Garry’s Mod Earns $22m, Gives Most Of It To The Taxman

By Alec Meer on March 6th, 2013 at 6:00 pm.

Like a boss

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.

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192 Comments »

  1. Aerothorn says:

    Has it ever occurred to this guy that the tax auditor might be female? Let’s not be gender normative, dude.

    • angramainyu says:

      Your mother is gender normative.

      • gulag says:

        That just took it to the next level. For one brief moment the Internet has a King.

        • 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.)

          • 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.

          • jrodman says:

            I am a robot.

      • Aerothorn says:

        I dunno. Let’s have a long discussion about the social definition of “mother” and whether this can be applied to men!

        • AraxisHT says:

          It can’t. The term “Mother” is strictly female. However, the term “Surrogate Mother” can apply to non-females.

        • x1501 says:

          To avoid making people uncomfortable by your sexist anachronisms, just use gender-neutral “Father-Mother”.

          • Flavors says:

            placing “father” first prevents total gender neutrality

          • DeVadder says:

            If there only was a single word including exactly those two!
            Maybe we can use parent?

          • 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.

          • Droopy The Dog says:

            Fomather, problem solved.

        • Continuity says:

          Or…. we could just not care? … maybe?

      • Geen says:

        Comment of the day, all bets are off, this magnificent fellow has won.

    • Hoaxfish says:

      If it was female, it’d be a taxmaness obviously

    • Giuseppe says:

      You tell ‘em, person!

    • Belsameth says:

      Yes, getting all of a man’s money has always been more of a woman thing…

    • bixbysnyder says:

      Possibly, but it definitely didn’t occur to you that “man” and “sir” referred to the creator of the game, Garry Newman, and not the tax auditor.

      EDIT: Saw the “tax man” thing. Got it.

  2. Crimsoneer says:

    RPS CONDONES TAX EVASION.

    • 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.

    • 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”.

  3. InternetBatman says:

    My heart bleeds for his loses.

  4. 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.

  5. 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.

    • darkChozo says:

      Theodore Taxman is the head of licensing at Valve, duh.

    • 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.

      • 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.

      • 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.

      • 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.

      • 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.

        • 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.

      • HadToLogin says:

        Some time ago I read that when you want to sell something made using Valve stuff, it’s 70-30 for Valve.

  6. 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)

    • Malawi Frontier Guard says:

      RPS should make a feature listing all the other companies that pay their taxes.

    • 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.”

      • 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.

  7. SkittleDiddler says:

    Couldn’t have happened to a nicer guy…

  8. zachforrest says:

    so the story here is Garry earns a good living while fulfilling his duties to society. good.

  9. Shantara says:

    The way this guy was talking, I expected he was going to ask for donations by the end of the paragraph.

  10. skalpadda says:

    Wouldn’t be much of a riches-off, given Notch apparently made a staggering 101 million dollars, personally, in 2012 alone. Crikey.

    • 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.

  11. 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!!!

    • 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.

      • 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?

        • 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.

          • Hungry Like the Wholphin says:

            Or the definition of fair is that everyone has the same obligations.

          • 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”.

          • Tsurugi says:

            Record highs on Wall Street and global recession elsewhere is because of QE3, which is basically dumping 80 billion a month into the stock market. This is also a direct cause of “record corporate profits” with no corresponding drop in unemployment. Companies have been downsizing and consolidating in response to the recession and other things, but nevertheless, their stock values have continued to rise and shareholder money continues to flow towards them.

            Your concepts of what is just and what is fair are a little odd to me. How is it “just” to divvy up the insulin between all survivors? That ignores reality, which is that only one of them needs insulin, while the others don’t even have a real use for it. How is it “fair” to give the diabetic the insulin and equal rations, then when the insulin runs out, increase his rations by lessening everyone else’s??
            But more than all that, your considerations of what is “fair” in terms of taxes appears to stop at the moment of payout. Like you have this unspoken assumption that once the taxes are paid, the fairness police can go home. Because, you know, everything the Government does with those fairly-paid taxes will be fair by default. Right? Because if it isn’t, that would change what was and wasn’t fair in the payout, wouldn’t it? So either your idea of a fair tax payout is actually unfair in various ways, or you make the assumption that everything the Government does with that tax money is totally fair.

      • 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.

        • LionsPhil says:

          All that military spending is vital to protect MUH FREEDUMS.

          • 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.

        • AngoraFish says:

          We can’t let the poor die out, otherwise there’d be no one to fight the wars.

