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Twitter Tax Controversy Explained In Cartoon Form 303

Posted by Roblimo from the I-left-my-bank-account-in-San-Francisco dept.
theodp writes "If you prefer to digest your news in a cartoon format, you'll be happy to know that the Twitter tax controversy has gotten the Next Media Animation TV treatment. In the NMAtv clip, Twitter co-founder Biz Stone cuts a tax break with San Francisco Mayor Ed Lee and ascends a ladder to 'Tax-Free Haven' where he's high-fived by execs from GE and Google. If you insist on reading the news, IBD has an account of the payroll tax break, which critics are calling corporate welfare." A hilarious, but true, story. Please remember, when you see 'haven' instead of 'heaven,' that English isn't everyone's first language.
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Twitter Tax Controversy Explained In Cartoon Form More

Twitter Tax Controversy Explained In Cartoon Form

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  • i think haven was a pun (Score:5, Informative)

    by retchdog ( 1319261 ) on Saturday April 09, 2011 @09:48PM (#35771616) Journal

    admittedly it's a bad pun, but would it really be surprising that the taiwanese media have a better grasp of english than slashdot editors?

    • admittedly it's a bad pun, but would it really be surprising that the taiwanese media have a better grasp of english than slashdot editors?

      It wouldn't be if you had a lower UID.

    • Re:i think haven was a pun (Score:5, Informative)

      by Asclepius99 ( 1527727 ) on Sunday April 10, 2011 @01:01AM (#35772242)
      Tax Haven isn't a pun, it's an actual term. Remember, English isn't the first language of all the /. editors.

      Tax Haven [wikipedia.org]

      • Yes it is an actual term. That's what makes it a pun rather than a misspelling. You need to watch the video. Representing a "Tax-free haven" as heaven is a visual pun. Not a funny one, admittedly.

        ("Tax-free haven" rather than "Tax haven" is a mistake though. It's like a double negative. But as the man said, English isn't their first language.)

        • Re: (Score:2)

          by arth1 ( 260657 )

          You need to watch the video.

          No, I don't.
          This is News for Nerds who presumably (a) can read and (b) value bandwidth; not just another video blog for generation ADHD.

          If slashdot added clickthrough code to the article URLs, I bet they would get an eye opener on which articles people bother reading, and which they don't.
          In fact, I'd appreciate it if /. could clearly mark articles with video as such, so all of us who browse from work where we can't easily watch videos anyhow can avoid them altogether.

          • In fact, I'd appreciate it if /. could clearly mark articles with video as such

            What part of this didn't you understand:

            ...has gotten the Next Media Animation TV treatment. In the NMAtv clip...

            (a) can read and
            (b) value bandwidth;

            a) Reading and watching video isn't an either/or.
            b) The 20th century called. They want their dial up modems back.

          • Re: (Score:2)

            by Cederic ( 9623 )

            As someone diagnosed with ADHD long before it became trendy (i.e. mid 70s) please let me assure you that the text version is preferable.

            I can and did skim-read the text version in seconds, giving me the information I wanted without slowing me down or distracting me from the other four things I'm doing.

            Watching a video would've required my full attention.

    • Re:i think haven was a pun (Score:5, Informative)

      by Jon Stone ( 1961380 ) on Sunday April 10, 2011 @03:52AM (#35772684)
      "Tax haven [wikipedia.org]" is a common term in UK English. Is the term not common in the US?

  • English audio version (Score:5, Informative)

    by mailman-zero ( 730254 ) on Saturday April 09, 2011 @09:51PM (#35771624) Homepage
    English audio for those who don't like reading subtitles. http://www.youtube.com/watch?v=Jh1evfTk58o [youtube.com]

  • Tax heaven (Score:5, Interesting)

    by pablomme ( 1270790 ) on Saturday April 09, 2011 @10:03PM (#35771668)

    Please remember, when you see 'haven' instead of 'heaven,' that English isn't everyone's first language.

