By Alec Meer on March 6th, 2013 at 6:00 pm.
The amount of money a game/software developer makes shouldn’t really be the first thing you say about them, but sometimes you’ve got to make an exception. For instance, Garry’s Mod developer Garry Newman, who recently revealed that his physics-abusing, face-mutilating Half-Life 2 mod has brought in $22 million to date. It’s about time he and Notch had a riches-off, I think. While I don’t think anyone could claim he’s not in the Sickeningly Wealthy bracket, he does claim that the lion’s share of this doesn’t reach the Gmod team’s gold-lined pockets.
“Over 7 years GMod has made about 22 million dollars,” he revealed in a community Q&A. “We get less than half of that though” – which I would imagine refers to the tithe Valve take as Gmod essentially depends on their engine and characters. Valve exist in a place far beyond Sickeningly Wealthy, needless to say. “Then the tax man gets a bunch of that. Then when we take money out of the company the tax man gets a bunch of that too.”
Good lord man, get a better accountant. I’m pretty sure you can afford it.
So that’s the wringing of hands and weeping at the cruelty of the universe out of the way. More importantly, what’s next for Garry and his team?
“Hopefully we’re gonna get the Linux version out. Then hopefully we’ll move to SteamPipe, and I’ll get the NextBot stuff hooked up.. then I want to do another Gamemode Contest. But I want to knock out a bunch of gamemode creating tutorials first to help people get their foot in the door.” Fine, fine – but bigger than that is the reveal that “We are starting work on a new PC game.” Hmm!
Given we know how the guy has a fair few resources to call upon, this could be something really, really big. He’s not giving any details yet though, bar “It’s a game I’ve wanted to start work on for ages.”
Good luck, sir. And do please spend your infinite money wisely.
06/03/2013 at 18:05 Aerothorn says:
Has it ever occurred to this guy that the tax auditor might be female? Let’s not be gender normative, dude.
06/03/2013 at 18:08 angramainyu says:
Your mother is gender normative.
06/03/2013 at 18:12 gulag says:
That just took it to the next level. For one brief moment the Internet has a King.
06/03/2013 at 19:50 The Random One says:
HOW DO YOU KNOW SHE’S NOT A QUEEN
(Although the Internet King does have a series of duties and obligations, while the Internet Queen is merely a figurehead. That’s because Internet Monarchy is based on US Hobo Monarchy almost on its entirety. Little known fact there.)
07/03/2013 at 01:32 return0 says:
Because it’s the internet. The men are men, the women are men, and the children are FBI agents (who may or may not be men). Since the TOS of this commenting system requires you to be at least 13 or older (I think, too lazy to look it up), obviously we’re all men here.
06/03/2013 at 18:18 Aerothorn says:
I dunno. Let’s have a long discussion about the social definition of “mother” and whether this can be applied to men!
06/03/2013 at 18:53 AraxisHT says:
It can’t. The term “Mother” is strictly female. However, the term “Surrogate Mother” can apply to non-females.
06/03/2013 at 19:02 Sheng-ji says:
Misandry!
06/03/2013 at 19:17 Sc0r says:
Misandry!
http://i.imgur.com/RgB2T5s.gif
/lol
06/03/2013 at 20:26 Dr I am a Doctor says:
Fuck this guy from the gif forever, it’s always funny when you aren’t the guy who has to clean sticky liquids
06/03/2013 at 21:40 Droopy The Dog says:
Hit on hard times after that doctorate huh?
06/03/2013 at 19:24 x1501 says:
To avoid making people uncomfortable by your sexist anachronisms, just use gender-neutral “Father-Mother”.
06/03/2013 at 19:39 Flavors says:
placing “father” first prevents total gender neutrality
06/03/2013 at 19:52 DeVadder says:
If there only was a single word including exactly those two!
Maybe we can use parent?
06/03/2013 at 21:04 DerNebel says:
I played Zeno Clash and so should you.
That should teach you not to say Father-Mother and just use parent. Also, it’s a really fun game with lots of punching. We like punching. Especially if said punching is really satisfying and/or directed at weird, imaginative enemies. Zeno Clash does not disappoint in either aspect.
You might want to do you own voice-acting though.
Also, I support the use of “mother” when talking about a female parent and “father” when we are talking about a male one. “Mom” and “dad” are acceptable shorthands, “ma” is okay as well, if only because of the Dylan song and I really like pumpkin.
06/03/2013 at 21:42 Droopy The Dog says:
Fomather, problem solved.
07/03/2013 at 00:02 Continuity says:
Or…. we could just not care? … maybe?
07/03/2013 at 03:58 Geen says:
Comment of the day, all bets are off, this magnificent fellow has won.
06/03/2013 at 18:22 Hoaxfish says:
If it was female, it’d be a taxmaness obviously
06/03/2013 at 18:39 roryok says:
taxwench
06/03/2013 at 19:35 tobias says:
I guwaffed.
07/03/2013 at 02:42 MrLebanon says:
i gizdazzled
06/03/2013 at 18:38 Giuseppe says:
You tell ‘em, person!
06/03/2013 at 19:04 Aerothorn says:
I feel like my tongue-in-cheekness was not properly conveyed.
06/03/2013 at 19:16 Giuseppe says:
Apparently neither was mine :))
06/03/2013 at 19:34 rustybroomhandle says:
This is much funnier as a serious debate.
13/05/2013 at 20:06 Belsameth says:
Yes, getting all of a man’s money has always been more of a woman thing…
06/03/2013 at 18:06 Crimsoneer says:
RPS CONDONES TAX EVASION.
