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Apple may get 80% tax break to build new Texas campus

post #1 of 35
Thread Starter 
Travis County officials are debating whether to give Apple an 80 percent tax rebate worth $7.4 million if the company builds a proposed campus in Austin, Texas, which would add to two other multi-million dollar government subsidies already being offered to the tech giant.

Although a formal agreement has yet to be reached, conditions discussed during a closed session hearing on Tuesday may grant Apple an 80 percent tax incentive for 10 years -- with the possibility of a five year extension -- in return for choosing to build a new campus in Travis County that would create some 3,600 jobs, reports the Statesman.

The commissioners' closed-door discussion followed two hours of public comment where county residents voiced concern over the large subsidies Apple would receive.

Reports from other media sources on Thursday claimed that a deal has already been struck, however a representative from the office of County Judge Samuel T. Biscoe, the presiding officer of the Commissioners' Court, told AppleInsider that the matter cannot be decided outside the commissioners' purview.

As for what was discussed on Tuesday, Judge Biscoe said that the primary goal of negotiations is the creation of jobs for the "economically disadvantaged." The terms, which have yet to be solidified, call for the Cupertino, Calif., company to hire a number of workers who are currently unemployed, have gone through targeted job training or live in a poor area.

"We want to provide some opportunity for upward mobility but also give Apple employees that are qualified," Judge Biscoe said.

Pay scale for new hires are expected to be between $54,000 and $73,500, depending on qualifications and position.


Travis County Judge Samuel T. Biscoe. | Source: Statesman


The new campus is expected to nearly double Apple's job force in the area, which currently consists of customer support operations and staff. The proposed two-phase build out in Northwest Austin would begin with a $56.5 million, 200,000-square-foot office, followed by a $226 million office taking up as much as 800,000 square feet.

Apple is already in line to receive $8.6 million in tax breaks from the City of Austin and $21 million in an incentives package from the state-run Texas Enterprise Fund if the company builds the proposed campus.

Judge Biscoe's representative, reading from Tuesday's minutes, said that the Travis County matter will be handled "expeditiously," and will be the topic of a follow-up hearing on April 17.

[ View article on AppleInsider ]
post #2 of 35
Now they have to close that east Texas court house that so many people use to sue Apple!
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post #3 of 35
Considering how much cash Apple has, why don't they just be a good citizen and pay the taxes? Yes they are bringing something in, but they don't need the tax break.
post #4 of 35
Seriously, what's with government giving tax breaks to the most profitable companies in existence?
post #5 of 35
That's just... Bizarre...

Sometimes I just don't get the US and how they think about taxes. If you are filthy rich you can get a pass and pay little or no taxes, but if you are poor, you have to cough up double or triple the percentage

Then again, by US standards I would probably almost be communist so maybe that's why I just don't get it. Anyway, I have a lot of respect for Apple because of their great products, but stuff like this doesn't help. $100 bln in the bank and still trying to get tax breaks left and right
post #6 of 35
Quote:
Originally Posted by old-wiz View Post

Considering how much cash Apple has, why don't they just be a good citizen and pay the taxes? Yes they are bringing something in, but they don't need the tax break.

I don't think Apple did not want to pay, I think it probably have to do with cities competing to get Apple to expand there.
post #7 of 35
I love Apple, but tax the Hell out of them.

Tax corporations and the 1% to pay for the last 30 years of what they have been getting away with.
post #8 of 35
Quote:
Originally Posted by d-range View Post

That's just... Bizarre...

Sometimes I just don't get the US and how they think about taxes. If you are filthy rich you can get a pass and pay little or no taxes, but if you are poor, you have to cough up double or triple the percentage

Then again, by US standards I would probably almost be communist so maybe that's why I just don't get it. Anyway, I have a lot of respect for Apple because of their great products, but stuff like this doesn't help. $100 bln in the bank and still trying to get tax breaks left and right



That's politics and business for ya. Government officials are always jockeying up to get businesses to set up operations in their state. You really can't blame Apple for making financially sound decisions. If you're expecting Apple to be a living being with a moral conscience, you'll find yourself severely disappointed when other companies from whom you buy stuff let you down.
post #9 of 35
Every municipality wants to fight for the jobs even if it means knee capping yourself on other things. The problem with being a good corporate citizen and paying this fee is that it's inconsistent with the mission to realize shareholder value.

/philosophize ON. I mean, we all want a high stock value. Until we want good citizenship. We all want cheap products. Until we want better working conditions. It's good to be aware of these tensions. The choices we make at each step nudge us towards some result. It's good to be aware of that before we wake up and realize the results don't match our vision of the perfect world. /philosophize OFF
post #10 of 35
The tax breaks they get should be small compared to the tax revenues generated by the 3600 new jobs as well as the general stimulation of the local economy.
post #11 of 35
Quote:
Originally Posted by bspears View Post

The tax breaks they get should be small compared to the tax revenues generated by the 3600 new jobs as well as the general stimulation of the local economy.



