I can't believe Apple is wilfully not paying property taxes on their headquarters! That's quite illegal, and I'm sure...
...oh, they are paying their property taxes? I see. So which taxes, precisely, are they not paying the Cupertino government?
Oh, there aren't any taxes, but you sort of wish someone with the authority to do so would pass a law making new taxes, but they won't, so you're mad at...Apple?
If I remember correctly, that was a special assessment tax for the particular development in question which Jobs ripped to shreds by threatening to move Apple's operations elsewhere in the valley. What they would have had to have done was to create a catch-all impact fee law to apply to all developments based on the number of new traffic they would create. This would probably be bad for business though.
He isn't trying to make new taxes exactly, he just wants his $100 million. Apple's so big, they shouldn't mind parting with $100 mil for no good reason, right? It's not like they have responsibilities to shareholders or something.
This reporter is credulous, because the Guardian is just awful.
"Barry Chang barely made it into the lobby when Apple’s security team surrounded and escorted him off the property.
“They said ‘you cannot come in, you’re not invited’. After that I left and have not gone back,” said an exasperated Chang."
Uh huh. Yeah I bet it happened just like that.
What buffoon of a reporter prints a politician's self-serving and incredible story as plain fact? If you buy this story, I've got a pile of Trump steaks and a bottle of hot sauce from Hillary's purse to sell you. So, Barry takes a couple steps into the lobby, and the security just leaps out from behind a plant and says, "Whoever you are, you're not invited. You cannot come in." Sure. Was it the main public entrance lobby or like did he walk in behind someone else into an office building? If he wanted to talk to a higher-up, had he made an appointment? Is it that crazy that local politicians can't just walk into corporations without making an appointment and say, "I want to talk to the man in charge! Several thousand people voted for me!" Did a whole "team" really "surround" him? He makes it sound like it was a hostage situation.
Did you also notice that the way the Guardian wrote that paragraph makes it sound like Apple turned away the mayor, when in fact he was not the mayor at the time he went to Apple unannounced.
I cannot read that any other way except to intentionally mislead people for a greater impact on the story. I really hate this kind of journalism.
"The last time the mayor of Cupertino walked into Apple"
Yes, he is the current mayor since Dec 2015, but he was not when he "walked in to Apple."
From the article:
"“They said ‘you cannot come in, you’re not invited’. After that I left and have not gone back,” said an exasperated Chang, who’s been mayor since December 2015 and had approached the computing firm when he was serving on the city council three years ago."
He was on city council, he was not the mayor, when he went to Apple unannounced and was turned away. And I'm glad Apple turned him away -- why does he think he can show up anywhere unannounced just because of his title, be that mayor or city council member?
This is on top of this entire bullshit article, which as others have pointed out, says nothing about actual local/state taxes that Apple is not paying (because i'm sure they're probably in compliance). This article really comes down to "Mayor says life isn't fair, wants reparations."
This would be a reasonable approach if we weren't talking about a piece of published journalism. That makes it both more unlikely that it was accidental (due to a higher bar of fact-checking), and more blameworthy even if it was due to negligence.
What happened was he tried to get in and the one security guard told him he dad to be escorted by an employee, just as the sign said. Hundreds of people do this every day, thinking they will be able to see the campus on the inside. The only people that get escorted out are protestors who storm the lobby.
> Hundreds of people do this every day, thinking they will be able to see the campus on the inside.
During my time at Google, I had multiple people come up to me and ask me from where they could catch a guided tour of the campus. I always felt bad telling them there was none...
Nit: Hillary Clinton is apparently an authentic fiend for hot sauce; she has a giant collection of them, takes it with her everywhere, and puts it on everything, including foods where it's kind of gross to eat with hot sauce.
Question towards Steve Jobs on a Cupertino City Council Meeting in 2011:
"[How do] city residents benefit from [Apple's new campus]?"
Jobs: "Well, as you know, we're the largest taxpayer in Cupertino. So we'd like to continue to stay here and pay taxes. [...]. Because if we can't, then we have to go somehwere like Mountain View [and] the largest tax base will go away. This wouldn't be good for Cupertino."
In my limited experience, any kind of negotiation where the parties have a weak or a bit of an adversarial relationship, will probably degenerate into this kind of shin-kicking and posturing about walking away on both sides.
Can you blame him? There's nothing sleazier than municipal governments, at least once they reach a certain size. They all see the business class as a gravy train to ride instead of finding ways to do a better job with the already large budgets they have.
Chicago doesn't have a Jobs to control it, so its endless tax raises to pay for sweetheart public union pension deals and other backroom corruption. I think the internet-friendly narrative of government being bullied by evil corporations is a fairly unrealistic. Its usually the other way around.
I find it amusing that so many have an undying love for Jobs' judgement in business, technology, etc but his political dealings give them pause because it goes against the left's idea of how the world works. Jobs didn't act like this to be difficult, he said and did these things because its one of the more effective ways to control a city government that can hurt or even destroy your business trivially.
While we're talking generalities, here's something more serious.
> What has been created by this half century of massive corporate propaganda is what's called "anti-politics". So that anything that goes wrong, you blame the government. Well okay, there's plenty to blame the government about, but the government is the one institution that people can change... the one institution that you can affect without institutional change. That's exactly why all the anger and fear has been directed at the government. The government has a defect - it's potentially democratic. Corporations have no defect - they're pure tyrannies. So therefore you want to keep corporations invisible, and focus all anger on the government. So if you don't like something, you know, your wages are going down, you blame the government. Not blame the guys in the Fortune 500, because you don't read the Fortune 500. You just read what they tell you in the newspapers... so you don't read about the dazzling profits and the stupendous dizz, and the wages going down and so on, all you know is that the bad government is doing something, so let's get mad at the government.
