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Tax consequences of WIN95 team members keeping a piece of software for testing

devblogs.microsoft.com

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Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#101

Post by TheNewsIsHere »

CoastalCoder wrote: post #85
cqqxo4zV46cp wrote: post #78

Earlier quoted context omitted.

It’s not a moral dilemma. You are a just acting like an engineer looking for black and white answers in the face of real-world muddiness.

> It’s not a moral dilemma. Perhaps it wasn't clearly articulated, but I see some moral dilemmas here. 1) Competing goods: obeying the law (civic virtue; collectivism) vs. personal happiness (hedonism; individualism). 2) Competing concepts of civic virtue regarding laws that won't be enforced: Is it better to (a) vigorously oppose such systems, because e.g. they lay the groundwork for tyranny, or (b) accept that some…

I wholeheartedly agree with both of you.

On the one hand, you could argue that taking advantage of the IRS deciding not to bother with air miles is wrong.

On the other hand, if you decided to include air miles as taxable on your return, you might be obeying the letter of the law.

This reminds me of the central plot point of The Good Place, which I won’t spoil here, but will paraphrase indirectly: “at what point (if any) is it acceptable to stop considering the second- and higher-order consequences of our actions or inactions?”

I tend to hew toward your 2(b). If even the IRS isn’t going to bother, why would I if it won’t meaningfully matter?

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#102

Post by [deleted] »

kazinator wrote: post #7

What does it mean to "keep" the software? You can return the installation media, and say you erased the program, without having erased it. I would say that if you work for Microsoft and they give you a program free in order to test, then it's not a form of income. The program doesn't represent monetary value in that situation. Microsoft, the copyright holder, is licensing you to have a copy of that program under term…

[deleted]

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#103

Post by apelapan »

kazinator wrote: post #26
bjornsing wrote: post #21

Earlier quoted context omitted.

This sounds surprisingly logical to me as a Swede. Here you can be taxed for income even if you didn’t receive anything at all. Take for instance a company office with a canteen exclusively for employees. Let’s say the canteen charges 20% under market price for a meal. In that case the employees can be taxed for having access to that canteen, even if they don’t eat there. This access is considered a taxable income.

Just because it happens in Sweden and you're a Swede doesn't have to make it logical to you.

It is very common for Swedes to not fully and properly understand the general logic and mechanisms of our tax system.

The general principles in play are that

1) any benefit is taxed according to its equivalent cash value. (How much money would the employee need to pay to get an equivalent thing, if they paid out of pocket and without any cooperation of the employer)

2) A benefit "occurs" by being granted, not by being consumed.

In the cateen situation there is also a special simplification rule in play, where a generic cash value is defined each year for breakfast, lunch and dinner that is to be used as basis for taxation (almost) no matter what the actual costs for the meal is.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#106

Post by kazinator »

bombcar wrote: post #67
michaelt wrote: post #38

Earlier quoted context omitted.

> Microsoft, the copyright holder, is licensing you to have a copy of that program under terms which do not involve exchange of money. As I recall, this anecdote is part of a larger story: * This was at a time where it was common to buy software in retail stores, it would come in a fancy cardboard box with a stack of floppy disks (or a CD-ROM), a printed manual, a warranty card you could mail in, and so on. * Microso…

It’s exactly that - the IRS doesn’t want people bypassing taxes via weird gift freebie methods. So if it’s not much and it’s not regular, they don’t really care.

Because the state wants people's wealth to be like a bar of soap; every time it changes hands, a little comes off. During one year, the same dollar might circulate, becoming part of twelve people's income. The state gets a slice from each one, even though it's the same dollar.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#107

Post by kazinator »

tux3 wrote: post #58
mdekkers wrote: post #37

Earlier quoted context omitted.

No coercion? Try not paying it.

Right. But this position applies equally to all taxes. So that's a general "taxation is theft" type position. Which is fine in general, just not specific to this particular tax.

The percentage of a nonzero tax off a zero amount is staggering though.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#108

Post by dpifke »

criddell wrote: post #61

The tax question I've always had is around conferences. If I attend a work-related conference in California, I'm being paid to be there and so that's California sourced income and I have to file taxes, right? During the pandemic when everybody was working from home, I thought about renting some place with more interesting scenery for a few weeks. I mentioned it to my bosses and was given a very short list of places w…

Yes, if you are physically working even one day in California in a given year, the Franchise Tax Board expects you to file a non-resident tax return. (How enforceable this is will depend on your other ties to the state and your personal risk tolerance.)

At one point, California and New York were unique in this, but I believe the practice has spread to other states, especially as a result of remote work becoming more widespread.

The relevant case (from 1989) is https://caselaw.findlaw.com/court/ca-court-of-appeal/1772838....

Edit to add: as someone who moved out of California 10 years ago, I've been advised by a professional to basically continue filing a non-resident return forever. If I file a return that says 0 days in state and $0 owed, the FTB has a statutory time limit to contest that assertion. If I don't file anything, they claim they have an indefinite lookback period.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#109

Post by kazinator »

tux3 wrote: post #76
mdekkers wrote: post #75

Earlier quoted context omitted.

I don’t believe all taxes are equal, or bad. But some are terrible, such as this one.

I agree this one is terrible, but I don't think it's because this one is racketeering. If we think this tax is a racket, we should equally think that all taxes are a racket. That's because your "Try not paying it" argument applies to all taxes. If we think this tax is uniquely bad, there should be another reason that it's bad. Which is my point.

It depends on the interest rate. A 5% interest may be a legitimate loan; 70% interest is in the territory of loan sharking.

Re: Tax consequences of WIN95 team members keeping a piece of software for testing

#110

Post by wpietri »

paxys wrote: post #14
wpietri wrote: post #5

Huh. I would argue that the software remained the property of Microsoft, and so there were no tax consequences. Presumably if the Windows 95 development manager said, a year later, "Hey guys, time to give all that stuff back," they would. It's just that nobody asked for it.

The linked post has more details. It was an explicit "you test the software and get to keep it for yourself after that".

Ah, I missed that part. Thanks!
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