06/03/2013 at 18:23 Theodoric says:
It’s called ‘tax avoidance’ when it’s legal. And yeah, taxes can add up quickly in scenarios like these.
And yes, I’m calling the Valve tithe a ‘tax’, in the broadest sense of the word. That’s maybe indicative of the role it plays in PC-gaming (or Source-Engine-based gaming), I don’t know.
06/03/2013 at 19:51 The Random One says:
Press X to dodge tax
06/03/2013 at 20:09 TechnicalBen says:
There is being efficient with your money. If it turns our ham sandwiches are taxed heavy because beef is in shortage (or whatever), then buying chicken sandwiches and pocketing the savings is not “evasion”.
06/03/2013 at 23:46 Tukuturi says:
The lunchmeat market is so complicated.
06/03/2013 at 18:07 InternetBatman says:
My heart bleeds for his loses.
06/03/2013 at 18:10 FriendlyFire says:
He shouldn’t be making such a face.
06/03/2013 at 20:40 hypercrisis says:
I feel ya, the poor scamp only gets 15 million or so, life must be hard for him
06/03/2013 at 22:12 Felixader says:
Whisper: Psst, less than half of 22 Million is not 15 Million.
08/03/2013 at 12:05 jrodman says:
Oh, you think you can boss us around RULES OF NUMBERS. Well, how about I punch you RIGHT IN THE FACE… *mathematics*?? Who’d feel so smart then?
06/03/2013 at 22:26 dmoe says:
I can count to asparagus.
06/03/2013 at 18:09 Stevostin says:
“Given we know how the guy has a fair few resources to call upon, ”
Not that much really. it’s maybe a bit more than one million a year. Maybe he has 2 millions to throw as investment if he hasn’t already spend them in a house. That being said, he can fund it on present sales. But I wouldn’t expect AAA. Not even AA.
06/03/2013 at 19:13 Bhazor says:
Oh man I hope he can afford AA. Alcoholism is a tragic illness.
06/03/2013 at 18:18 x1501 says:
Um, how does getting less than than 50% of $22 million and paying no more (and probably much less) than 30-35% of it in taxes warrant “Garry’s Mod Earns $22m, Gives Most Of It To The Taxman”, exactly? Someone here is in dire need of an abacus.
06/03/2013 at 18:37 darkChozo says:
Theodore Taxman is the head of licensing at Valve, duh.
06/03/2013 at 19:36 tobias says:
Theodore Taxman (pictured)
06/03/2013 at 18:38 frightlever says:
Let’s say Steam takes a third. Garry Newman is based in the UK so he could be getting hit with US and UK taxes. Then to take the money out of the company he gets taxed again, probably as a dividend at 42.5%.
So 24% tax taken off the original 66% (or possibly 34% is US tax rates apply – I dunno) is 16% for the taxman and 50% left for the company . Then to get it out of the company 42.5% of the 50% left is 21.25% for the taxman and 28.75% for Garry.
Tax 16%+21.25 = 37.25%
Steam: 33%
Garry: 28.75%
So the taxman gets the largest proportion, Unless you’re stuffing your pension (less so these days) or running foreign depots for tax purposes there aren’t that many cunning tricks to get out of paying tax. You’d hope to keep the money in the business until you can flog it and qualify for entrepreneurial relief on the capital gains.
06/03/2013 at 18:50 El Stevo says:
Remember that he’s using Valve’s assets and engine, so the cut to Valve will probably be more than for other things distributed on Steam.
06/03/2013 at 18:52 darkChozo says:
The article indicates that they only see half the revenue before taxes, probably due to retailing + licensing fees (~30% to Valve for Steam listing, the rest to Valve for Source engine + game assets, possibly a bit to any other paid third party libraries). So, unless they’re being taxed on the revenue going to expenses, most of the lost money is going to Valve (+ maybe others) by definition.
06/03/2013 at 19:11 x1501 says:
Aside from the patently flawed assumption that all of the money was taxed (in part twice) without any of it being written off as business or other deductible expenses, you’re also assuming that none of the involved companies used a single tax loophole whatsoever—and that’s just crazy.
06/03/2013 at 19:53 The Random One says:
The article seems to imply that Valve takes its cut before taxes, though. That doesn’t sound right, but that’s what it’s implying.
06/03/2013 at 20:13 frightlever says:
Well yeah. Valve would pay tax on the revenue from the royalty. But if Gmod earns a thousand dollars, the amount that Valve charge is THEIR revenue and the amount left for Garry’s company is HIS revenue. Then Garry’s company and Valve are separately taxed on their income.
Re: tax loopholes – they don’t legitimately exist for the kind of revenue we’re talking here. Valve have loopholes they can exploit, I’m sure, Garry not so much. Short of outright tax evasion there isn’t much regular business folk can do to shield their money from the taxman in the UK. And the UK also has the double dipping where corporation tax is taken and then dividend or income tax on top of that if you want to actually move the money out of the company. First world problems etc etc.
And yeah I simplified a lot and made assumptions but my point is, the tax man really does okay out of Gmod.
07/03/2013 at 00:48 drewski says:
You do get a 10% tax credit, though. (yay)
06/03/2013 at 20:03 HadToLogin says:
Some time ago I read that when you want to sell something made using Valve stuff, it’s 70-30 for Valve.
06/03/2013 at 18:21 solidsquid says:
So what, the problem is that he has to give a cut to Valve for using their engine, his company has to give a cut of it’s profits to the tax man in income and he has to give a portion of the wage he takes from his company to the tax man? How is this any different to any other company? Even if each stage involves 30% of the income being taken from them, they still made over $7 million, and it’d be over $10 million if they weren’t using an LLC (in fact it’s probably more than either of these, as I’m pretty sure companies don’t pay 30% tax)
06/03/2013 at 18:28 Malawi Frontier Guard says:
RPS should make a feature listing all the other companies that pay their taxes.