    Interestingly, the expression for "tax haven" in Spanish is "paraiso fiscal" (tax heaven), which I'm pretty sure was a mistranslation in the first place. Ok, ignore the "interestingly"..

  • Fucking Bullshit (Score:5, Insightful)

    by cosm ( 1072588 ) <thecosm3@gmai l . c om> on Saturday April 09, 2011 @10:12PM (#35771706)
    I understand it's SOP, but I do think it is motherfucking bullshit that I pay a higher percentage of my income in taxes than these companies. And I guarantee my net is six to seven orders of magnitude less than what they bring in, which is probably true for most Americans as well. But its the welfare state that is bankrupting us they say!

    • The company did not pay, but the company executives foot their shares via personal income tax.

      • Except the ones that take $1 in salary and the rest out in "benefits". They don't pay much of anything.
        • I'm sure there's an American equivalent to what we have in Australia: http://en.wikipedia.org/wiki/Fringe_Benefits_Tax_(Australia) [wikipedia.org]

          • Pretty much, yeah. Any thing of value you receive from another party during the year, unless it's specifically a gift (and then that's limited to $10000) counts as "income" and is subject to taxation.

            Of course, there are different kinds of income that get taxed at different rates (for instance, bonuses and short-term capital gains get taxed the most, long-term capital gains and dividends the least, to encourage people not to speculate in the stock market). But Uncle Sugar always gets his cut.

          • Oh yes. Benefits that an employee receives are given a value and will be taxed if they exceed certain numbers that are relative to all employees. I never received enough benefits for this to be a serious issue for me. About the only time it bit me even a little was that I often took advantage of purchasing subsidized life insurance through the company, and if the subsidy was big enough I got hit up for taxes on it. The amount was reported in the W2 as I recall. (I am retired now, and it was a few years ago

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Okay, remember, that every corporation on the planet is a tax collector, never ever has one of them paid taxes. They pay taxes, out of the money that that somebody paid them. Ultimately, all of those taxes are paid by shareholders, employees, or customers (either in the lack of dividends/profits/prices, lower salary/benefits, or the cost of goods and services respectively).

      The problem you have is that you want to be ignorant of the taxes you pay. If you made every penny of tax be paid hidden from you, an

    • There are taxes paid on on every salary of every employee, including the CEO's and other exceutive's salaries, which are probably all in the highest bracket. Gains on stocks are taxed, and dividend payouts are taxed as income.

      Profits the company makes and doesn't pay out in dividends or salaries is used for company expansion. Why tax that? That's the exact problem we have in the USA, and we already have the highest corporate tax rate in the world. Of course these international companies are doing everything

      • You know another way you could increase profits for corporations? Raise the minimum income required for taxes much higher--say, to $50,000--and put the money back in the hands of the people who spend basically every penny they have. The real incentive to expand and create jobs comes from greater demand for products and services. Just cutting the taxes means, for a lot of corporations, bigger bonuses for the e-team. But if all of a sudden they get 30% more demand because their target market has 30% more

      • Re: (Score:2)

        by Macrat ( 638047 )

        There are taxes paid on on every salary of every employee, including the CEO's and other exceutive's salaries, which are probably all in the highest bracket. Gains on stocks are taxed, and dividend payouts are taxed as income.

        Wasn't it the CEO of GE who said his secretary pays a higher percentage of her salary that he does?

        There are lots of loop holes to get out of paying taxes for the rich.

      • It's used for company expansion in theory. If there is no more business to be had immediately, which is the case in my office, it's used to buy the president of the company a new vacation house in the mountains. That's how it goes at many small businesses. If your current employees can handle your workload, why hire more? As it is, I spend at least half my shift on /.
        • Well, now that property is being taxed with your employers money and there were taxes associated with its sale. I don't thinks is very fair that your company was used that way, but there is some income for the government from it. I think that a more proper way of handling that would have been to save the money for a rainy day but I guess greedy dilettante big-wigs need several houses.