What? There's no ad-hominem there. And what straw man? Chomsky claimed in the quoted sentence that things like huge corporate profits were not reported, your parent post says that's incorrect and they're often reported. Maybe he's right, maybe you're right, but there's no straw man.
Sometimes I feel like people have browser plugins that randomly pluck sins from the Wikipedia page for logical fallacies.
I don't like Chomsky either, but "Oh boy, a Chomsky quote" and the implication that it's somehow less valid because of its provenance is pretty much the definition of an _ad hominem_.
"oh boy, a Chomsky quote"? That implies no connotation there to you? There is no ad hominem you notice then.
> Chomsky claimed in the quoted sentence that things like huge corporate profits were not reported, your parent post says that's incorrect and they're often reported
Does that address the central point, or does it take one sentence out of context, then takes it literally without seeing the woods for the trees? Call it a straw man, call it not getting the point and splitting irrelevant hairs, same difference. Yes, all sorts of things do get reported, nope, doesn't change anything about the gist of the quote.
Here's a random comment from you to explain it better:
> your remarks are no different than a 7 year old putting down somebody for throwing like a girl.
Does that mean that's what they are literally saying, saying word by word the exact same sentence any 7 year old would say? Is the discussion about throwing? You didn't say "similar to", you said "no difference", after all. It gets worse, notice that you said "7 year old", not "roughly 7 years old". So a person who is exact 7 years old, no day, no minute, not even a second, not even tenth of a second older... but hey, it would take too long for any child to say a few words while they are still exactly 7, we could even wonder if that exact moment can even be found. So that clearly makes no sense.
Imagine getting such a response of someone either acting dumb or not getting it, and when you call it out as such, you get MORE games and a downvote. You would notice the problem quite easily, why don't you notice it here? Maybe because you don't even feel forced to seriously think about it; the difference is not that the Chomsky quote has been dealt with even just one iota more seriously or more honestly, the difference is in where the status quo lies, and what power doesn't care about or even supports. When you are on its side, one can get away with "oh boy, a Chomsky quote" and other such nonsense. Just like you could accuse someone of throwing like a girl around jocks no questions asked. Nobody will ever take you to task for your response to me. It's not like you just called anyone a racial slur, you just supported someone dismissing words with utter sophistry. Nothing to even skip a beat over, right? And the interwebs is positively littered with that, that's kind of one of the reactions Chomsky evokes. You might call him a litmus test.
And you know, I said "ad-hominem and straw man" because I didn't want to insult anyone's intelligence with this rant. It's not that I can't back up what I say in however much detail you need, I just find it unproductive. Just like I tend to collect and re-post quotes that say things I agree with; which I could say in my own words, in more words and less elegantly. Why do that, when there is a "quote for the occasion"? When people interpret a quote as saying "this is true because X says it", that's their problem, I don't operate that way.
OK, well in my opinion if your complaint was that the original poster was misinterpreting or misrepresenting Chomsky, I think it would have been more helpful to say that, and maybe to reiterate the central point that you (through the Chomsky quote) were trying to convey.
To me, the "oh boy, a Chomsky quote" telegraphed the writer's bias against Chomsky, and the follow-on sentence showed what the writer read in your quote. Bias or dislike for a writer is not ad-hominem: it's bias and dislike. And the interpretation of the sentence was fair: a central theme of Chomsky is that the media acts to maintain the status quo, through selective reporting. And a fair criticism of Chomsky is that observation shows a fair bit of reporting on many sides of many issues.
That's quite a bit different then the comment you pulled from me (posted minutes after this one, and a pretty good indicator that I'm probably too cranky to be using the Internet this evening), since the throw-like-a-girl quote makes no sense outside of its context: you have to manufacture context for it to make sense. The Chomsky snippet you object to makes perfect sense to anyone who's read Chomsky, and even if not, the poster can hardly be accused of trying to sneak something past us when the full quote is right above it.
I like Chomsky: I think he's smart and observant and courageous. But that interpretation was what I got out of the quote as well, even though I'll bet we're pretty aligned on many issues. So if that wasn't what you meant I think you would have been better served with a response that actually said the point you were trying to make. Saying "ad hominem!" just because somebody doesn't like Chomsky doesn't serve you or your argument.
This is such a crappy hit job on Apple. The mayor green lighted a bunch of projects in Cupertino and the people hated it. The congestion is not happening because of Apple but because of the new home developments that are approved. He wants to protect himself by getting free money from Apple to make his people happy with some infrastructure construction. Apple is not obligated to give the guy free money.
> Apple pays a 2.3% effective tax rate on its $181bn in cash held offshore...
> ...shield themselves off from the theoretically 35% federal corporate tax rate
Something seems wrong here. I don't think companies are expected to pay 35% yearly on cash reserves. Am I confused, or is the article? If anyone is knowledgable about this I'd be interested to know the deal!
Basically all countries tax companies on income earned in that country. So, if you're a UK company and you earn $1B in the UK and $500M in France, you pay tax on $1B to the UK government and tax on $500M to the French government.
The US taxes companies on their worldwide income when they re-patriate that money to the US. So, if you earned $500M in France and want to bring that money back into the US, you owe US taxes on it (in addition to the French taxes already paid). If you don't bring the money back to the US, you just pay the French taxes.
People have called the ability to hold the money overseas a loophole, but given that basically no other country taxes companies on their worldwide income, it seems more that the US is the outlier.