06/03/2013 at 18:35 Baines says:
The biggest difference is that other companies probably pay their accountants enough to reduce what they pay in taxes.
But mostly it seems like the guy was just trying to say “GMod made $22 million, but don’t assume it means we are all Mojang wealthy now. The people involved only see a fraction of that money, because Valve and taxes consume a large portion of the proceeds.”
06/03/2013 at 20:15 frightlever says:
It’s 22 million dollars over almost a decade. Clearly it’s a nice bundle, taxes and all, but this isn’t footballer money we’re talking.
06/03/2013 at 18:22 SkittleDiddler says:
Couldn’t have happened to a nicer guy…
06/03/2013 at 18:23 zachforrest says:
so the story here is Garry earns a good living while fulfilling his duties to society. good.
06/03/2013 at 18:26 Shantara says:
The way this guy was talking, I expected he was going to ask for donations by the end of the paragraph.
06/03/2013 at 18:26 Hoaxfish says:
cue the kickstarter
06/03/2013 at 18:27 skalpadda says:
Wouldn’t be much of a riches-off, given Notch apparently made a staggering 101 million dollars, personally, in 2012 alone. Crikey.
06/03/2013 at 18:31 RedViv says:
I remember the Humble Indie Bundle 2, and I get the warm fuzzy feeling back that I experienced when Notch and Garry entered that silly-but-charitable bidding war.
I really don’t mind good people having good money.
06/03/2013 at 19:04 Sheng-ji says:
I couldn’t agree more!
06/03/2013 at 18:31 MattyFTM says:
If you earn $22 million, you can afford to pay a good chunk of it to the taxman, and you should pay a good chunk of it to the taxman. It’s $22 million for gods sake!!!
06/03/2013 at 18:40 Blackcompany says:
Yes. Its $22 million. And it belongs to those who earned it. Sure they should contribute to society. But claiming they should pay in the majority of their earnings is hardly fair.
06/03/2013 at 18:54 jalf says:
1. Why exactly is that “not fair”? How exactly do you compute this “fairness”? Who should pay the difference if he got taxed less, in order to make it “fair”?
2. I am pretty certain that he pays less than 50% of this figure in taxes. The “most of it” seems to include the ~30% Valve takes.
3. The company has earned 22 million. The company has paid less than 50% in taxes. So is there a problem, really?
4. Do you seriously think that the US would be better off with lower tax rates? (I’m assuming you’re in the US and are talking about the US, due to your other comment about the US “punishing success”.)
5. Are you aware that said tax rates are at an all time low?
06/03/2013 at 19:52 InternetBatman says:
The definition of fair that people who need to be concerned with is that everyone gets what they need. You can argue that it’s not just; the law (in this case taxation) does not apply equally to the earnings of everyone.
The counterpoint is that the law is just, because anyone who made a certain amount of money would be taxed equally.
You can argue that it’s inefficient, because someone who created something is not allowed access to the largest possible amount of resources. But record highs on Wall Street and global recession elsewhere seem to argue that either a concentration of resources does not automatically lead to increased creation, or that there is more to the economy than just efficiency.
If a bunch of people were stuck in a liferaft after their boat sank, were rationing resources, and one of them was a diabetic:
The fair thing would be to give the diabetic insulin when he needed it. After that, he might need a small amount of extra food to maintain blood-sugar after his insulin gave out.
The just thing would be to distribute insulin equally among the survivors at reduced rations.
The efficient thing to do would be to overwork the diabetic on the oars so he was close to death already when he ran out of insulin. The remaining survivors could feast on him as he slipped into a coma. Work would be maximized, and the boat would be faster as the remaining castaways defecated.
06/03/2013 at 21:26 Hungry Like the Wholphin says:
Or the definition of fair is that everyone has the same obligations.
06/03/2013 at 22:27 Josh W says:
That covers everything that the rule of law covers:
Eg, “everyone has the obligation to pay a varying amount of their income in tax, depending on what that income is, no matter if you’re the king or a normal citizen.”
or “everyone must pay a constant £7000 to pay for government and infrastructure regardless of income”
or “everyone has to chop off their feet”.
06/03/2013 at 18:54 DickSocrates says:
Wars have to be paid for somehow. And if you tax the poor any further they’ll all die out and you end up getting no money from them at all that way.
06/03/2013 at 19:12 LionsPhil says:
All that military spending is vital to protect MUH FREEDUMS.
06/03/2013 at 19:18 Blackcompany says:
For the record I agree with all Bush’s wars no more than Obama’s deploying troops & aircraft. Don’t make assumptions about my party affiliation, which is Libertarian btw.
Taxes are fine. Increasibg them so you can waste even more money maintaining status quo is not.
06/03/2013 at 19:38 AngoraFish says:
We can’t let the poor die out, otherwise there’d be no one to fight the wars.
06/03/2013 at 19:34 Text_Fish says:
They wouldn’t have made a cent if they weren’t part of a larger society with a complex and expensive infrastructure that can only function with regular and reliable injections of capital.
06/03/2013 at 21:27 Hungry Like the Wholphin says:
Is society the very same as government?
Hint… society doesn’t collect taxes.
06/03/2013 at 22:13 Text_Fish says:
Our society relies on a governing body to collect taxes and allocate spending. That is a key principle in our society.
07/03/2013 at 00:55 drewski says:
The kind of society the majority of people want – police, fire departments, safety regulations, conservation, courts, roads, telecommunications, free or subsidised education and health, welfare safety nets, publically funded infrastructure to ensure services where the market is insufficiently profitable, labour protection, corporate regulation – does require a government, which requires taxes.