        • Tsurugi says:

          I’m sorry….which country do you live in? You can’t be speaking of the poor in the good ole’ US of A, who are generally receiving money from the government, not paying money to the government. How do you tax someone who has little to no income?
          The answer is, you can’t. You can’t even get any sales taxes off them, unless you give them some money to go buy stuff….but then, you can’t really say they are the ones paying that sales tax, can you?

          So yeah. Taxing the poor is stupid. 10% of $0.00 is exactly the same as 90% of $0.00; it’s $0.00. But you’re saying we can’t tax the poor any more or they’ll die off. This implies that you think they are being taxed, and that they are being taxed to the brink of death. That’s just, umm….totally false. The poor in the U.S. don’t pay taxes—they are paid with taxes.

      • 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.

        • Hungry Like the Wholphin says:

          Is society the very same as government?

          Hint… society doesn’t collect taxes.

          • Text_Fish says:

            Our society relies on a governing body to collect taxes and allocate spending. That is a key principle in our society.

          • 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.

          • 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.

        • Tsurugi says:

          Umm. Are you implying that the government is the reason we have a complex and expensive infrastructure…?

          You say that this infrastructure would cease to function without regular and reliable infusions of capital. I happen to agree with this statement. What isn’t clear is where you think the capital is coming from.

          Say the government is responsible for our infrastructure, and that it is also responsible for maintenance of said infrastructure and for providing the infusions of capital to make that happen. How does that work?
          The government doesn’t produce anything, at least not in the way the private sector produces things. A private sector business is set up so that it can do everything it needs to do, build and maintain whatever facilities it requires, hire and pay however many employees it needs, purchase and maintain whatever tools are necessary, and procure all the materials it requires, and pay for all of this purely off of the sale of whatever product it is producing. Often, it will manage to make enough money that it can pay for all of the above and still have plenty left over for expanding the business…but when it doesn’t, it will not grow. If it is doing particularly bad, it will shrink itself. If it continues to perform badly, it will go out of business.

          Public sector endeavors, on the other hand…well. Can you think of one that comes even marginally close to paying for itself? Much less pulling in a profit…? Can you think of one that ever got smaller? Can you think of one that has gone “out of business” that wasn’t replaced as it was dismantled, usually with a bigger version of itself with the same inefficiencies, writ larger?
          So if the government doesn’t produce anything in a manner in which it can break even on costs–much less pull in a profit–how then does the government pay for things? The government has no money without first taking it out of the private market by way of taxes(or fees, or fines, or any number of other similar accounting terms, all of which basically mean “a legal confiscation of assets”).

          So in a scenario that assumes the government is responsible for building the infrastructure….it can’t build it without money. It gets the money from the taxpayers. Same with the reliable infusions of capital to keep that infrastructure in operation…that capital comes from the taxpayers.

          However…the government did not build our infrastructure. The power grid, and all the generator plants that produce the power to put in the grid, are private-sector endeavors in the U.S. Repairs, maintenance, and upgrades to the grid are paid for by those companies. The government provides red tape, endless regulations, mandatory inspections, and various licensing which the companies must pay fees to acquire or renew. Basically, the government gets in the way, slows things down, adds to the costs. Awesome, ain’t it?

          The interstate system was built by innumerable engineering firms from all across the country. The system was enacted at the federal level, but the details were handled at the State level, or at the municipal level when within city limits, meaning various State and local governments contracted engineering firms to build their freeways. The firms were private sector companies, and everything was paid for using money taken from the private sector in the form of taxes.
          The same goes for any other infrastructure you can think of….either the entire system was designed, built, and paid for by private sector companies for the purposes of making a profit–energy, shipping, harbors, railroads–with the government mostly getting in the way, laying down regulations, levying special fees, requiring licencing to be obtained(for a fee), inspections, etc…..or, the government hires private firms to design, build, operate, and maintain various infrastructure like roads, sewage and storm drains, or water reclamation and treatment plants; and pays the companies using taxpayer dollars. Not a single bit of any conceivable infrastructure would exist were it not for private industry and private sector money.
          Most people seem to think that infrastructure that was built by a company for the purposes of making profit is more costly to them than “publicly owned” infrastructure, because the public stuff isn’t set up as a “for profit” business. It isn’t overtly for profit, this is true…but it is highly profitable nonetheless. Why else would government contracting jobs be so sought after? An engineering firm that manages to land a big government contract has got it made…everyone there will get rich. There is plenty of profit in “public utilities”…it’s just harder to see, because instead of putting the costs out front in the form of prices like the private sector utilities do, the costs are in the budget for that utility, which most people never see, and the budget is paid for using money forcibly confiscated from the private sector.