Let's put it this way. A UK-based firm earns $1B in the US and $1B in the UK and has to pay the American tax authorities on $1B and UK tax authorities on $1B and it can then bring the profit back from the US. That seems fair. By contrast, a US-based firm earns the same amount in each country and must pay the US tax on $1B, the UK tax on $1B, and then the US tax on whatever they bring back from the UK (which has already had UK tax paid on it). This encourages companies to reinvest their profits overseas rather than bring the money back to the US where it would get taxed again.
It's partly because the US is so large and has been more isolated than most countries. Likewise, it's basically the only country that taxes individuals based on citizenship rather than residency.
This isn't entirely accurate. First, You can deduct foreign taxes paid, so $1B earned in the UK could would come back only in paying the difference of higher US and UK taxes. But tax systems in different countries are different, deductions are different, as are fees and such....it leads to a huge mess.
The other hard thing to reason about is where the value was added. If the IP was developed in the states, technically, it has to be sold through, so profits on it are still taxed here, to the foreign branch, where only retail profits are taxed...or something like that. It gets really messy when you are also doing R&D abroad...and you can see why tax games are possible and even necessary.
Corporations get a tax credit on taxes paid to foreign countries.
This is where the U.S. nominal rate comes in. If it was about the same as other countries', then it would not be an impediment to repatriating profits. But at 35%, it's the highest in the world, so corps repatriating profits will indeed pay additional taxes to the U.S. government, even taking the foreign tax credits into account.
That's why corps want the corporate tax rate lowered--so that business purposes can have a bigger role in decisions about moving capital. Right now tax avoidance has a large role in those decisions, at least when it comes to the U.S.
It's also why a temporary corporate tax holiday does not really help. It lets companies bring back one big lump sum, but does not change their long-term decision making, and it is long-term decision making that determines where investment goes and where jobs are created.
The problem is, for income earned abroad, meaning of the deduction that lower the rate domestically don't apply as easily, so you wind up actually paying somewhere near 35%. "Hey here is an incentive to do stuff in the states" doesn't apply when you aren't doing stuff in the states.
Do you mean deduct, or you get a tax credit? If you mean deduct, then you pay UK taxes on $1B and then US taxes on the $800M (or whatever) that is left over.
Ya, tax credit of course. For us expats filing personally, it's the foreign tax credit. You can also deduct if you want, but I don't see how that would ever be useful.
The article is referring to the tax Apple would have paid on that money back when it was earned, if they had reported it as US profit instead of reporting it as foreign profit.
So, uh, the city is already highly dependent on one payer, and the solution proposed is to increase the proportion that payer pays?
I guess i never understand why people think the solution to something having too much influence due to money is to become more dependent on their money. I can see no magic way to accomplish this without an increase in influence from that payer, and to think you can seems ... pretty pie-in-the-sky.
The real solution is to diversify where your money comes from, at pretty much any cost.
If you don't need them, and they aren't providing anything for you, they have less influence on you.
The way you be less dependent on people is ... to be less dependent on them. Not by being more dependent and trying to set up magic firewalls or whatever.
> At a recent Cupertino city council meeting, some residents protested about a lack of funding for public projects, Chang said – even crumpling up meeting agendas and throwing them. “They ball up the paper and throw it, and they say ‘You’re making all the wrong decisions’,” Chang said. “In the meantime Apple is not willing to pay a dime. They’re making profit, and they should share the responsibility for our city, but they won’t. They abuse us.”
Is it just me, or does this Mr. Chang just sound incompetent?
His citizens are saying he's making the wrong decisions. He's walking onto Apple's property and being forced out. He's asking for special taxes against Apple without saying why Apple deserves these taxes.
How about Chang makes the right decisions that pleases his citizens? Has anyone actually been to a Town Hall meeting? People don't just crumple-up the agendas because your budget sucks. They crumple-up agendas because the meeting was a waste of everybody's time.
I think this Mayor can't run a Town Hall, doesn't have much support of the citizens, and his only "big idea" is to increase taxes against Apple (and maybe some moonshot projects no one gives a care about)
A REAL Mayor would have said something along the lines of "The highway leading to Apple Headquarters is full of potholes, and I don't have the budget to fix it!". Or maybe "Teachers deserve a higher salary in this town" (or something... connected to reality, you know?). This guy just seems jealous of Apple's cash.
If Apple is meant to pay a new tax based on their net income, then every business that operates in Cupertino should obviously pay the same tax. Let's see how that goes over.
This is sort of orthogonal, but certain types of businesses do get taxes on their net income in the form of sales tax. So Cupertino gets a cut of every sale that happens at a McDonalds in tehir border, but not a cut of the sales made possible by the workers in corporate buildings.
There isn't an easy solution (since Apple does get taxes in other jurisdictions based on sales).
But a lot of cities are frustrated that a bank branch provides little taxes while a mcdonalds in teh same spot would bring in a ton of taxes.
Yeah, you can't pass a law that targets one individual / entity, it's unconstitutional. I believe these are called bills of attainder, but my history is a little fuzzy. They'd have to tax all businesses of a certain size, and if the companies that made up that list was around the size of 1 Apple, they'd probably have that tax bill struck down in court.
They wouldn't have to physically move. Only legally. It'd be easy enough for them to arrange so that the corporate entity in Cupertino is a subsidiary which only ever makes a loss. No profits, no tax for Chang.
Actually, I wouldn't be surprised if Apple is already structured this way.
