting a loophole. MS is not alone here. By the way, MS while its headquarters is in Seattle, all sales are recorded for their office in Utah where there are no corporate taxes. It is estimated that since 1997 MS has earned some $92 billion in profits and avoided $528 million in taxes.

Re:Nothing new here (1)

jcr (53032) | more than 5 years ago | (#28997253)

It is estimated that since 1997 MS has earned some $92 billion in profits and avoided $528 million in taxes.

So, they've got better accountants and lawyers than software developers, it would seem. Not surprising, really.

-jcr

Sure, clouds move ... (2, Interesting)

maxwell demon (590494) | more than 5 years ago | (#28996707)

Everyone who has ever looked at the sky know that clouds move, and change their movement if the wind changes. And if the cloud gets too big, it starts to lose water by dropping it on the ground, while small clouds tend to evaporate away completely. It's only natural that computing clouds behave the same. Just wait for the first digital thunderstorm in the cloud. And don't be too upset about the data losses.

Buzzword comes back to bite you. (3, Funny)

SilverHatHacker (1381259) | more than 5 years ago | (#28996713)

Yes, clouds move. In the upper atmosphere, air cools and sinks, causing wind currents, which blow the clouds around.
Wait, what's that you say?
Oops, my mistake.

I'm amazed someone hasn't mentioned it yet... (4, Funny)

cpt_drewbie (1479889) | more than 5 years ago | (#28996715)

"Mike Manos, and his Hands of Fate, predicts that future cloud platforms will move often to chase lower taxes or cheaper power."

Slightly edited, bolded for effect.

Microsoft's Tax Snit Jeopardizes Azure Users (5, Informative)

theodp (442580) | more than 5 years ago | (#28996719)

Microsoft has put its Azure customers on notice [msdn.com] that 'all applications and storage accounts in the 'USA - Northwest' region will need to move to another region in the next few months, or they will be deleted'. So much for not diverting you from your core duties [microsoft.com] ). BTW, Microsoft seems to think it's entitled to a 100% sales tax exemption [seattlepi.com] .

Re:Microsoft's Tax Snit Jeopardizes Azure Users (1)

nurb432 (527695) | more than 5 years ago | (#28997217)

Why couldn't they do the migration for the users? Other data providers would do that in the event of a data center move.. Sure might be some downtime, but its not put on the user to figure out what to do to keep their business alive..

you are too (1)

plnix0 (807376) | more than 5 years ago | (#28997355)

BTW, Microsoft seems to think it's entitled to a 100% sales tax exemption.

In fact, it is. So are you.

Re:Microsoft's Tax Snit Jeopardizes Azure Users (1)

budgenator (254554) | more than 5 years ago | (#28999377)

BTW, Microsoft seems to think it's entitled to a 100% sales tax exemption [seattlepi.com].

Actually it's not that outrageous, A manufacturer gets a sales tax exemption on goods and materials used in an industrial process, Micro$oft's "industrial process" is holding, moving and processing data, seems not too distant an analogy. There is still plenty for property and income taxes. If it were for a development center then, then no sale tax exemptions should apply; a newspaper pays sales tax on office paper, doesn't on newsprint paper.

Just another storm on the horizon... (2, Insightful)

bschorr (1316501) | more than 5 years ago | (#28996899)

So while Cloud providers are moving their clouds around for the best deal...what restricts them to hosting in the USA at all? And therein lies one of the fundamental problems with cloud computing for company data. I can think of a number of countries in the world where I would *NOT* want my confidential company data stored and some of those countries might be pretty attractive to hosting providers.

Their sales guys can talk all they want about how wonderfully secure the whole thing is, but if my data physically resides on servers in unfriendly or unstable countries that's all just a lot of hot, moist, air, moving in from the northwest ahead of a low pressure system...

Re:Just another storm on the horizon... (1)

StreetChip (870758) | more than 5 years ago | (#28997021)

Unfortunately, nothing restricts them from moving your intellectual property overseas. A US Congressman once tried to raise a fuss about this very issue but nothing was ever done about it. See "Your data in a cloud over India": http://techclub.mypctechs.com/?p=364 [mypctechs.com] and this article: http://news.cnet.com/Congressman-raises-offshore-ID-theft-concerns/2100-1028_3-5165248.html [cnet.com]

Re:Just another storm on the horizon... (1)

bschorr (1316501) | more than 5 years ago | (#28998817)

Exactly right and that's a potentially very big issue that a lot of companies are turning a blind eye to in the pursuit of cost cutting.

It only works for so long (1)

BitZtream (692029) | more than 5 years ago | (#28996907)

It only works until every state taxes them the same, once everyone taxes them normally they'll stay where they are or move to where it makes sense for real reasons.

Or we can just nationalize all taxes and this sort of bullshit will end. We'll have a bunch of new problems, but this sort of moving and wastefulness because they don't want to support their local services will end.

Re:It only works for so long (1)

merlin3000 (1576087) | more than 5 years ago | (#28997063)

Actually after the prices are lower and kind of stable between all the major cloud services/storage providers, doing so would probably force them to move their servers to other countries where the taxes are lower. The other option is to increase the prices. A mix of both will probably happen. Anywhere will become global and those who want it localized in USA will have to pay premium. I'm not criticising either side, the companies or the government. But when doing taxes one has to have in mind how will people react and act acoordingly, possibly achieving some middle ground.