          Your overall point seemed to be that an entrepreneur like Garry, who has seen a decent measure of success with his small business, could not have done it without pre-existing infrastructure–which is true–and therefore he should have to pay a large portion of his earnings in taxes in return for using that infrastructure.
          Why? Everyone involved was making good profit before Gary’s success. No one was put out by his usage of that infrastructure. And anyway, if he needs to somehow ‘repay’ the various infrastructure companies for his usage of them to make money, why do you think that remuneration should all be in the form of taxes? At least half the infrastructure is privately owned and operated, why don’t they get to have some of the money you think he owes?
          Really, it seems like you just want government–which does nothing but make infrastructure more costly and less efficient–to go and take a large portion of Garry’s money, simply because he made it. He’s been successful, and now you want him to pay.

    • mickygor says:

      Show me where I willingly signed a social contract and perhaps I’ll agree.

      • 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?

        • Text_Fish says:

          Actually I hope they do.

        • mickygor says:

          Assuming I’ve paid them (at that point, prior through insurance, whatever), the contract would be between me and them, not society.

          • 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”.

          • mickygor says:

            That would be my mother’s concern.

          • Tsurugi says:

            RobF apparently thinks anything medical is a social service provided free of charge by unpaid volunteers..?
            Rob, your hypothetical EMS guys or hypothetical nurses wouldn’t ask themselves those kinds of questions for many reasons, not the least of which is because they are doing a job they are paid to do. They are paid employees, or private contractors, or entrepreneurs, working in a private market system. If everything was free and no one was paid for or had to pay for anything, those kinds of questions might indeed come up often.

            Man am I glad we don’t live in that kind of society.

          • RobF says:

            I know! Fancy living in a world where people get free healthcare. That’d be TERRIBLE.

          • Tsurugi says:

            Yes it would! I’m glad we agree on this. EMS techs and maternity nurses who are getting paid for their work have no reason to ask the questions you posed because they know the answer: They do it because they are getting paid.
            In a world with free healthcare, they aren’t getting paid. They may have reason to ask those questions. The EMS tech might decide, hell, he doesn’t know you from Adam, and plus, its almost his lunchbreak and you are not helping his appetite, and skipping lunch at a stressful job is bad for his health! Screw that. So he does not scrape you off the street. The maternity nurse might decide that your mom’s annoying screaming was gonna induce a migraine headache that could leave her bedridden for several days, unable to feed herself or get a drink of water, further weakening her already weakened immune system. Screw that! She doesn’t want that kind of a health risk. So she walks away.

            Free healthcare? Screw that. Because everything has a price. Pretending it doesn’t is nothing short of delusional. And it’s a good way to get a lot of people killed.

          • Sheng-ji says:

            How much do you pay to get your bins collected again? What about the roads you use repaired? etc etc.

          • Tsurugi says:

            Where I live, we don’t have bins that get collected. When I fill up my outside trash bins(which I own), I load them up and take them round to a trash collection point. I pay the lone employee there a dollar a bag. Needless to say, I get the biggest bags I can.

            Road repairs are paid for through municipal, county, or state taxes. A lot of roads out here are private, gated, and thus owned solely by the community behind the gate. They pay for any road repairs usually through a Home Owners’ Association of some kind. Whether its an HOA or a local or State government arranging for road repairs, they all do the same thing: Hire a private contractor to fix the roads, and pay for it with other peoples’ money.

          • Sheng-ji says:

            Let me guess, you also live in a anarchy society which has no police force, they are also pacifists with no armed forces and under the free protection of a super power in case a non pacifist gets any ideas. All your houses are built from non flammable materials and you have no coasts to guard.

            Anyway, so what if your government hires a private company to repair the roads – you pay the tax so they can do that – you rely on those roads to support your lifestyle so you should be paying for their repair. No repaired roads = you leading a medieval lifestyle in all it’s disease ridden splendour.

            I suppose if you’re lugging your bins to a dump every week, you’re halfway there already – tell me, does everyone in your “estate” empty their bins as often as necessary to keep away the vermin, replace worn bins with holes in promptly to help prevent the spread of disease? Does the boot of your car stink like your bins? Do you add the cost of petrol to that dollar? Or do you carry it like a savage? Does this mythical land in which you live where nothing your taxes pay for is important smell like bins?

      • 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.

        • Dervish says:

          People willingly submit to the leviathan to get out of the state of nature.

      • 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?

        • mickygor says:

          No, but I’d gladly pay for what I need on a voluntary basis

          • 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.

          • 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.

          • 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?

          • 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?

          • 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).

          • 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”.

          • 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.

          • 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.

          • mickygor says:

            I don’t particularly care what I would be, so long as I would be free.