In the UK we have the concept of "Section 106" payments which allow a development through planning by the developer paying the local government some amount of money to redress the cost of dealing with congestion, public relam, affordable housing, etc. For large skyscraper developments in London, this can be many many millions of pounds.
Believe me, it happens in the US, by hook or by crook. I was a partner in a large residential development. There were countless ways that government gets what it wants from the developers.
For example, we had a commitment for a water line to the development from the water control district. Only later after buying the land, the politics had changed and we found that yes they would bring water to the project only not in our lifetime. We would have to pay for the water lines ourselves if we wanted them. Over the years as the development grew (hundreds of residential lots) we went to the city council to request a left turn lane for the entrance. They would let us pay to put one in, but only if we planted wildflowers along the city's highways.
There seems to be constant sleazy negotiation required for any development one does. The local governments have monopoly control over the process, and they force developers to pay up.
I'm not sure there's an official code for it in the States, but it definitely happens. In this case, Apple is spending in excess of a hundred million - $66M on things like infrastructure and low-income housing, $35 incentivizing alternative transit to work, and $15.4M annually to the Santa Clara Valley Transportation Authority (http://venturebeat.com/2013/06/04/apple-campus-2-7k-employee...).
In some cases, companies get sweet deals from locations to move there - Tesla is getting a whopping $1.2B from Nevada. But in Apple's case, they're paying.
Uh, yeah, they have to cost-share the burden of upsetting the current infrastructure. Say you owned a piece of property adjacent to where all this new building is going on. Is it your responsibility to chip in? Is it your responsibility to shoulder the cost burden of what is effectively a zoning-related issue? I mean, god, when do you really own the property you're standing on? You didn't even ask for all this development, but now you've got to pay for expanding the infrastructure because a new developer wants to reap financial reward by developing up his land?
Yeah. It's not a property freedom issue, it's a cost ecosystem issue. As time goes on and life changes, owning property is going to have fluid costs, and tax assessments on people who come in to develop land is one way to defray those costs from disproportionately hitting people who have lived in an area for a long time. Frankly, those people would never really plan for that kind of thing to happen, so you're avoiding a lot of nasty repercussions by taxing the person upsetting the ecosystem, rather than the members of the ecosystem itself.
1) the developer doesn't "bring" business to the area, they are supported by their clients and are responding to economic incentives, same as anyone else.
2) if you do perceive them as "bringing" business, then it's only right to equally perceive them as bringing congestion, pollution, and all the other undesirable side effects of economic activity.
3) when does one ever "own" land? Property rights are enforced by the government, it's only fair that they receive compensation for that.
What fraction of that do you want to bet has anything to do with protecting private property, as opposed to the large revenue generating activities like parking tickets?
Try again. That "protection" you're referencing is actually the natural cooperation between rational actors that capitalism and market economies in general foster and perpetuate. Capitalism is the invisible hand, not government.
I've been studying economic theory for the majority of my life, have a PhD, and I am a fellow at one of the most prestigious econ think tanks in the world. I've gone to school. I do appreciate being called a kid though.
Is your point that they need a blank check to protect property rights? Because that's preposterous and would only demonstrate your own misunderstanding of property rights (or rights in general).
for professional reason (i.e. mixing personal social media activity with links to my professional work) I can't post that here. Against our social media policy, and is generally in bad taste. Undoubtedly, you will take that as "I can't since it doesn't exist", but I couldn't really care less.
Because you asserted that there is some invisible, omniscient, 'so complicated we couldn't possibly understand it' work being done by the government in order to keep the boat afloat. My claim is that that's largely a ridiculous claim. And the government IS responsible for protecting property rights, I never suggested otherwise. That responsibility doesn't afford them (we the collective) a blank check.
Is the irony seriously eluding you?! You're saying in order to protect our property rights, they need to further violate our property rights! For the love of god...
In one sentence you claim we never own our property, the next you say they're in charge of protecting our rights as property owners... You literally contradict yourself in one sentence...
>So in bringing more business to an area, they need to pay twice?
It's very possible for situation where whatever property tax the city gets isn't enough to cover the actual services a company requires. Fire, EMS, police, road construction, etc. This is especially true when the workers are mostly commuters. Then the workers don't pay local taxes either.
There are positive externalities like nearby restaurants and hotels with increased business.
Its really unfair to blame apple for it since they didn't make the rules.
But I think it would be fair to levy a "worker" tax that tries to raise revenue for teh city to service the thousands of employees who spend 8-12 hours a day in Cupertino but don't pay a cent in taxes.
If failure to pay property taxes means you vacating the property after government seizure, then you don't own the land anyway. Threat of seizure is a serious problem for a business, why not force them to pay twice?
uuuuuh because it's immoral? You're saying "well we already threaten them with violence/guns to pay once, might as well do it twice" - I shouldn't have to explain my objections.
Luckily, we have a totally non coercive, completely voluntary way to regulate the use of finite resources, which automagically allocates resources favoring their most productive uses. It's called a market economy.
How can something that is common property, like you assert (I disagree) be claimed arbitrarily by one group of people and charged for?
California is a unique snowflake when it comes to planning and development. Mostly due to a number of issues:
1) Prop 13 allows commercial property owners to avoid tax reassessment when the property is transferred (they sell the shell company owning the property rather than the property itself so the property doesn't trigger a reassessment) . This means a lot of property owners are paying 80s or 90s levels of property tax rather than the amount they should be paying under current rates thus depriving cities of revenue.