    • Re:Fucking Bullshit (Score:5, Insightful)

      by corbettw ( 214229 ) on Saturday April 09, 2011 @11:31PM (#35772002) Journal

      I do think it is motherfucking bullshit that I pay a higher percentage of my income in taxes than these companies

      First off, the tax in question here is a payroll tax which comes out of the employees' salaries and stock options. So this is a good thing for workers at Twitter.

      Second, you only pay income tax on your net income. Of course, when people piss and moan about corporations "not paying their share", they only look at their gross income. Companies can have enough expenses in a year that they essentially have no or little income, and you have to keep that in mind when looking at their tax burden.

      Third, a company that is successful and hires lots of workers is going to pay into Social Security and other tax schemes through payroll taxes. So whether the corporation itself pays taxes or not, the government is still getting money from them. No one gets out of paying completely, it just doesn't happen.

      • Of course, when people piss and moan about corporations "not paying their share", they only look at their gross income.

        Really? Nobody - apart from you - is able to understand a balance sheet or a P&L statement? We are not worthy! We are not worthy!

      • Re:Fucking Bullshit (Score:4, Interesting)

        by Jah-Wren Ryel ( 80510 ) on Sunday April 10, 2011 @06:02AM (#35773020)

        That's a canard designed to appeal to the people who think they are smart but are in fact ignorant of how corporate taxes work in practice.
        Much of the time it is loopholes, not actual expenses, that result in corps "not paying their share" - double-taxation is practically a myth under the current system.

        Here's a short discussion [nathannewman.org] of the myth with a table of companies that had negative or near-zero taxes but still reported significant profits and paid significant dividends in the same year.

      • Re: (Score:3)

        by Synn ( 6288 )

        >Companies can have enough expenses in a year that they essentially have no or little income

        And if you have good accountants, this happens every year, all the time, no matter how profitable you are.

      • First off, the tax in question here is a payroll tax which comes out of the employees' salaries and stock options. So this is a good thing for workers at Twitter.

        TFS is a bit ambiguous as are all the left-leaning sites that are bouncing this around everywhere as a fine example of corporate greed.

        The workers pay a wage tax but the Payroll Expense Tax [sftreasurer.org] is an additional 1.5% tax that the company must pay on the sum of its wages for the year. It's independent of the worker wage tax.

        Sad part is, this has been in place since about 1970 - yet in 2011, even with this tax and a host of others, they're STILL in the red by 40-some million dollars a year.

        Other than the

    • Re:Fucking Bullshit (Score:5, Informative)

      by ShakaUVM ( 157947 ) on Sunday April 10, 2011 @12:34AM (#35772160) Homepage Journal

      >>I understand it's SOP, but I do think it is motherfucking bullshit that I pay a higher percentage of my income in taxes than these companies

      You know what's bullshit? San Francisco's tax laws. Combined with California's tax laws. That's why there's this controversy in the first place. They have one of the most business-unfriendly environments in the US.

      My company pays 1.5% of its profits to the state of California. You know what's bullshit about it? It's an S-Corp, so there are no profits, technically - all money passes through to the shareholders, who pay personal income tax on the money. But you get the privilege of paying 1.5% anyway, on top of the taxes you get to pay for personal income, simply because you have a corporation. If your profits are not that high, you get to pay a minimum tax of $800 anyway. Which can work out to a lot more than 1.5% of your income, if you're a small operation. Hey, that's fair, right? Mom and Pop start a $20,000/year candle business, and so California taxes them a bonus 4% for the privilege. (And people wonder why corporations are leaving the state.)

      C-Corps (that retain earnings) get to pay corporate taxes (unless you're rich enough to buy a loophole) on top of the taxes that the owners pay when they eventually draw money out of the corporation. That's double-bonus awesome, right?

      Twitter was going to be charged a bonus 1.5% taxes on all money it spent on payroll (i.e. personnel expenses), on top of all the other bullshit. That's the San Francisco Treat right there, and why they were going to move to San Jose. Twitter is big enough and famous enough to get an exemption from the SF government though. Smaller corporations just have to take it or leave. (Guess which companies are hard to relocate? That's right, small businesses.)

