Microsoft is a trillion-dollar company these days, and it seems Redmond wants to be paying more tax to the U.S. government. Last weekend, Washington state legislature introduced a new tax hike against tech companies. Interestingly, Microsoft has been actively lobbying for this increase.
GeekWire reports the new tax laws place a 67 percent increase on computing organizations in Washington state with revenue of over $100 billion. Last year, Microsoft broke into the $100 billion revenue club and looks certain to maintain that number during this fiscal year. Washington is also home to Amazon, another $100 billion revenue and trillion-dollar cap club member.
So why are Microsoft, and to some degree Amazon seeking a tax increase? It's normal that companies try to avoid paying tax, but this situation is different.
Under the new tax stipulations, Washington state has pledged to redistribute the $370 million it makes from the new tax hike by 2021. That redistribution will be focused on a new Workforce Education Investment Account to help produce financial help for students in computer science fields.
Betting on Education
In other words, Microsoft is betting on exchanging extra tax dollars for a pick of the best computer science students from a growth in related jobs. This is certainly not a far-fetched aspiration. The Bureau of Labor estimates 1.4 million computer science jobs will be developed over the coming 18 months. However, there is a graduate gap, with only 400,000 with the required skills for the jobs.
A Microsoft spokesperson provided the following statement to Geekwire after the passing of the bill:
“Education beyond high school has long been an onramp to success in Washington state and our nation, and a priority for Microsoft. We're proud to have supported HB 2158 because it will help recession-proof higher education in our state and expand access, especially for those from low and middle income families, to the broad range of postsecondary education opportunities that kids in our state will need to succeed in the future.” –Irene Plenefisch, Microsoft Government Affairs Director, Washington state.