          • 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.

          • 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.

          • Tsurugi says:

            Text_Fish: Who do you think actually builds the roads? Guess what, they are private contractors, operating at a profit. The governments hire them. Math should immediately inform you that you would probably end up paying less by removing the middleman, the government.

            Zephro: The police would refuse to investigate crimes if they weren’t being paid, because they’d be off looking for a job that did pay them. Just because you don’t have to write the cop a check on the spot does not mean that you are not paying him. Just because the check the cop does get is written by the municipal government does not mean you are not paying him. Same with firemen, same with state troopers and coast guard and border patrol and air traffic controllers and public school teachers. The Government isn’t paying them, because the government has no money of its own. The taxpayers(that’s us, man) pay those people. The government is a middleman who has somehow managed to convince everyone that it is actually the boss.

            Muzman: Nice picture. Monopolies, and huge conglomerates, are a result of government attempts to control and regulate free markets. You get the picture you are painting by laying so many regulations down that it becomes impossible to break into that market as an entrepreneur, because the costs of compliance and the business infrastructure necessary to operate in that market are too massive for a self-starter. You know how there used to be people called “wildcatters” in the oil business? A wildcatter was the owner of a small-business oil company, usually with one employee: himself. Wildcatters are long gone, now all we have are a few gigantic multinational corporations. Reason? There used to be a hell of a lot less government regulation in the oil business, and wildcatting was possible. Half a century of added regulations later, we have less competition, and no new blood. This causes the buying and selling of businesses by businesses that is always taking place to eventually result in there being one or two behemoths.
            I’m not disagreeing with your scenario, here. I’m just identifying the mechanisms by which the picture you painted takes place. I am disagreeing with your conclusion, which is basically “Big Business bad, Big Government good”….and I don’t disagree with the first part. I’m saying that Big Government is also bad, and that Big Business does not exist without Big Government.

            Gwathdring: Its fundamentally different because the incentives in government are fundamentally different from those in the private sector, as are the mechanisms for getting things done. But mainly, its the incentives, or the lack of them. There are thousands of incentive differences, but by and far the biggest difference is the fact that none of the money being used by various parts of the government actually belongs to anyone in the government. It’s tax money, which means it belongs to everyone…or no one. This divorces it from any kind of proprietary husbandry that is intrinsic to the way it is handled when it belongs to someone, and that lack results in waste. To put it another way…in the private sector, greed can cancel itself out a lot of the time, because the greed of the buyer and the greed of the seller are at odds with each other. The buyer has money and wants to spend as little of it as possible. The seller has a product and wants to sell it for as much as possible. These things tend to cancel each other out. But in Government, there is no buyer. Government buys things, of course, but the fundamental economic aspect of the buyer as the sole owner of his money is not present. This is why government bureaucracies do things like spend every single bit of their money each year, so they can justify the same amount or more in their next year’s budget. In the private sector, such a thing would be ludicrous. A department in a business is judged based on how much money it brings in, not how much it spends.
            There are endless examples of why government is fundamentally different from a business. What I don’t understand is why you seem to think government is magical and special, to the point that big corporations must be reigned in, while government should be allowed to grow and grow. Usually, the root of distrust in corporations centers on the greed people envision must be present there. Corporations themselves cannot be greedy, because they aren’t people, right? The source of corporate greed is the people in the corporation. Well, just like a corporation, government is made up of people. Are they not just as likely to be subject to greed? Shouldn’t government, therefore, be constantly mistrusted like the big corporations, and be reigned in? Be limited?

      • 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.

    • Tsurugi says:

      “…and you should pay a good chunk of it to the taxman!”

      Really? How interesting.

      Why?

  12. Terragot says:

    Hes working on a zombie game in the vein of dayz or so i here so i do. Should be a giggle.

  13. Blackcompany says:

    Dude must live in the US. A lot of places reward success. Here we punish it.

    • Fiatil says:

      Oh you’re just so cute.

    • x1501 says:

      By having the lowest second 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.

      • 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.

        • 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.

          • 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 :)

      • 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.

        • 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?

        • 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.

        • 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”.

          • Tsurugi says:

            Why does any of what you listed have to come from the government?

            Also: Whether I think cupcakes are frivolous or not is a moot point. The real issue is, why is the government getting into the business of investing in businesses in the first place?? Isn’t that a little outside the scope of its purpose? Basically what’s happening is, the government takes money from individuals and businesses by force, then gives some of that money to certain individuals and businesses it has chosen, for one reason or another. Isn’t that pretty much just redistribution? In the particular case involving cupcakes, since it is being done with businesses instead of individuals, it’s cronyism.