Society itself doesn’t collect taxes, but the things society demands require taxes to be collected.
07/03/2013 at 02:30 gwathdring says:
@ Hungry
Society does too collect taxes.
A few minor clarifications: 1) Our governments are contained within our society, not without it. 2) Societies have costs; be it art portrait or federal highway, it costs resources and someone has to pay for them. 3) Most modern societies are built around interlocking nation-states with complicated economic support systems. 4) Those economic support systems rely on relatively standardized exchanges of currency. 5) Some of those are taxes.
Governments aren’t a weird species of alien overlord. They are institutions occupied by individuals who are part of society at large. Those institutions have costs. We put resources in (including the aforementioned people) and get services, resources and organizational assistance out. Large scale societies require large scale structural supports, many of which are inherently complicated by the scale at which they operate. If we’re content to live smaller scale lives, we can afford simpler forms of organization … but at the end of the day, if you want to live in a world where you can know about the other side of the world, communicate with it, and get stuff from it … you need some fairly advanced organization in your society.
Taxes are essential to our broad economic structure. Unless we want to re-work global economics from the bottom up (or, worse, top-down), we’re going to have to live with the most generic facets of our economic and political regimes. That means taxes are here to stay.
Even in smaller organizational schemes, the resources need to come from somewhere. And, guess what? Because societies are made up of individuals, individuals are going to eventually have to supply resources to keep society functioning. Some of those resources go into a part of the society collectively thought of as government. Some of that will be taxes.
06/03/2013 at 19:12 mickygor says:
Show me where I willingly signed a social contract and perhaps I’ll agree.
06/03/2013 at 19:34 RobF says:
If you ever have an accident and someone has to scrape you off the ground, let’s hope they don’t ask the same question before deigning to do so, eh?
06/03/2013 at 19:36 Text_Fish says:
Actually I hope they do.
06/03/2013 at 19:45 JFS says:
Me too.
06/03/2013 at 22:28 Josh W says:
Meanies.
07/03/2013 at 01:21 mickygor says:
Assuming I’ve paid them (at that point, prior through insurance, whatever), the contract would be between me and them, not society.
07/03/2013 at 06:58 RobF says:
I bet the chat the nurses had about whether to help your head fall out of your mum’s vagina was amazing. “Did we sign a social contract to do this?” “No? Best leave him up there then”.
07/03/2013 at 09:33 mickygor says:
That would be my mother’s concern.
06/03/2013 at 19:50 Tatourmi says:
When did you have to sign a social contract? ;)
For Hobbes, you don’t sign it. When living in a society you are forced into submission by the ALMIGHTY LEVIATHAN. (Which does not care for your squishiness. Not one bit.) He exists therefore you are fucked. You can always go back to your natural state though and wage war on everyone else.
For Rousseau you don’t ever sign the social contract. Or rather you always sign it. You just permanently will it into existence, with the power of FREEDUM as you feel you are part of the whole. You can sign it if you wish, but that is nothing more than a ritual. And an impossible one at that.
Even for the two more “minor” theoricians of the contract I know of, Grotius and Locke, the contrat doesn’t really exist. It is a fiction designed to help build a theory of the state and its goals. What is legitimate and what is not. You don’t sign it. You accept the state or you refuse it.
And in the real world of non-philosophy you can refuse the laws of the land (At least I can in my land and I’d guess that it is kind of universal) and go somewhere else, refuse your nationality and become an apatrid. Good luck with that I guess.
06/03/2013 at 20:18 Dervish says:
People willingly submit to the leviathan to get out of the state of nature.
06/03/2013 at 19:55 Nick says:
own the land you are on, the telephone/electrical infastructure you use to access the internet, have your own water and general plumbing/sewage system built and maintained out of your own pocket, fly through the air on your way anywhere to avoid using roads, or built and maintained your own transportation infastructure, do you?
06/03/2013 at 20:46 mickygor says:
No, but I’d gladly pay for what I need on a voluntary basis
06/03/2013 at 21:08 Text_Fish says:
What a brilliant idea. Now you just need to invent a magical system to measure the exact percentage of road-wear each individual is responsible for and find a cost-effective way to send each of them an itemized bill so that they can decide whether or not they feel like paying their way this time.
Once that problem’s solved maybe you could cure cancer and establish world peace.
06/03/2013 at 21:36 mickygor says:
Alternatively, I’d pay what the owner of the road charged me to use it. You know, like how other private transactions occur.
06/03/2013 at 22:10 Text_Fish says:
So you think the road owners could find a sufficiently cost-effective way to record and process that transaction that would mean they didn’t end up having to charge you MORE than you currently pay in order to make a profit themselves?
06/03/2013 at 22:14 Zephro says:
Does this mean you also want all public streets to be toll streets? For the police to refuse to investigate a crime until you pay them? The fire brigade to refuse to put out a fire unless you nip back in and fetch your wallet?
06/03/2013 at 22:28 Muzman says:
Picture fifty years hence when all the private road owners have conglomerized into one or two big road monopolists, floated, bungled maintenence once or twice, seen charges creep up to maintain a high share price, cut back on service and staff at the bottom end to maintain a high share price until disrepair is rampant. The public and business, unable to choose a “different road provider”, sue and or demand compensation for damage and delays (mere externalities to ‘the company’) and meanwhile the comapnies main business has quietly become reinvesting all the cash they make into Greece and/or “bad loans grouped together” and, whoops, is worthless. So the government must step in with public money to either bail out the company/assume control of it for a time or buy back Britain’s roads.
