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10.22.08

Microsoft Influence on Ireland and the United Kingdom

Posted in Europe, Finance, Microsoft, Open XML, Patents at 11:06 am by Dr. Roy Schestowitz

Question of Tax

Microsoft’s tax evasion tendencies are more notorious than most, so they were discussed here many times before, e.g. in [1, 2, 3]. There are concrete examples to show this, even at a more personal level and even a criminal level. Over in the IRC channel, a reader has just brought to our attention this article from May. Part of it says:

Accounts for Microsoft Ireland Research, an Irish subsidiary of the global software giant, show that the company paid just €460,000 in tax, on profits of more than €1.2 billion last year, by using provisions in Irish tax law to take its corporation tax bill down from €158m. Much of Microsoft’s international profits are channelled through Ireland, but because the main company for Microsoft’s activities has unlimited liability, it does not have to file detailed accounts.

Microsoft’s handling of tax issues is a discussion that typically revolves around Ireland for very good reasons that we explored before and will revisit in a moment.

More recently, Microsoft came under fire in India for its practices that involve tax exemptions. They lost the case, which we last mentioned a few weeks ago. They keep dodging the law, just as they do in the United States and Europe (unfulfilled promises and feet-dragging).

Question of Cronyism

In previous posts that mentioned Charlie McCreevy [1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28], his negative impact on European law was shown. He seemingly favours monopolisation. It’s worth realising where he comes from (Minister for Finance in Ireland). To quote a portion from Wikipedia:

A consistent advocate of cutting taxes and spending, he [Charlie McCreevy] then had an opportunity to implement these policies. In 1999 he announced the biggest give-away Budget in the history of the state. The dramatic cut in interest rates which preceded the joining of the Euro, combined with a tightening labour market and tax reductions led to significant increases in inflation. His 1999 budget also included individualisation measures to reduce the heavy tax wedge faced in particular by married women who choose to work. However, couples on a similar income where one parent worked in the home would not see a similar reduction in their tax bill and following much public debate an extra tax allowance was introduced for stay-at-home spouses. It later emerged that his Tax Strategy group had advised against introducing individualisation due to reasons of cost rather than principle. The change is viewed by some as making a significant contribution to increased female participation in the workforce. However, female workforce participation had been growing even before tax individualisation, due to improved economic conditions.

During his term in Finance, he made many changes to simplify the tax system and presided over Ireland’s entry to Economic and Monetary Union of the European Union and later, the changeover to the Euro. In the early 2000s, when Irish economic growth fell back, he maintained strict control on growth in government spending. This was after he had increased government spending in the previous three years. He maintained a significant primary surplus during his 7 years in Finance, while also implementing the tax-cutting programme, major increases in health, education and pension funding as well as increasing investment in infrastructural development to 5% of GNP.

This ought to explain why Microsoft was attracted to the region. Let’s not forget The Great OOXML Fiasco and the role Ireland played in it (more examples here).

Question of Lobbying

Regarding Microsoft influence inside the British government, we have already accumulated many links in this post, as well as others. Including the references at the bottom, they make up a partial summary of the many examples already presented in this Web site. In the spirit of never repeating facts where it is possible to just reference prior coverage, we leave that as it is. We just need to sort out a better archiving and searching facility.

Regular readers may remember the Carlyle Group and its possible distant connections to Microsoft. Well, John Major, Britain’s former Prime Minister was appointed its chairman several years ago. A reader showed this to us yesterday.

The Carlyle Group is pleased to announce that John Major, the former Prime Minister of Great Britain, will be joining the firm as Chairman of Carlyle Europe.

In that capacity, Mr. Major will serve as Chairman of Carlyle’s European private equity funds and their advisory boards. Mr. Major will also be involved in providing counsel and advice to the senior Carlyle investment professionals, now operating in Barcelona, Frankfurt, London, Madrid, Milan, Munich, and Paris. Carlyle’s European private equity funds pursue and make investments in management buyouts,

On several occasions we also mentioned the Bilderberg Group [1, 2, 3, 4, 5, 6, 7], which lists among its ranks (or participants) the Gates family as well as Labour Party leaders.

It is important to keep track of individuals because companies are, after all, just made out of people, whose preference guides choice and direction of a company (or country). Even the United States Department of Justice is said (and shown) to be in Microsoft’s pocket.

‘But when Noorda raised the possibility that Washington might block a merger anyway, Gates replied, according to Noorda: “‘Don’t worry, we know how to handle the Federal Government.”‘ (Gates strongly denies this. “Are you kidding?” he snaps. “The Department of Justice makes their own decisions.”)’

More: Going after Microsoft: the FTC didn’t know what Bill Gates did – but they were sure he must have done something wrong – investigation into alleged collusion between Microsoft and IBM to control computer operating software systems; CEO William Gates – Cover Story

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2 Comments

  1. Needs Sunlight said,

    October 22, 2008 at 12:07 pm

    Gravatar

    Microsoft is bleeding the lifeblood out of the US through three wounds:

    1) The loss in productivity due to ever changing, mildly incompatible formats and protocols. Count also the sore known as MS Vista, and the malicious damage is in double digit billions.

    2) Apparent tax dodging funnels money right out of the US economy. Further, this is made worse than it needs to be through MS over-charging. MS management has been caught over-charging again and again, but doesn’t stop. Monopoly rents allow for the company to fix 4 to 5 times a free market price for the line of defective products. Break the monopoly on formats or protocols and the price of computing comes way down to market levels.

    3) Malware, to include spyware and viruses, now kill over $10 000 000 000 of small business profit. Dropping MS from desktops (it’s tentative toehold in the server room is already fading) would be the functional equivalent of a $10 billion economic stimulus package, just counting the malware. Throw in damage from spam and the incentive is even greater: 40% of MS Windows machines are actively exploited by criminals for use in spam-generating botnets.

    Osama’s too hard to catch, but Bill is easy to track. Osama did his damage once, Bill has kept going and increasing the damage each year for decades. The feds could have Ballmer, Allchin and the rest of Bill’s cronies in camp X-Ray in short order along with the ringleader Bill himself.

  2. See the links said,

    October 24, 2008 at 5:52 am

    Gravatar

    Another interesting set of connections with Ireland, software, and patents is Charlie McCreevy, European Commissioner for the Internal Market and Services:

    http://en.wikipedia.org/wiki/Charlie_McCreevy

    http://wiki.ffii.org/CharlieMcCreevyEn

    http://ec.europa.eu/commission_barroso/mccreevy/index_en.htm

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