            I don’t see anything on that list that I don’t understand. What I don’t understand is why any of that stuff should be paid for through government. Cut all that crap put of the budget–remember when the government used to have budgets?–and then if people want those things, businesses will emerge that provide those things. New businesses equals new jobs equals lower unemployment equals more people paying income tax equals higher tax revenue….after cutting spending. Imagine that!

            The overall point of your comment seems to be that none of the stuff on the list is really a big deal and some of it might even be good, and that we can’t really accuse the government of massive wasteful spending because they are skinflints when it comes to entitlements and medicare and assistance for seniors, et cetera.
            Basically, our government spews money left and right for all kinds of pet projects and programs, but when it comes time to provide money to the poor or the elderly, it becomes a Scrooge. Maybe I’m missing something here, but that seems backwards, you know? They’re doing it wrong.

            So I tend to want to get government out of the business of annexing larger and larger portions of private sector income in order to finance its own little pet projects. The government is not good at operating in the market, because public money isn’t spent the same way private money is, and the distortions caused by government largesse and/or government wasteful spending are massively damaging, and everything the government tries to do in the market can be done quicker, more efficiently, and for lower costs to the consumer, if done in the private sector.
            If we removed all of that extemporaneous crap from government spending, they could eventually lower taxes and still be getting high revenue. Higher revenue, even.

            Hell, we could remove the government’s power over the market, and go back to having a real free market system. One of the primary initial results of such a move would be that all the corporate lobbyists would leave D.C.,. Because they’d have nothing to buy. Wouldn’t that be great….to have a market un-manipulated by either government or corporate forces, who’s primary goal seems to be just ‘rigging the game’.

      • 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.)

      • Tsurugi says:

        Um. What? U.S. Corporate tax rate is 39.1%. The OECD average is 25%, and a very tiny bit of arithmetic informs me that we are on the wrong side of the average number for our corporate tax rate to be anything other than one of the higher rates in the world….and it is, in fact, the highest corporate tax rate in the world. If you can find a nation with a corporate tax rate higher than 39.1%, I’d like to know what it is.

    • 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?

      • Tsurugi says:

        Which part did you think was absurd? The idea that success is punished in the US, or that there might be places in the world where it isn’t punished?

        You mentioned ‘negative’ tax rates, perhaps in attempt to illustrate what you saw as absurdity with another absurdity. But we do have negative tax rates, only we give them to the unsuccessful.

        US Government Awesomeness: Punish the successful==>Reward the unsuccessful==>Wonder why economy sucks.

        • Sheng-ji says:

          I’ve been seeing you post in this thread all night… it’s 6 months old and I doubt anyone will read what you are saying to them!

          • Tsurugi says:

            Yep, it’s been fun. I’m about done now. :D

            I don’t particularly care if the people I’m responding to see it. If they do, great….if not, no worries.
            You saw it. Others will too, for various reasons, even years from now(unless RPS archives articles sans commentary).
            But even if they pull the article tomorrow, it was still worth it. I’ve been working on other stuff all night and popping in here now and again as a kind of break from my other work. It was fun, clarifying of thought, and I learned some things I didn’t know before. I didn’t really expect any responses, as I knew the article was old….but you’re the third one I’ve gotten tonight.

            Cheers!

        • airmikee99 says:

          I just have to laugh so mightily at the irony of whining about government on the internet, which exists solely because the government funded its creation because the private sector could not see the profitability of a network of computers at the time.

    • El Stevo says:

      Wrong on two counts.

    • smg77 says:

      You are the reason the rest of the world thinks Americans are dumb.

      • Tsurugi says:

        Really? Wow. I’ll have to call up my overseas friends and tell them they were wrong; it isn’t a small percentage of people who have had a bad experience with a tourist or have swallowed media portrayal….it is in fact the whole world, and it’s all because of this one guy! They’ll be astonished, I’m sure.

    • Dances to Podcasts says:

      *points and laughs at Blackcompany*

    • mickygor says:

      UK, where it’s even worse. The average person here winds up being taxed 72%, assuming they spend all their income.

      • 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.

        • 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.

          • 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.

          • 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%.

          • Nick says:

            you don’t have to have a tv licence

          • mickygor says:

            You don’t have to have an income. The average person does, however.

          • 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.

        • zachforrest says:

          Assuming they spend the remaine of their income. So you can add VAT

          • 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.

          • 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.

  14. 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.

  15. 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.

    • smg77 says:

      Sounds like you should take your own advice.