2) NIMBYs. CA and especially the Bay Area is full of people that are supportive of building more infrastructure or housing as long as it isn't built where they live. They fear that any kind of infrastructure (roads, public transit) or new development (affordable housing) will bring "the wrong sort of people" into the area and affect their property prices. Cupertino and other valley cities are notorious for not building enough housing relative to the number of office space for this reason.
3). Environment impact studies. Any proposed development needs one of these and if your plan gets sucked into the detailed version then it can take years or even decades to get the project approved. If people don't approve of your development then generally they get lawyer-ed up and file a review. This will stop most developers cold as nobody wants to spent years and potentially millions dollars in court before they can break ground.
So there you have it. It generally considered to be impossible to get any large infrastructure project built in California in under 20 years. See the high speed rail project. 19 years to deliver a link between two nowhere towns (Merced and Bakersfield). China is positively rolling in the aisle with laughter.
In the US, it's more likely for a locality to pay a developer (often in the form of tax credits) to build in its area or to pay a company to move there. The theory is that it'll increase the local tax base and be a net positive, but as you point out there are also externalities and additional burdens borne by existing infrastructure and citizens.
Yes. But it's usually handled at a higher government level than the local council of a 60k person town. :) California, in particular, is somewhat famous for having an enormous number of state agencies; I rather assume one or more of those made the deal with Apple.
Regardless of the politics, Apple and Google and all the other Peninsula companies should be willing to help fund public transit because it is directly affecting their ability to recruit employees.
So Apple is already contributing nearly twenty percent of the city's budget? I think the real problem is not enough diversification.
Apparently there is also an agreement where the city refunds sales taxes back to Apple? Originally 50% and now down to 35%? Why does this even exist?
The way to get Apple to pay for infrastructure improvements is simple, don't do any near their campus and their own employees will be impacted and that will get Apple to agree to help redevelop the area.
> The way to get Apple to pay for infrastructure improvements is simple, don't do any near their campus and their own employees will be impacted and that will get Apple to agree to help redevelop the area.
And whatever they build they will control. I think you might be slowly giving away the city to a corporation.
In an article about property taxes paid or unpaid, it doesn't even mention property taxes. Is Apple's campus under-assessed? A little Googling shows Cupertino's tax rate as $7.96 on a thousand which would value Apple's campus at $1.16B. Is that a lot? Is that a little? What are other companies assessed at in Cupertino and surrounding cities?
The article talks about income taxes which are totally irrelevant to the situation and Woz's assertion that Apple should pay 50% income tax. The article talks about money earned offshore that Apple doesn't pay standard US income tax on, but fails to mention that pretty much every other country in the world doesn't tax foreign earned income as income earned locally (just letting it be taxed in the country it was earned). Plus, it's irrelevant to Cupertino.
This is just "you should hate on Apple. Why? Um, they're not paying taxes. What taxes aren't they paying? Um. . . the taxes."
Really, my simple Googling of Cupertino's tax rate and then trying to come up with an assessment off that isn't good journalism. But I'm just writing a comment on HN at 8am. I'm not a paid journalist - but that paid journalist hasn't researched the simplest questions possible. If Apple were replaced by hundreds of companies that added up to the same number of desks, would Cupertino get more money? If the answer is "no", then there's no story here.
The simplest Googling comes up with a much more useful article. Apple paid $25M in property tax in 2012 and that is going to grow by $32M annually with Campus 2 to over $56.5 annually. Apple is funding $66M in local public improvements and $35M on transportation demand programs. Plus, Cupertino is getting $38.1 in one-time construction fees and taxes and Apple is going to pay the Santa Clara Valley Transportation Authority $15.4M annually.
The caption of the image on the guardian article says the mayor wanted $100M from Apple for infrastructure - beyond the more than hundred million the VentureBeat article notes. It kind of sounds like the Mayor is incompetent, hated by voters who are trying to recall him, trying to salvage his career by running for state assembly, and trying to blame his incompetence on Apple. It seems to be more an article about how Cupertino has a terrible mayor.
Here's another, much better article. It notes that Apple's original campus was 856,000 square feet and that Apple has bought (which they would pay tax on) or leased (which their landlord would pay tax on) another 2M square feet. That makes it hard to say exactly what the property should be assessed at given that we don't know what proportion of the 2M they own, but let's say half. At $500/sq ft, 1.856M square feet would come out to $928M in property value. That's pretty close to $1.16B. At the very least, it seems like Apple's taxes are in the ballpark - especially when you consider the amazing deals that companies regularly negotiate to move to locations. Tesla negotated a 100% property tax and sales tax abatement from Nevada for 10 and 20 years respectively, $12,500 for every job, 10 years of 100% business tax abatement, discounted electricity rates for 8 years, plus $120M - totaling $1.2 Billion.
Again, it sounds like an incompetent mayor that voters are trying to recall attempting to save his career.
As well as that notorious bias, they have an axe to grind with Silicon Valley in general. Still it plays to their masses, just have a look at the comments.
Agreed, but nowadays it is in fashion to complain about companies not paying taxes, and making emotional arguments that give simply wrong meaning to things. For instance, compare corporate income tax (paid as percentage of profit) to revenue (which is not same as profit).
> Barry Chang barely made it into the lobby when Apple’s security team surrounded and escorted him off the property.
I had to read it again to make sure I'm not making a mistake. Its unimaginable in some geographies. Evokes mixed feelings like : "cool, they can do that?" to "that's quite arrogant"
Also reminds me of a video where Steve Jobs met the council. The mayor was delighted like a teenager, showing off his iPad to Steve, asking for free Wifi : https://www.youtube.com/watch?v=gtuz5OmOh_M ( t=19:54 )
This doesn't pass the sniff test for me. It makes it sound like a conspiracy when reality is usually so very mundane.