That is why you should beware of tax breaks (0)

Anonymous Coward | more than 5 years ago | (#28996913)

A locality that needs to give you a sweetheart deal to relocate probably is screwing over their local homeowners and businesses and otherwise sucks as a place to start a business.

They are also the kind of places that will reneg on a deal if you do decide to relocate.

Also beware of places that have to constantly advertise as being good places to start a business as they are propably just the opposite.

We need more Americans floating like clouds and voting with their federalist feet to keep crap governments more honest. Crap governments will take more and more of your money to get more and more crap, not progress.

Race to the bottom! (1)

paiute (550198) | more than 5 years ago | (#28996915)

Last one there makes slightly less of a profit in the next quarter!

just like this guy! (0)

Anonymous Coward | more than 5 years ago | (#28996917)

http://media.photobucket.com/image/super%20mario%20bros.%203%20cloud/KupoNH/renders/NewSuperMarioBros-CloudKoopa.png

Your data in a cloud over India (5, Interesting)

StreetChip (870758) | more than 5 years ago | (#28996943)

Considering the track record of tech companies and their quest to save a few bucks at the expense of American jobs, it's just a matter of time before all of your data in the cloud winds up overseas. Who has access to read through your sensitive documents when that time comes? The article shows how easy it us for one cloud provider to uproot the collective data of thousands of companies and move it anywhere they please. Where will they move the data next? Read this article, "Your data in a cloud over India": http://techclub.mypctechs.com/?p=364 [mypctechs.com]

"Corporation follows cost minimization strategy" (1)

clyde_cadiddlehopper (1052112) | more than 5 years ago | (#28996969)

Nothing to see here. Move along.

Movable customers chase low prices (1)

ewg (158266) | more than 5 years ago | (#28997011)

Just as movable customers chase low prices. And movable investors chase high returns.

Re:Movable customers chase low prices (1)

Sponge Bath (413667) | more than 5 years ago | (#28997635)

Good point. Just checking, does everyone here claiming MS is unethical for doing this report all internet purchases to your state and local government and pay sales taxes on those purchases? That is required in many states, so if you don't it is unethical and probably illegal.

I don't, of course, but that's because I'm a right bastard.

The genius of shipping container datacenters (1, Interesting)

Anonymous Coward | more than 5 years ago | (#28997081)

This is why I continue to maintain that shipping container datacenters (or houses even) are a brilliant idea. It totally screws with the concept of real estate being, well, permanent. But more importantly, it allows you to do things that were otherwise impossible to do.

Don't like the political climate? Unplug, drop them on trucks and within a week, you could LITERALLY move and reestablish a full data center from start to finish, assuming the infrastructure was in place at the destination (power, cooling, flat land). Mostly just power.

It's no wonder Google and Microsoft (and many others) embrace the concept of cheap equipment that is housed in a high density and highly mobile setup.

It's no longer a bluff when you can LITERALLY truck an entire 400,000 sq ft facility in a weeks time and for a cost that would be far less than the expected increase in taxes/regulation/etc. You could even stage it such that downtime would be minimal at best. Rolling restarts, literally!

Was it just me... (0)

Anonymous Coward | more than 5 years ago | (#28997139)

... or did anyone imagine big, white clouds in the air floating from tax break to tax break? Like the clouds Care Bears ride?

Hypocrits (1, Insightful)

Anonymous Coward | more than 5 years ago | (#28997263)

I find it ironic that corporations like Microsoft are being criticised for openly lobbying State governments for tax exemptions by a community of people who are extraordinarily likely to buy things off of the internet and simultaneously claim that they have never heard of a "use tax" (or simply refuse to pay it). Bravo to the 95% of you who are tax cheats. Apologies to the 5% who actually paid.

Terminology (2, Insightful)

michaelmalak (91262) | more than 5 years ago | (#28997371)

Here's hoping that this "cloud" terminology goes the way of "mashup". "Server farm" and "data center" refer to specific concrete entities. Labeling a data center as a "cloud" does not give it magical capabilities. "Cloud" used to refer to the peer-to-peer nature of the Internet. Now it's being applied to servers from the old client/server days. Talk about complete perversion.

Re:Terminology (1)

TechyImmigrant (175943) | more than 5 years ago | (#28998113)

Can we go back to calling it timeshare instead?

Before long, companies will start adding up their 'cloud' costs and conclude that a few rackmount PCs in an air conditioned room would be cheaper, clouds will go out of fashion for a few years, then a bunch of other companies will have a great idea to be an outsourcer for compute time, give it a stupid name like 'cyberether' or some such nonsense and the cycle will start again.

editors, (1)

superwiz (655733) | more than 5 years ago | (#28998007)

can you please mark nonsense like this article under politics as well as "the internet"? the whole anti-humanist-under-guise-of-being-anti-corporate crowd makes it sooooooo not worth reading. i'd like to have an opportunity to block this type of drivel.

just think if the government (1)

FudRucker (866063) | more than 5 years ago | (#28998067)

taxed microsoft the same way microsoft sold windows & office licenses?

IT Gypsy (1)

stabiesoft (733417) | more than 5 years ago | (#28998109)

So tech people are going to be gypsy/circus people moving town to town with their semi's chocked full of servers. They'll summer in alaska and winter in florida or texas.

Hey YOU! (1)

Newer Guy (520108) | more than 5 years ago | (#28998265)

Get off of my Cloud...
Load More Comments
Slashdot Login

Need an Account?

Forgot your password?