    • Nick says:

      irony overload

    • cjlr says:

      And I have to pay taxes from my paycheck AND when I buy stuff at the shops. DOUBLE TAXATION, MAN!

      • Tsurugi says:

        It is double taxation. The difference is, paycheck taxes and sales taxes are income and consumption taxes, respectively. Taxing income is a disincentive to succeed. Taxing consumption is not.
        Corporate taxes are levied on corporate net income. But shareholder dividends, which are also based on corporate net income, are subjected to the Capital Gains tax…which in this case is a second tax on the same net income.
        Following along with your comment, when those shareholders go to the store to buy stuff with their dividend payments, they are taxed a third time.

    • 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.

      • Tsurugi says:

        Yeah. Effective tax rates are the actual percentage of corporate net income paid as taxes after all deductions have been applied. Since I believe in “equality in the eyes of the law”, I dislike all manner of tax deductions, not merely corporate ones. Making a tax deduction for this industry or that corporation or this particular kind of small business does nothing but create special interest groups out of thin air, who then promptly form a lobby and go to D.C. to hurl money at politicians in attempt to get more special considerations. It’s divisive, it’s cronyism, it’s extortion. It makes people in government exceedingly wealthy in a very short time, and provides the government with another method of market manipulation, by which they can ease the tax burdens on some businesses while maximizing them on others(and then auditing them endlessly afterward), further distorting the market.

        As for how much taxes those poor, poor corporations are actually having to pay…well, that’s easy. Zero.
        Where, exactly, the burden of Corporate Tax may fall is unclear and a point of debate with economists, but one thing they all agree on is that the Corporation entity itself does not bear the Corporate Tax burden. People pay taxes, and corporations are not people, right? So Corporations do not pay taxes, despite it being called a Corporate Tax. There’s a cigarette tax too…does anyone think the cigarettes pay the taxes? No. The customer pays the tax.

        So who bears the burden of corporate taxes? The working hypothesis is pretty much that initially, the corporate tax burden falls on the corporate shareholders–from the Board Member bigshots all the way down to your old Granny, who owns 5 shares of the stock in her retirement portfolio. But, over time, the company responds to the added burden by shifting goals, changing plans, etc., and this effectively moves the burden off the shareholders and onto the employees in the form of fewer jobs at that corporation and lower salaries with less chance of a raise…and the consumers of the company’s products in terms of lower supply and higher prices.

        Conclusion: No matter what they call them, every tax is a tax on the people, in the end. You can’t tax a business, all that happens is the business owners and shareholders pay the tax until the business can adjust, which basically shrugs the burden off onto the employees and the consumers. Deductions are either a very stupid or very shrewd response to a combination of debilitating regulatory environments and high statutory tax rates. Often, these two things combined can break a business. It’s no wonder they send lobbyists to D.C., and it’s not really surprising that the great majority of politicians in Washington have no desire to change, restructure, or simplify U.S. tax law.

    • 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.

      • Tsurugi says:

        You are ok with the government–which produces nothing and only encourages waste or otherwise distorts the market–laying claim to one quarter of GDP every year?? That is a huge drag on the economy. How could it not be?

        • airmikee99 says:

          Produces nothing? Huh.. where do all those roads come from? What about the freeway system? What about the military? What about flight controllers making sure planes don’t crash? What about creating and maintaining our national park system? What about the police that protect us from those that would do us harm? What about the courts that protect people when the police are doing harm? What about the prison system that locks up those people the police and courts have proven to be a danger to others? What about all the clean air and water we’re able to enjoy? What about the university system? What about protections when times get tough, like unemployment and social security?

          You know what would be a real drag on the economy? Turning over those public institutions over to the private sector. Or are you naive enough to think that corporations will provide those same services at the same price, are you gullible enough to think our freedoms wouldn’t be eroded when profits become the driving force of our nation instead of the Constitution?

          • Tsurugi says:

            Yep….produces nothing. First off, it can’t pay for any of those things you list without out first taking money out of the private sector. Second, all it does is hire private companies to build, operate, and maintain many of those things. I’ve already posted at length on this subject in these comments.

            As for things like the National Park Service….are they producing anything? What is it that they are producing? And why do they require money at both ends? You pay for a permit to enter the park, but they also get a bunch of tax dollars budgeted to them for each year. Why? A private business is paid on the front end by its customers, but on the back end, they get a bunch of money taken from them by the government, and they still manage to stay open(not always, of course).
            That is not to say that something like the NPS should not exist. But there is the question, “Why does it exist?” There are State parks too, they are essentially indistinguishable from National Parks, do we really need a Centralized park bureaucracy? For what reason do we need National parks as opposed to State parks? Every one of those National parks is in an actual State….why can’t the State handle it?