Companies don't do that unless people turn up randomly, start making crazy claims ("take me to Steve Jobs! I'm here regarding traffic congestion!") and start acting like an ass when they don't get what they want.
I would generally agree that someone like a mayor or governor deserves some default level of respect, but if he just showed up, unannounced, and "hoped to have a meeting" what did he really think would happen?
Most people, even mayors, make appointments when they formally visit another organization in an official capacity. They don't just walk in and expect to be seen.
> If he'd been a police officer investigating a crime,
Which means he'd have to have a warrant. If an Officer was "just investigating", they have to be invited or have a court order to get onto private property.
It's not quite that simple. If the police officer has probable cause to believe a crime is in progress, or the fire marshal believes a dangerous code violation might exist, woe to the dumbass who tries to escort them off the property.
Otherwise, yes, a police investigator needs permission, or a warrant, to go onto the Apple campus and ask questions or look around.
I agree. This is... worrisome behavior of a Mayor.
> Getting local politicians to battle Apple is hard, Chang said. He recently proposed that Apple – which is building a massive new campus its own employees nicknamed the Death Star, or more favorably, The Spaceship – should give $100m to improve city infrastructure. To move on the proposal, Chang only needed to get a single vote ‘yes’ among the three other eligible council members. He failed to get that vote.
What's his logic for this special Tax on Apple? It sounds like this guy is an anti-corporate loon, drinking too much Sanders juice or something. Sounds like the other council members are more rational.
I don't like this idea. Corporations should pay taxes and whatever, and not be treated specially just because they're the largest entity in the town.
A huge number of towns in America are basically run by one or two corporations. Cupertino is not unique in the slightest, aside from the fact that Apple is just a larger company.
But it really doesn't matter if you "only" have a $1 Billion market cap company headquartered in your small 30,000 town, or a $600 Billion behemoth like Apple. Its all basically the same: all your taxes are basically going to come from only one source.
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In either cases, you can run the town independently of the corporation. True: a lot of the corporation's workers will be your citizens, but keep the issues separate and keep things fair... and you ought to get what you need done.
The German city of Wolfsburg, and the state of Niedersachsen have done it with VW.
The solution: You just buy a large amount of shares of the companies that are started in your city. Municipalities get a far larger share of the profits directly, politicians have an incentive to ensure companies are profitable, and companies can’t avoid paying for the infrastructure they use.
That's an excellent point——can you imagine if the government of Cupertino bought AAPL shares in the 1980s? They sure wouldn't be complaining about tax revenues today!
This is an awful idea. Governments do not have the expertise to participate as an psuedo-activist investor. On top of that, what happens when the city's crown jewel goes bankrupt and those shares go to zero? Diversification is key. There's a reason why there were so many pension changes post-Enron. It's not good for individuals to be so heavily concentrated into a single company and it sure is not good for cities.
> Governments do not have the expertise to participate as an psuedo-activist investor.
Don't have an American bias when people share their cultures from around the world.
There are a lot of governments, and all of our experience with the American government basically means jack diddly with respect to the German government.
With that said, I do share your concerns, but I'm not going to make claims about a government I never visited and never worked with in my life that's roughly 10 time-zones away.
There's no American bias on this. If the world's activist investors employ extremely highly paid and numerous staff and maybe get things 50/50, what type of staff will a government employ that can do better?
Not all governments act like the typical government you know.
The German government, for example, owns several large banking groups, which act like any normal banking group – but their dividends directly go into the tax budget. (And they have to give loans at lower interest rates to the governments).
Normal bankers, in normal environment, and they’d probably never notice it was government owned.
My understanding is that Wolfsburg was built in order to house Volkswagen workers. There is a massive difference in planning a city around a specific need versus a well-established city investing in companies. While I still do not agree with governments investing in companies, I will say that it makes more sense if you are planning an entire city around it.
In all other cases, cities investing in companies are either going to take on a VC role which I'd very much argue that they are not capable of performing well (and introduces so much room for corruption) or will be investing in mature companies and likely without the balance sheet to make a dent as far as voting power goes. I don't see how either leads to anything productive.
And it means the municipal government provides funding for smaller companies, which gives those an advantage, and they don’t even take large risks either. It’s a win-win-win-win situation.
No, the idea that the city should have to provide roads, utilities, etc to a huge, rich corporation and get nothing back for their trouble is terrible.
Of course that would be absurd and unfair. That's why property taxes exist, to pay for local infrastructure. Apple pays a lot of property taxes in Cupertino.
Property taxes are based on the value of (and in some cases the type of use of) local property, that's reasonable because the costs incurred by the local government to build and maintain infrastructure is related to their use of land.
His argument seems to be that because Apple makes a lot of money they should also pay more taxes, luckily for him that's the way the system works! Apple also pays corporation tax on their income.
Unfortunately for him that tax is federal and not local so he doesn't get any more than any other local government does in federal contributions.
Creating the world's most successful company in your backyard, attracting high-value talent from all over the world, making Cupertino a household name...is "giving nothing back"?
Some of the people coming to Cupertino to work for Apple will buy houses in Cupertino, send their kids to school in Cupertino, spend the money they make in Cupertino, etc... Not to mention all of the extra jobs that need to be filled taking care of the buildings and the spoiled engineers, the hotel rooms for visiting emissaries and WWDC attendees, the construction jobs building those new houses and schools...
Edit: I don't want to sound like I'm saying "the town should be grateful for these scraps and nothing more", these are benefits to the town on top of the taxes that it pays.