      Even more fun: if you're a corporation grossing over $100,000 a year, you get to pay California sales tax on all purchases of durable goods bought outside of California. (http://www.boe.ca.gov/taxprograms/usetax/index.html) How's that for being fair? And if you don't keep records for your "exemptions" (i.e. purchases from companies like Newegg that charge CA sales tax already), you get to pay sales tax twice. Lucky you, eh? Oh, and after they enroll your corporation for Use Tax, it's retroactive for the past four years, taxes and penalties due immediately.

      You're right about the corporate tax code being bullshit, but the reality isn't exactly what you think it is for anyone not rich enough to buy off the legislature.

      • Re:Fucking Bullshit (Score:5, Insightful)

        by Anonymous Coward on Sunday April 10, 2011 @01:42AM (#35772352)

        So, why did you start an S-corp if you don't like the laws governing them?

        Let me guess -- because you wanted to take any losses on your personal income tax, and gain the ability to claim things as business expenses. Seems like you're getting consideration in this deal too.

        • Re:Fucking Bullshit (Score:4, Insightful)

          by Keen Anthony ( 762006 ) on Sunday April 10, 2011 @04:00AM (#35772698)
          This should be modded up, but I'll reiterate it since the poster was an AC. The parent wanted to gain the ability to claim business expenses. Having been an S-corp myself, I know the hassle of filing quarterly taxes and then doing personal on top of it. But I still came out ahead. I love the concept of an S-corp. I love that I get business expense deductions, not to mention the limited personal liability in the advent of my company being sued. I wouldn't say California is not business friendly. Many businesses thrive in California. I will accept some alternative reasons though such as: life is hard, paying taxes is a bitch no matter where you live, things cost more in California, and my favorite the Franchise Tax Board seems to be run by incompetent monkeys that really make the experience rougher than it has to be.

          • This should be modded up, but I'll reiterate it since the poster was an AC. The parent wanted to gain the ability to claim business expenses. Having been an S-corp myself, I know the hassle of filing quarterly taxes and then doing personal on top of it. But I still came out ahead. I love the concept of an S-corp. I love that I get business expense deductions, not to mention the limited personal liability in the advent of my company being sued. I wouldn't say California is not business friendly. Many busines

      • Re: (Score:2)

        by forand ( 530402 )
        I believe that there is an error in your post. The shareholders pay capitol gains taxes on the money which passes to them. Capitol gains taxes are significantly lower than income taxes.

        That being said I am all for the removal of BOTH corporate and capitol gains taxes in favor of income taxes alone. In general I think people are far less effective than corporations at lobbying for tax loop holes for themselves.

        • >>I believe that there is an error in your post. The shareholders pay capitol gains taxes on the money which passes to them. Capitol gains taxes are significantly lower than income taxes.

          What was the error? The problem with C-corps is exactly the problem of double taxation. It's why we incorporated as an S-Corp. I didn't specify which taxes were paid in each case.

          >>That being said I am all for the removal of BOTH corporate and capitol gains taxes in favor of income taxes alone.

          Short term ( 1 yea

  • Roblimo isn't a native English speaker? (Score:5, Informative)

    by MartinSchou ( 1360093 ) on Saturday April 09, 2011 @10:24PM (#35771748)

    Seriously?

    Please remember, when you see 'haven' instead of 'heaven,' that English isn't everyone's first language.

    What the fuck? Now you're mocking people for using the term "haven"? A perfectly acceptable word when talking about tax-free locations.

    Dictionary.com definition of "haven"

    ha ven [hey-vuhn]

    -noun
    1. a harbor or port.
    2. any place of shelter and safety; refuge; asylum.

    -verb (used with object)
    3. to shelter, as in a haven.