Better to just skip to the end.
(although, Libertarians can manage to find a way to blame every single aspect of that on Big Government. Which is pretty funny).
07/03/2013 at 01:01 drewski says:
A true libertarian would look at all that happening, up to the point of government intervention, then say “let’s see what happens next”.
07/03/2013 at 01:47 mickygor says:
I’m not entirely inclined to let the government intervene (I can’t even decide if I’m minarchist or anarcho-capitalist yet). If people stay so blind to their power that corporations arise in the absense of corporatism, they deserve to be stripped of their wealth. What’s more, in a world where tax is recognised as theft, the government would be incapable of stepping in and sorting things out, since the concept of “public money” wouldn’t exist. I’d say let charity step in, but I’d imagine that all the people that would have been donating their money to charity instead spent it bowing to pressure from road owners.
07/03/2013 at 04:27 PikaBot says:
And of course, you would be one of the beneficiaries of this technocratic anarchy, rather than one of the poor schlubs getting screwed, you badass, you.
Adults are talking, kid. Take a hike.
07/03/2013 at 09:34 mickygor says:
I don’t particularly care what I would be, so long as I would be free.
07/03/2013 at 18:46 gwathdring says:
I’m confused as to why you think the government is special and magic.
If the government controls certain land, services, etc and requires that you pay for them, how is that fundamentally different from a corporation doing the same? I suppose the difference is one of monopoly, but I hope that careful study of periods and places after the birth of the corporation but with little government regulation will show you just how much more problematic private monopolies can be.
I suppose the primary difference is that you never get a chance to decline services by line-item and no when asked you when you were 30 seconds old whether or not you’d like to subscribe to Canada, France, Japan the US, International Waters, or whatever. Trouble is … your parents had already subscribed and you weren’t considered a full-scale citizen with full rights at the time nor were you cognitively capable of giving an answer.
In theory, you can choose to go somewhere else once you’re old enough. They have to agree to accept you as a client, and you have to fill out paper-work and pay the airlines to take you there and so forth and so forth.
We’ve divided the world up into territory controlled by nation-states. There’s no where to go without owing someone something, or as good as no-where. It’s unrealistic for anyone to ask you when you’re born where you’d like to be, and a society that doesn’t expect anything of it’s younger citizens would very quickly fall apart. Consent isn’t practical or possible when we’re talking about global governing systems. It’s an imperfect system, but the subscription based, everything-is-a-private-commodity system sucks a lot more by my reckoning. I’ve been screwed over a lot more awfully by private commodity systems then I have by pubic commodity and public service systems, but perhaps you’ve had a different experience.
The clincher, for me, is this: governments aren’t separate. They’re part of society. They’re no less connected to us then corporations and other associations of people. In many of the world’s nation-states … those governments draw from a (historically speaking) remarkably broad swath of the populace. It isn’t as though the government has a vested interest in “keeping you down” for the most generic case of “you.” Rather, the government has a vested interest in looking after “you” for the most generic case of you. Individuals in government have vested interest in a billion different things, but the same can be said of your private corporations and your self-employed highway owner and so on. Greed isn’t going anywhere, nor is abuse, nor is paying for things, nor is unfairness.
For this discussion to be productive, we need to stop writing off corporations and governments as these personified, greedy, evil, scheming abusers. And stop pretending that broader, looser, self-organization and subscription systems have any practicality whatsoever on large scales. If we’re thinking about shrinking states (as in nation-state) down to smaller than the average US state (as in province), then maybe we can start revisiting the incorporate-everything idea … but with the well known instability of private markets, large scale subscription systems sound rather chaotic.
I suppose we can throw the buzz-word freedom around and make it all worthwhile, right?
P.S. The nice thing about taxation over subscription is that the burden on everyone is reduced. Most people need to use roads at some point. While some use them much more frequently, if we only charged those people or charged them in a directly proportional fashion, it might become unsustainable very quickly. Taxing everyone allows us to make sure that a very small proportion of your income goes specifically towards roads … but that collectively, it’s enough to pay for the roads.
Also, consider the tyranny of subscriptions for a moment. Of a sudden, rather than being expected to pay a relatively stable tax for a large number of services, I have to personally vet every potential road I might use, every service I might need, and then shop around. The paralysis of that much “freedom” and the perils of making the wrong choices would make society considerably less pleasant. Consider, too, the hidden costs.
Let’s say people drive a long way to work at Boeing. Boeing produces some very important vehicles that a lot of people use. If we start charging the workers at Boeing more for their long commutes than the workers at our local coffee shops for their short commutes … we’re adding unnecessary costs to essential jobs. If we tax everyone equally for the roads, we aren’t discouraging any one type of job in particular on the basis of road taxes alone.
Now, that’s a poor example because it might be desirable for us to reduce commuting distances. But we could go through a similar exercise by replacing many items of tax revenue with use-based/desire-based subscriptions. Taxes take significant burdens off of the public and instead place those burdens on the government. This of course requires the government to be robust enough to deal with the additional responsibilities of setting taxes and distributing revenue and so forth …
Our government is big not just in terms of power over territory but because of responsibilities to which it is held. I’d say that second factor is much more substantial in the world’s large, wealthy democracies. This isn’t to say there is no power hierarchy and no abuse of power … rather than the significance of government responsibility to the civilian public is casually ignored by a lot of people who go on about Big Government as though simply having a large administrative organ is the same as instituting the Panopticon and/or knowingly installing a power-mad dictator.