That's a fair question. A massively successful technology company can locate itself just about anywhere it wants to. In fact, there are plenty of places that will offer very compelling incentives to a company like Apple to move into their locality. Why would they do that if it's of no benefit to the people? I guess you could argue that corrupt politicians will offer those incentives to secure bribes, etc., but here you have the mayor of Cupertino complaining.
Maybe if he described what these problems were, he's get my support.
But considering that he can't even get the support of his own citizens at Town Hall meetings, nor the support of his fellow council members, methinks he's simply incompetent.
And that the problems he describes are made up in his imagination. I can't imagine it to be too difficult to come up with a budget that says "We have to pay for X Million Dollars in the next year to fix the bridges and roads... or to upgrade our water pipes, or to deploy municipal gigabit-fiber. So here's a special +5% tax on all corporations in this Town"
And if the fellow citizens and council members think the plan is worth the tax, then they'll probably agree with him. On the other hand, if citizens are balling up his agendas and throwing them out during meetings... there's clearly a problem here. And it isn't with Apple. Its with the Mayor.
> Maybe if he described what these problems were, he's get my support.
I believe the city's infrastructure is struggling to cope with the city's growth. There was mentions of poor and congested roads.
> But considering that he can't even get the support of his own citizens at Town Hall meetings, nor the support of his fellow council members, methinks he's simply incompetent.
to be fair the article points out Apples image as a stumbling block to bring reform:
1) "In the case of Apple, people are so enamored with their iPhones that they can’t see the company. And year after year these companies are voted most respected, most trusted" - Matt Gardner
2) "he tried to organize a rally outside Apple. “But Apple has a pretty good image,” Chang said. “No one wanted to go"
> So here's a special +5% tax on all corporations in this Town
Chang has come up with such a proposal already, albeit it won't levy the extra tax on companies with less than a 100 employees.
> a problem here. And it isn't with Apple. Its with the Mayor.
That could be the case, though I'm leaning towards the Mayors side. This article doesn't go into much depth, and yield enough detail for me to come to a conclusion. I would do some background research but I honestly can't be bothered today. I have a feeling this isn't the last time we here of this, so i'll keep this in the back of my mind for future reference.
IE: Lets increase all corporate taxes by 3% in this city, to pay for a new road project. Here's the proposed road, etc. etc.
I mean, yeah, its hard to get approval from your citizens to build new roads. My area (on the East Coast) had to appease a ton of environmentalist types who refused to build a highway over any wetlands or swamps (ie: cheap areas), and the NIMBY guys who were being threatened with eviction.
But you propose a road (meet with engineers / architects, get some fancy drawings, write it up, build a website, etc.), you describe the costs (not just monetary, but also the houses you have to bulldoze, the "quiet" you have to disturb, meet with HOA communities to help gather support despite the costs), you raise a tax to pay for it, borrow some money with a bond and then it gets done. Its not easy, but its the freaking job of a Mayor.
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Why would the Mayor EVER have to explicitly reference Apple through this process? Only a complete dunce would do that, as it reeks of favoritism.
I'm reading through this entire piece, and its completely devoid of substance. The complaints are hilariously awful. I'm not sure if the Mayor is actually incompetent, or if the guardian is just awful at writing and completely focused on the wrong issues.
I mean, cripes. I've NEVER heard of a necessary road project being scuttled because of money. Its almost always the NIMBY people (to be fair, getting evicted from your family home for 50 years gotta suck because a road is being built through your plot), or environmentalists (Protect the swamp! protect the forest! Protect the grasslands!) who seem to get in the way. And NIMBY vs Environmentalists is a hell of an issue to work out.
(From near the end of the article) They (Apple) are already funding 18% of the city. I would argue that's dangerously undiversified already, and they want to increase the percentage?
How much of the city services do they use? How much of the city expenses is their "fair" share?
Try just walking into a telephone company like ATT or BT building unannounced and you will be escorted out even assuming you can get past the turnstiles, Exchanges (Central Offices) have even stricter security.
What's forgotten in this discussion are the property taxes in Cupertino. The property values in Cupertino are among the highest in the Bay Area, and with that comes more property taxes. I doubt Cupertino would be this desirable were it not for Apple (and the school district). So once again Apple, albeit indirectly, helps pad city coffers.
"Most" requires some hard data; and whether the fraction is higher or lower than the neighboring areas. Prop 13 is California-wide, so it's not specific to Cupertino.
Unable to find a source, but I thought Cupertino City Council approved this; if true, the Mayor blaming Apple for the City Council's actions seems a bit twisted.
Is anyone know if what if any role the Cupertino City Council played in the situation and provided a source to back this up?
Perfect article while the Life and Death of Cities is in mind.
Apple could be a better citizen, and contribute a lot more than money to the city around it. If the company fully subscribes to shareholder theory, they will contribute only what the law requires. But Apple seems to stand for higher things such as design excellence and human dignity.
The company can contribute to making Cupertino a functional and wonderful "city". It is neither of those things now with its car-centric configuration and lack of enough housing construction.
The actions taken by Cook regarding issues such as protecting privacy indicate that he stands for values beyond serving the shareholders. Those values could be developed for the community immediately outside the campus. Apple's ability to design such great things and manufacture them in vast numbers indicates that it has the ability to address very difficult problems. Those skills could be applied to the problems 25 feet away from their windows.
The people at Apple might think of Cupertino as a source of design challenges, and start by understanding the shape of the city and the people who interact with it. Take a look at the aggregate data coming in from the watch, or hang out by one of the main stroads. Try to take a walk to various useful places some time, or get three things done in a morning without a car.