            And umm…please explain how paying for something with tax money is less of a drag on the economy than paying for it by way of consumer-based revenue? Because if it can’t pay for itself in the private sector, it means there isn’t enough demand for it, and it closes down. The resources it was using are then freed up for other things that can pay for themselves. Public sector institutions never do this. They are removed from having to contend with economic and market forces. So they are almost always more of a drag on the economy than any private sector company.

            Your implication that profits somehow erode freedoms, or that free market principles are somehow unconstitutional, makes no sense at all.

          • Sheng-ji says:

            We don’t pay to enter our national parks in the UK, but things like the cafes in them and charities support them. (This is a UK based site so remember most opinions will be UK centric)

            But you are still avoiding the central thrust of the point which is “your taxes pay for important stuff, who will pay for them if we don’t pay taxes and what will the compromises be?”

          • airmikee99 says:

            LOL

            If National Parks aren’t a production, then video games are even less of a production. It’s extremely obvious that you haven’t thought this out beyond, “OMG, I DUN LIK TAXEZ.” So go ahead and keep spouting nonsense, I’ll just block ya. :)

          • Tsurugi says:

            Sheng-Ji: Taxes do pay for important stuff. The question, always, is “What qualifies as ‘important’”? Obviously there will always be contention and disagreement in some areas of that question. Most of the time, when I get involved in these kinds of discussions, the things people bring up to justify government spending are not the things that make me question government spending. But those things that people bring up to justify government spending, are also the things that government brings up to justify government spending.

            I might typically say, “I think the government is taxing and spending way too much, we should cut some of this stuff,” and the typical response is to ask me why I want to deprive people of Police, of Firemen, of maintained roads, of City, State, or National Parks, or of Air traffic controllers, or do I want to cut the pay of military service men, get rid of the Coast Guard or the Border Patrol….so on and so forth.

            Though I am prepared to discuss possibilities for those things–like could some of them do better as a private sector company, or, if they remain public, how can we minimize the economic burden they represent–those things are never what I or others like me are talking about when talking about cutting government spending. In a debate over what is or is not “important”, those are not things I would suggest are unimportant.

            Even so, the argument almost always ends up with someone trying to say I want to privatize the police or something like that. That is not the case.
            Is there nothing in the UK that is essentially “unimportant” that your government is nevertheless gleefully throwing your money at? No excess? No function that could be better handled in the private sector? I don’t know much about your economy, I confess….it’s hard enough keeping up with the one here.

          • Sheng-ji says:

            Our government is leading the world in austerity – at the point where we are denying paraplegics wheelchairs if “someone can go to the shops for them” I’d say were running quite a lean operation… Our government has a policy of “big society” where if they don’t have to do something because someone can do it for free then they won’t pay for it – the wheelchair example being one, another being the volunteer police force, the specials.

            Oh wait…

            The tax break for the richest 10% of our population… yeah, that’s a bit frivilous.

            And yet we still have a national health service providing world leading health care free for all….

            Would I trust more to the private sector? Let me tell you exactly why not – My son has Dooze syndrome – don’t worry too much about the details, just know that he falls a lot, and bangs his face loads. In this country getting an NHS dentist is difficult, and dentists can practice privately as well. He fell and bashed his teeth really badly.

            NHS dentist – He doesn’t need any attention, the teeth are baby teeth and they will sort themselves out.
            Private dentist – He needs three major ops under general anaesthetic which would have cost tens of thousands.

            You already know the punchline – it was the same dentist seeing him once under my private insurance and once under the NHS with his grandparents.

            We got a final answer when after a really bad fall he went into hospital and the facial specialists confirmed that the ops were entirely unnecessary and held significant risks for him :/

          • Tsurugi says:

            @Sheng-ji: You said not to worry about the details, but I went and poked around anyway. What I read said Doose Syndrome is basically a form of epileptic seizure which has no identifiable neurological origin and no known cause, and first manifests in young children between the ages of three and six. Because the cause of the seizures is unknown, the only present course of action is to try and mitigate the symptoms using drugs, diet, etc..
            For whatever it’s worth, I feel for you on that situation. Must be incredibly difficult and painful as a parent.

            That being said, I don’t mind debating or discussing economic principles with you, or public vs. private sector issues, government vs. free market policies, etc….I enjoy these kinds of debates, and I always learn things from them. But I think I am going to steer clear of debating economics or government policies in any incident connected with your son, because it would be almost impossible for us to debate such things dispassionately.
            So, I am going to respond to some of the things you said in the first paragraph of your reply, and leave it at that.