07/03/2013 at 23:16 PikaBot says:
Free to not be able to go anywhere, free to be able to be robbed with no repercussions, free to not have access to health care when you need it – certainly not at prices you can afford – free to not have any guarantee your money would be worth anything, free to watch as food prices spin wildly out of control…
You clearly have no idea how much you have benefited from not living in your dream state, or you would not be saying something so completely asinine. In practice you would find your hypothetical freedom to be a lot less actually free than what you currently enjoy.
Again: take a hike, kid. Adults are talking.
07/03/2013 at 00:57 drewski says:
You’re perfectly entitled to remove yourself from your social contract by removing yourself from society. As long as you remain in society and take advantage of all the free capital provided by society, you consent to the implied social contract.
06/03/2013 at 18:32 Terragot says:
Hes working on a zombie game in the vein of dayz or so i here so i do. Should be a giggle.
06/03/2013 at 18:33 Blackcompany says:
Dude must live in the US. A lot of places reward success. Here we punish it.
06/03/2013 at 18:38 Fiatil says:
Oh you’re just so cute.
06/03/2013 at 18:41 x1501 says:
By having the
lowestsecond lowest effective corporate tax rate in the developed world? Some punishment…Edit: It’s actually the second lowest in the developed world. My sincerest apologies to Iceland.
06/03/2013 at 19:21 Blackcompany says:
America has far from the lowest rates. Look it up. Furthermore, raising them to waste more our mobey should be acceptable to no one. Control spending & you wouldnt need more money.
06/03/2013 at 19:43 x1501 says:
Speaking of looking things up, you should try it yourself one day. You may actually learn something.
You can start by following the link I gave you.
06/03/2013 at 21:25 diamondmx says:
Wow, I had a feeling that someone was BSing when they claimed the US had really high corporate tax rates, but now I actually can see just how.
Thanks for the link :)
06/03/2013 at 22:16 derbefrier says:
So what? its still too high. Just because were on some useless list doesn’t invalidate that. Black Company is right we are way too heavily taxed. Government is too big and bloated and spends way to much on bullshit, here just look at this.
http://www.coburn.senate.gov/public/index.cfm/pressreleases?ContentRecord_id=3b872d11-b6b5-4f72-9a0f-f95c79c99b6f&ContentType_id=d741b7a7-7863-4223-9904-8cb9378aa03a
We have a spending problem and a big part of it is entitlements this just highlights some of the silly stuff. We need entitlement reform so bad but democrats refuse too do anything because their power lies within the dependency of the citizen on government and Republicans are too spineless and fractured to do what needs to be done.
06/03/2013 at 22:35 PikaBot says:
In an era when corporate profits are at an all-time high while simultaneously employment figures and worker income plummet, you think the problem is that corporate taxes are too high?
06/03/2013 at 22:42 PikaBot says:
Also note how none of that wasteful spending Coburn lists there is actually anything at all like an ‘entitlement’ that benefits ordinary voters. Most of it is corporate handouts. So even if you take Tom Coburn at his word (you shouldn’t) his bs still doesn’t validate your thesis.
But then again you’re linking to Tom Coburn’s website of all people so I don’t imagine I’m going to get through to you.
06/03/2013 at 22:50 Josh W says:
That report includes 10% of the budget of the american congress because the author thinks the current batch are being lazy. (no budget cuts for the Senate that he is in though)
Also includes that awesome thing about nasa turning the surface of mars into a highly accurate computer tourism game.
And that game trying to transfer the walden book into a survivalist computer game.
It also includes funding for a games for change festival.
And a college class about the philosophy of seeking happyness.
And includes loans given to growing businesses selling cupcakes, which is a very stretchy definition of wasteful spending, unless you think that loans to growing businesses is waste because cupcakes are frivolous.
Basically, lots of that list is to encourage lazy reactionary “I don’t understand it, so I shouldn’t pay for it” thinking.
America is wasteful, and includes lots of dodgy spending, but it’s also incredibly skinflinty where it matters, and yes that includes healthcare for old people, pensions you can live off, and other “entitlements”.
07/03/2013 at 01:10 drewski says:
I wonder why whoever wrote that article has decided to remove 6 OECD countries from the data.
(Australia, Portugal, Poland, Netherlands, Hungary and Estonia.)
06/03/2013 at 18:42 jalf says:
Yes, in other countries you actually get negative tax rates if you’re successful.
Yes, that’s just how it works….
Also grow up, and what are you basing that little nugget of absurdity on?
06/03/2013 at 18:42 El Stevo says:
Wrong on two counts.
06/03/2013 at 19:08 smg77 says:
You are the reason the rest of the world thinks Americans are dumb.
06/03/2013 at 19:13 Dances to Podcasts says:
*points and laughs at Blackcompany*
06/03/2013 at 19:29 mickygor says:
UK, where it’s even worse. The average person here winds up being taxed 72%, assuming they spend all their income.
06/03/2013 at 20:30 Zephro says:
What the hell are you talking about?
Average wage: 26,500
Personal allowance: 8,105
National Insurance: 12%
Income Tax Band: 20%
(26,500 – 8,105) * 32/100 = £5886.40 in tax AND national insurance. = 22.21%
Even if I were feeling generous and said the average worker lived in a 1 person house and paid all the council tax individually that would only get up to 25%.
No wonder people end up voting Tory.
06/03/2013 at 20:50 mickygor says:
Add onto that council tax, and VAT, trade tarrifs and duties, green tax, road tax, and TV license… Or, you know, just consider tax to be what is taken before you see your money.
06/03/2013 at 22:09 Zephro says:
So if I assume everyone pays a TV license, spends ALL of their money on VAT rated goods (so not food and various other things) and has a car. If I assume all that I get an average person do I? That’s idiotic.