    Now, as a person for whom English is his 3rd language, allow me to dumb down my judgment of Roblimo's IQ and knowledge of English to a level that even he should be able to understand, despite it having three syllables: Imbecile [wikipedia.org].

    You may also want to look up the term "walking on cloud nine".

    • I was thinking almost exactly the same thing, except I am a native English speaker.

      I've never heard a tax haven described as anything but a tax haven because that's what its called.

      Tax heaven lol. Sigh.

    • Re: (Score:3)

      by hldn ( 1085833 )

      he made the comment about tax haven because in the scene with the sign that says "tax-free haven" the execs are climbing up into the clouds, implying a "tax-free heaven." obviously the tax haven is the correct usage, but the question posed is if the video creator knew that haven and heaven do not have the same meaning.

      whether this is a pun or a mistake on the part of a non native english speaker is not certain.

      • Re:Roblimo isn't a native English speaker? (Score:4, Insightful)

        by Paul Jakma ( 2677 ) on Saturday April 09, 2011 @10:58PM (#35771884) Homepage Journal

        It's quite obviously a visual pun on "haven" (the normal and correct term used in "tax haven") and "heaven". Which makes it clear that either Roblimo is being super-ultra-ironic, or he has failed to realise that the cartoon authors have a better grasp of english than himself.

      • I saw the video. Yes, the character climbs a ladder up to what I saw as "cloud nine" which has a tax haven. That's why I mentioned cloud nine in my comment.

        I can't really ask this question without sounding like I'm trying to offend you personally, but that isn't the point. But I can't really tell if I'm really really smart or if the general public is ignorant.

    • Re: (Score:2)

      by jez9999 ( 618189 )

      Now, as a person for whom English is his 3rd language, allow me to dumb down my judgment of Roblimo's IQ and knowledge of English to a level that even he should be able to understand, despite it having three syllables: Imbecile.

      You mean, 'despite its having three syllables'. :-D

  • When I watched this my head nearly exploded. The mayor had to do what he had to do to keep Twitter in his city. Consider this: if they had just let Twitter move somewhere else, lots of jobs would be terminated. These are all employees who live in the city, purchase things and pay sales tax, pay income taxes and a whole host of other taxes levied. All of the equipment, much of which is probably purchased locally, would be purchased elsewhere. Contractors who service their equipment would have fewer clients,

    • What's more, for those that didn't RTFA

      There's a catch, but it's not burdensome. Twitter will have to set up shop, a few blocks away from its current quarters, in a depressed neighborhood that the city wants to revive. Other firms can get the same tax advantage if they move to the same area.

      Sure, Twitter were big enough to make this happen, but other companies can now take advantage of this tax break as well.
      What is likely to cost SF more - the $22M over 6 years (which, on a budget the size of SF's is aroun

    • Re: (Score:3)

      by micheas ( 231635 )

      They were threatening to move to Brisbane (about five miles away) , It would not have resulted in a significant amount of employees moving.

      This is penny wise pound foolish move on the part of the Board of Supervisors. They are trying to save $18 million a year in tax revenue from twitter. When all is said and done this will cost the city about $100 million when all the fallout is factored into it.

      The building twitter is moving into was just bought by the Shorenstein Group, a politically connected real estat

  • "maybe not paying taxes is a sign that you've made it as a company in the US."

    Made me chuckle coming from China. Somebody over there must have had a good sense of humour for that one

  • WTF? (Score:2)

    by sjwt ( 161428 )

    WTF?
    Lets see, google "Tax free haven" and "Tax free heaven", just over 8million for the former and just under 3 million for the latter. Maybe someone needs lay off the pills.

  • It is worth considering just WHY the blighted area they locate the company into will begin to prosper. Employees of the company itself will, by and large, still prefer to commute, at least until the slum their company is located in gets rehabbed. The rehabbing will start when the taxes the company pays begin to filter into the surrounding area's infrastructure: after all, the drug lords and gangbangers aren't going away until that part of the town begins fielding policemen. The yuppies won't come until they

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