            Again, I should note that I know next to nothing about politics or economic policies in the UK. I can’t “put myself in your shoes” because I just don’t know enough to do so. Instead, I apply the things you say to the system here–with which I am familiar–and think about it in those terms. That’s how I get my responses. So they may not always be applicable.

            Anyway, you said, “Our government is leading the world in austerity – at the point where we are denying paraplegics wheelchairs if “someone can go to the shops for them” I’d say were running quite a lean operation…”
            Ok. My first inclination is to distrust government. That’s not to say I think private industry is trustworthy, or that is is more deserving of trust than the public sector. They are both equally deserving of mistrust, I think. It’s just that it is much, much easier for the lack of trust to be directly and powerfully communicated to private companies, because in the end, a very large amount of their revenue comes directly from consumers of their products. People tend not to buy things from companies that have shown themselves to be untrustworthy, and companies that can’t get customers will be out of business very quickly. It’s a lot harder to communicate a distrust to government, and the government never goes out of business.
            In any case, I don’t trust government. As I have mentioned before, any time the subject of cutting government spending is brought up, our government immediately begins warning that they won’t be able to maintain police forces, and we’ll have anarchy in the streets. They say they will have to cut back on the number of firemen and their equipment, so your house is probably going to burn flat with no one there to put out the fire. They say they won’t be able to pay military salaries. They say seniors will stop getting their medicare checks, they’ll be dropping like flies. They say they won’t be able to provide food stamps for the poor and homeless, and we’ll have food riots.
            Implicit in such proclamations is the idea that those things will be directly and unavoidably affected by any budget cuts because there is nothing else that could be cut. This is patently false….in the U.S., anyway. First of all, every government operation has waste that could be pinpointed, identified, and cut without negatively affecting the ability of the department to do its job….if someone actually set out to do cuts like that. Second, there are entire bureaucracies full of faceless minions doing nothing discernable while collecting six-figure(or near six-figure) salaries with full benefits and full pay retirement packages….bureaucracies that could be cut out completely and no one would notice.
            But they don’t cut those bureaucracies. They don’t identify and eliminate wasteful spending. Instead, they do their best to apply cuts to places where it will be the most noticable to the average citizen, like laying off police, reducing hours at the local government offices, cutting the hours of air traffic controllers, etc. They do those things because they don’t want their budgets cut, and the best way to keep their budgets from getting cut, is to maximize the negative effects of any cutting, so that people will think they’d better not cut any more, and actually, we should probably remove most of those cuts we did make.

            Refusing to provide paraplegics and quadriplegics–who are on national health plans, I assume–with wheelchairs on the grounds that it is an unfortunate but unavoidable part of the austerity measures is a textbook example of what I’m talking about. They choose a highly visible program to cut, the results of which have high-emotional index, high empathy response. If that were happening here, I wouldn’t doubt for a second that if I took a little time to do some research–say 30 minutes–I could find multiple things which could have been cut instead of wheelchairs for paralyzed people; things that, if cut, would have little or no impact on anyone.
            Again, it is the U.K., not the U.S….it may be different there. I’m just saying, denying wheelchairs to paralyzed people is not something I would take as a measure of government frugality.

            I intended to respond to a few other things you said, like about your government deciding if something “can be done for free” they won’t pay for it, or that the NHS is “free”….but this is already way long, so I’ll comment on those some other time.

    • 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.

      • 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)

  16. Dark Acre Jack says:

    I imagine they are crying all over their diamond-encrusted vests.

  17. strangeloup says:

    For a very weird, misreading-induced moment there I thought Gmod was made by Gary Numan.

  18. 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.

  19. 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.

    • 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*

    • Klaus says:

      I agree, on both counts. Reality is amazing, sometimes.

    • 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.

  20. 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)

    • 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.

      • 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.

        • 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.

          • 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.

  21. 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

  22. drewski says:

    Under half as net revenue is still pretty damn impressive, to be honest. Glad he’s done well.

  23. Jade Raven says:

    “While I don’t think anyone could claim he’s not in the Sickeningly Wealthy bracket”

    If you think this is sickeningly wealthy then you don’t understand much.
    http://www.youtube.com/watch?v=QPKKQnijnsM

    • 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.

  24. 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!

  25. 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.

  26. 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 :))

  27. 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.

    • MrTambourineMan says:

      Cliffski man, you’re just like me (if I had any money) :)

    • Sparkasaurusmex says:

      Yeah I think by “better accountant” he means “sneakier crook”

  28. Rub3z says:

    This is such an awesome discussion thread sprouting from this story of one little developer’s income, I love it.