Also any green taxes or tariffs are paid for by companies, as is most VAT. Should I also add on all the corporation tax that the companies who provide my goods and services pay? Even if 72% is true it’s utterly meaningless and stupid.
07/03/2013 at 01:41 mickygor says:
The key word is average. You can look at the revenue raised by road tax and the TV license to see that they both apply to the average man. Given that road tax can be applied to the average, that means that fuel duty can too. Almost all VAT is paid by individuals, not companies – companies can reclaim the VAT that they are charged so long as they sell the product, and anything else can be shoved on expenses and removed from their taxable earnings (actually saving them 4% at the moment if they’re a business worth operating).
Other things to take into consideration are the various implementations of stamp duty. It’s not until you take a long hard look at what actually constitutes tax (it’s far from just income tax, national insurance and value added tax – a tax is any form of compulsory income to state reserves) that you realise you’re losing a lot more than 51%.
07/03/2013 at 13:24 Nick says:
you don’t have to have a tv licence
07/03/2013 at 14:06 mickygor says:
You don’t have to have an income. The average person does, however.
07/03/2013 at 17:26 Ergates_Antius says:
If you’re trying to sound like you know what you’re talking about re: taxation, you should probably stop referring to “road tax”.
There is no such thing as road tax.
06/03/2013 at 20:55 zachforrest says:
Assuming they spend the remaine of their income. So you can add VAT
07/03/2013 at 01:16 drewski says:
Even if they spent everything left on VAT attracting goods, that’s still only take an extra 20% *of what was left after other taxes*.
Top of my head math says that would be about 13% of total income, for a total tax take of about 35%. Now, I know the UK has other taxes but I find it hard to believe they’d add up to 37% of someone’s income, which means that the 72% is pretty obvious horse turd.
07/03/2013 at 17:33 Ergates_Antius says:
Most people spend a sizable chunk of their income on rent/mortgage, for which you are not changed VAT. Oh, and they usually like to eat too (again, no VAT on most foods).
So, BZZZZTTT, Try Again.
06/03/2013 at 18:35 The Dark One says:
The Steam pun names Valve comes up with can make it hard to google for more info. Steam Pipe is apparently some way of organizing your game’s file structure that makes it faster/easier to host on their CDN, but details seem pretty scarce.
06/03/2013 at 18:56 amagrude says:
“Good lord man, get a better accountant. I’m pretty sure you can afford it.”
In the United States, that’s exactly how corporations are taxed. You pay taxes as the corp (for C Corp) and then again as an individual for every penny you get from it. The net tax rate can easily be over 50% of revenue (note – not profit but revenue.) This is the double taxation issue that SO MANY people have been talking about for SO LONG. It’s bad. Really really bad. All sorts of bad.
Please actually learn something about how corporate taxation before opining about them.
06/03/2013 at 19:10 smg77 says:
Sounds like you should take your own advice.
06/03/2013 at 19:59 Nick says:
irony overload
06/03/2013 at 20:17 cjlr says:
And I have to pay taxes from my paycheck AND when I buy stuff at the shops. DOUBLE TAXATION, MAN!
07/03/2013 at 01:18 Fiatil says:
Someone needs to look into what an “effective tax rate” is and come back and tell us all again about how much these poor poor corporations are being taxed.
Oh, NOL carryforwards would be pretty cool to check out too if you think you’re being taxed on revenues instead of profits.
07/03/2013 at 01:19 drewski says:
Given the overall tax burden on GDP in the US is less than 25%, you might be able to really, really fiddle your numbers to get a specific company paying 50%+ of revenue in total tax (including all state fees, duties, income taxes, co-contributions etc), but it would be pretty unusual.
07/03/2013 at 14:48 Sparkasaurusmex says:
What?!
As a citizen of the US I can admit that I know very little of tax laws.
However I do know that everyone is up in arms because corporations don’t pay taxes. Not they aren’t required to, but they put it all in eternal loopholes or something. Basically it isn’t income if it’s immediately invested or something? I don’t know, but those who I know who do know claim the largest corporations dodge most of their taxes.
Also, big time CEOs are often volunteers that get paid with bonuses, which aren’t taxed like income. This caused a lot of protest when bailed out companies were paying huge bonuses to their top employees (who could be considered failures since their companies needed a bail-out… hmm or perhaps geniuses for not paying taxes but having taxes pay them?)
Anyway, fuck corporations.
04/04/2013 at 09:17 ix says:
Not that I agree with the guy, but smaller companies usually pay a lot more in taxes than big companies.
Big companies can afford to move their money all around the world, in the end paying a lot less in taxes. Small companies don’t have that option, so it ends up being the middle class and upper middle class carrying most of the tax burden, while the rich pay somewhere <15% total. That's pretty much standard all over the developed countries right now, and a crying shame as well.
I highly doubt there are many companies paying more than 50% of revenue in the US though. Maybe if most of their costs are paid in the form of benefits to their employees/owners? (which would technically partly be tax those employees pay, but whatever)
06/03/2013 at 19:17 Dark Acre Jack says:
I imagine they are crying all over their diamond-encrusted vests.
06/03/2013 at 20:42 strangeloup says:
For a very weird, misreading-induced moment there I thought Gmod was made by Gary Numan.
06/03/2013 at 20:43 zeekthegeek says:
Garry’s Mod team angry they must follow laws of country they incorporated in. Lets hope they never grow beyond GMod and become the next Activision.
06/03/2013 at 21:33 karry says:
It’s amazing what crap people are buying in such bulk. 22 million earned from THIS ? It’s even more ridiculous than Minecraft success.
06/03/2013 at 21:42 diamondmx says:
If you don’t understand why Minecraft was a success, then I feel for your poor Lego-less childhood.