All of us have the capacity to be more than a minimal tax payer. Being more starts with noticing.
> The company can contribute to making Cupertino a functional and wonderful "city". It is neither of those things now with its car-centric configuration and lack of enough housing construction.
The car-centric configuration is what most of the current residents want (if they wanted something else, they would choose to live somewhere else). Since they control a majority voting block in city politics, there's very little that Apple can do to change that; significant changes to the status quo will be blocked by the city residents.
What is "want"? And why does it have to be so immovable?
We can't always walk away from what we do or where we live. Car-centric, earth-wasting behavior is ostensibly what we want, because most of us engage in it every day. So is sugar soda and processed food, lack of exercise, and any number of unhealthy things we do. So is paying huge amounts of money for a house, then fighting any new development near our neighborhood out of self interest.
It is possible for people to essentially be trapped in a situation in which rational choices are a bad ones. How might we break out of that?
Slightly off topic, but is that really the design for Apple's new headquarters, a giant ring? So if you want to get from a place on one side to the other, you have to walk halfway around the circle or cut through the giant park in the middle? That seems horribly inefficient.
Related teams tend to sit close to each other in any case, so this is a worst case scenario. Which isn’t really that bad anyways. It’s good exercise and a rectangular building holding 14,000 people would also require a lot of walking. Sure, it could be many, many rectangular buildings which everyone else does, which would require even more walking. Not to mentain there’s a huge benefit in productivity for 14,000 people to all get abundant natural sunlight, which is available to only a fraction of the people in a standard campus. Vitamin D is deficient in many people and engineers typically don’t get out much. I’d say it’s a win-win for everyone. Finally, the campus is pretty compact, leading to a ton of open space, which, combined with natural light, will likely lead to greater productivity and also be a great attraction to new employees who value the look and feel of their work environment very highly.
If you can move in a 2 dimensional plane, such as inside a regular building, you can go in a straight line between any two points.
If you're constricted to moving around the circumference of a circle, you necessarily have to go in a curved line.
Curved lines are longer than straight lines.
So the average distance between any two points is necessarily going to be longer in the Apple building than in a normal building with the same floor area.
Add to that, normal buildings have cores where the utilities are run in the center and radiate out to the edges. Running wiring, plumbing, and ductwork around a circle will involve miles of additional material that would otherwise be unnecessary.
I think maybe you and Apple have a definition of efficient that differs from the rest of the population.
It's not just apple, it is every company that dodges taxes. Making an example of apple is not fair - everyone should pay their taxes... who knows how the systems we have in place would actually work if people used it the way it is designed (instead of finding loopholes for their own benefit).
Which taxes is Apple dodging? I'm not sure you read the article carefully. The mayor wanted to pass a new tax, but the other council members voted his proposal down.
That's not Apple dodging taxes either; they were just caught in the crossfire of the tax war that's been happening in the EU. Ireland, the Netherlands, etc try to lure companies by competing on tax rates, which the rest of the EU doesn't like, so as in any cartel, they forbid member states from dropping them too low. Since Ireland's was found to be in infringement, the companies have to pay the difference.
Is the money better in the hands of a super overgrown and overstaffed organisation like the US government when most of it goes to paying interest to the lovely central banks folks and the public has almost 0 transparency over its expenditure? The perfect portrayal of profound inefficiency and over-bloated corporate structure.
It's fun and easy to point fingers, and while tax avoidance should by no means by encouraged, why is 35% of your money the direct property of a government who does superb things like conjure into existence some of the most criminal oligopolies in the medical industry?
Maybe demand Apple to build the infrastructure themselves at their own expense, and let them manage it, seems they can actually get things done.
Uncle Sam's virtues seem to end with insane taxation used to bomb other countries and slowly but surely kill its citizens through rudimentary medical care bills in the hundreds of thousands, maybe leave real work to other people, who don't spend 600 mil of taxpayer dollar on a website.
Apple has yet to provide me with food stamps or public housing, both of which saved me when I was a refugee. I can check with my spouse but I'm pretty sure the public hospital she works at was not an apple product.
The rest is just ridiculous. If you want an effective government, you have to take privatization out of it, not rely on it as we have.
Apple paid $46 billion in just income taxes over the last three fiscal years. The majority of that was likely in the US market, where they're more heavily taxed and have a very large market share.
I don't know where you live, but if it's in the US, then you're wrong: they did in fact help pay for food stamps and public housing.
Last fiscal year, Apple generated $72.5 billion in income before income taxes, and paid $19.1 billion in income taxes ($53.3b in net income). That's a 26.3% rate. That rate is higher than corporations pay in almost any other developed nation (Europe typically has the lowest corporate income tax rates for example), and that's after they go out of their way to try to avoid paying taxes. That $19 billion in taxes pays for a lot of welfare state benefits.
> Is the money better in the hands of a super overgrown and overstaffed organisation like the US government
This is the municipal government complaining. Municipal governments are in charge of education, local police, and water supply... to name a few things.
The federal government barely does much at the local level. The USA is a very decentralized system.
So how about you at least complain about the right thing? If Cupertino's municipal police forces were locking people up unnecessarily or were an ineffective municipal government, that'd actually be relevant to the topic. But methinks you're just ranting about unrelated subjects.
...oh, they are paying their property taxes? I see. So which taxes, precisely, are they not paying the Cupertino government?
Oh, there aren't any taxes, but you sort of wish someone with the authority to do so would pass a law making new taxes, but they won't, so you're mad at...Apple?
'k.