I can understand that you might not like the game, but really – understanding why it’s drawn so many people should be … childs play.
*sunglasses*
06/03/2013 at 23:09 Klaus says:
I agree, on both counts. Reality is amazing, sometimes.
06/03/2013 at 23:09 uh20 says:
also a quick find
“The Modern Warfare trilogy has sold a combined 64.92 million units.”
I’m not sure what the average price was, but $45 is a good bet.
64920000 * ~$45.00 per unit = 2.92 Billion
divide that by the 8 games they sold, and that’s still 365 million.
all for spitting out the same man shooter, one every year.
personally, i think garry’s mod deserved those 22 (or in reality, 4) millions more than activision/treyarch deserved 365 million per each blunt and unchanged shooter.
07/03/2013 at 13:25 Nick says:
cod has much higher overheads though
06/03/2013 at 22:37 Muzman says:
A lot of people seem to think he’s complaining. I reckon he’s just saying how successful it was, but that he isn’t necessarily Notch rich because of it. As others have pointed out, there’s a difficulty in doing business internationally like that which can be harsh, plus licensing etc. Plus I suspect it’s tough for a pretty low intensity outfit to bury money in the company effectively, like expanding hugely or building a bigger shed etc.
(Depends on the laws I guess, but there’s usually ways to do things. The late Australian billionaire Kerry Packer famously had a personal taxable income low enough to receive student benefits at one point)
07/03/2013 at 01:22 drewski says:
When people talk about billionaires, they’re usually referring to net wealth, not income. Just because you own a lot of stuff, doesn’t mean you are making lots of money from it – especially not if you’re reinvesting the profits of your ownership of stuff into buying more stuff, which is what Packer did.
I suspect the fringe benefits rules in Australia have eliminated a lot of the tax advantage for how Packer was remunerated since, though.
07/03/2013 at 01:44 Muzman says:
Yeah, pretty sure it has. Packer was a big high flyer and pretty open about all this sort of thing back in the day. He wasn’t breaking any laws.
The point is Garry (guessing here) wasn’t willing or able to do the same kind of thing (even if he couldn’t do anything to that degree). Company is the wrong size/shape, wasn’t expanding much etc. I don’t know.
07/03/2013 at 01:47 drewski says:
I’m not really sure it’s a problem, though.
Most companies in the world would fall over themselves for a 40% net margin.
07/03/2013 at 05:42 Muzman says:
That’s another way of looking at it.
I was only saying I don’t think he’s complaining all that much. Maybe the situation could be better with some tweaks. Either way, the whole ‘Taxation is Theft!’ meme has really caught on the point where over ostensible lefty’s like Alec (er, I guess) see a large sales figure and imply the creator should get all or most of it. But it’s a bit more complicated than that.
06/03/2013 at 23:13 uh20 says:
still stalking the awesomium dev’s, as once they finish up the linux release, then the last dependancy will be met to port garry’s mod over to linux
07/03/2013 at 01:23 drewski says:
Under half as net revenue is still pretty damn impressive, to be honest. Glad he’s done well.
07/03/2013 at 05:00 Jade Raven says:
If you think this is sickeningly wealthy then you don’t understand much.
http://www.youtube.com/watch?v=QPKKQnijnsM
07/03/2013 at 14:54 Sparkasaurusmex says:
Haha yeah. He’s a lot more wealthy than most of us is the point I guess.
But if $11 million is sickeningly wealthy then we need some new words for the 1%ers.
07/03/2013 at 05:25 tkioz says:
Oh dear… person making money pays tax… how dare the horrible liberals ask that people who benefit from a system pay back into that system! How dare they!
07/03/2013 at 10:47 plugmonkey says:
Oh, NO! The rich man has to pay taxes on his fortune?!
I think I speak for all of us when I say that this news has thoroughly ruined my morning.
07/03/2013 at 10:51 MrTambourineMan says:
Guys you really need to read this “fan mail” he posted on his blog, I laughed my ass off hahaha: http://garry.tv/2012/11/22/fan-mail/ . Well I guess this is what you get if you’re (semi) famous, that and taxes of course :))
07/03/2013 at 10:54 cliffski says:
I think gary is in the UK? I am too, and run a games company, so I have a bit of experience with this.
Say valve take 50% of his gross earnings (high, but then they are supplying the engine to him)
so 22 mill is 11 mill. in UK £ that is £6.875 million
Corp tax rate in the Uk has been falling from 28-24% recently. There is a smaller companies rate which is 20%, but I doubt he qualifies, because he earns so much.(as I recall it fades out from 300k upwards)
so assume 26% to the tax man (on profits, but I imagine his costs are negligible)
so he pays £1.787 million in corp tax.
Assuming 1 employee taking out all the profits as dividend income each year over 7 years that’s £726k in dividends a year. According to an online dividend calculator he would pay £239k in income tax a year on that, leaving him with a yearly income of £487k.
so X 7 = £3.4 million out of the original $22 million.
I’m not sure how paying a ‘better accountant’ changes any of this, unless you want to get involved in offshore tax fiddles, re-routing cash through the bahamas and so on. You can do that, but I certainly couldn’t live with myself if I did it. I find it sad that so many people think it’s a reasonable thing to do. I pay the tax on positech’s earnings in line with the spirit of the law, I don’t feel the urge to go all starbucks over it. Maybe I’m just naive.
07/03/2013 at 10:58 MrTambourineMan says:
Cliffski man, you’re just like me (if I had any money) :)
07/03/2013 at 14:56 Sparkasaurusmex says:
Yeah I think by “better accountant” he means “sneakier crook”