That is to be seen. But I'm sure policy experts are doing the math to figure out whether that's the case. If the Texas campus leads to enough students getting actual high-paying, long-lasting jobs, then sure.
post #12 of 35
Is that what the haters mean by "Apple tax"?

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post #13 of 35
The tax break is nothing to Apple. They already have a large investment in Austin. The real stink is whether Texas will retain Apple and not lose them.

Apple can just as easily relocate it's Accounting and Support to another state.
post #14 of 35
This decade is so about Apple. No question.
post #15 of 35
Quote:
Originally Posted by alienzed View Post

Seriously, what's with government giving tax breaks to the most profitable companies in existence?

Because Apple isn't required to locate any of its business in a particular city or even country. Did you notice the salary ranges for the new employees? What about the income taxes those employees will pay? What about the sales taxes that will be collected from increased sales of goods and services by those employees. Apple will be providing ALL of that revenue through the salaries it pays to its employees. I would venture to say that the boost to Austin's economy will more than offset any tax break they give to Apple. It's a total win for Austin, TX and its citizens.

Finally this is still a free country. What would you say to total government regulation of prices, wages, your wages? What would you say to the government mandating where a company may or may not do business and how much profit it is allowed to make? Don't you realize that this has already been tried over and over for centuries only to fail miserably, resulting in utter economic chaos?
post #16 of 35
Let me see, I can tax you at 20% of the full tax rate and you invest several hundred million dollars in my county. I benefit from added sales tax revenue as added payroll turns over several times in the local economy. Housing demands buoys up residential and commercial property values, on which I levy taxes. Or I let you go somewhere else, and I get nothing. Hmm, that's a difficult decision.

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post #17 of 35
Quote:
Originally Posted by lkrupp View Post

What about the income taxes those employees will pay?

No state income tax in Texas, but there is property tax.

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post #18 of 35
A 7.4 million dollar tax break is peanuts, considering that Apple is investing many hundreds of millions of dollars into that area and hiring many workers.

Apple should not pay any more taxes than they are legally required to. If you don't like it, then change the law. Whining will get you nowhere. And Apple can certainly pick and choose between where they wish to expand their operations.

I also pay as little taxes as I am required to in accordance with the law. When and if I become ridiculously rich, I will continue to pay as little in taxes as I can. If anybody here feels that taxes are too low, then you pay more out of your money. Either put up or shut up. Don't tell others what to do with their money.
post #19 of 35
Quote:
Originally Posted by old-wiz View Post

Considering how much cash Apple has, why don't they just be a good citizen and pay the taxes? Yes they are bringing something in, but they don't need the tax break.

Welcome to 'greed is good', 'buy our congress', corporate-owned America...where you can buy both parties and the Repubs will lead the way!
post #20 of 35
Quote:
Originally Posted by old-wiz View Post

Considering how much cash Apple has, why don't they just be a good citizen and pay the taxes? Yes they are bringing something in, but they don't need the tax break.

They don't "need" oversized margins on products either. But that is what they do.
post #21 of 35
Quote:
Originally Posted by frankie View Post

Throw up? What are you a corporate whore? Seriously they are the only ones standing up for the rights of Americans in this country. The founding fathers would be standing there with them.

The same founding fathers who had no problem with only white male property owners having the right to vote? I assume they had no problem with this, as this was typical at this time, and they didn't see the need to mention it in either the Constitution or the Bill of Rights. History is a bitch.

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post #22 of 35
Quote:
Originally Posted by old-wiz View Post

Considering how much cash Apple has, why don't they just be a good citizen and pay the taxes? Yes they are bringing something in, but they don't need the tax break.

Try to understand how running a successful business works. The name of the game is PROFIT, not LOSS.

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post #23 of 35
Quote:
Originally Posted by AppleZilla View Post

I love Apple, but tax the Hell out of them.

Tax corporations and the 1% to pay for the last 30 years of what they have been getting away with.

Another comment that shows how ignorant of basic business concepts people have become with the openly socialistic attitudes wrought by politicians. Sad.

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post #24 of 35
Maybe Travis County officials know what they're doing.

http://www.statesman.com/business/au...s-2268365.html

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post #25 of 35
Quote:
Originally Posted by frankie View Post

Actually capitalism and the greed is good trickle-down lies are the ones who have led to the demise and debt crisis in this country. The rich have sold us out, not the poor and middle class.

You are dreadfully misinformed, Frank.

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post #26 of 35
Quote:
Originally Posted by SpamSandwich View Post

Socialists are as bad as corporatists. Neither should be given special favors by the federal government. As far as local government favors, it's all fair game.

I agree with the first part and on the latter ... Yep, at the end of the day any State can do what they feel the need to do to attract business. It would be great if one day Foxconn see a viable way to open in a State here given the right incentives.

BTW, just as a reference point for your footer ... A the time dear old Maggie said that, the right wing of the Britsh system would be called communists by today's American right wing's standards and our current administration here in the USA would seem far right to the Brits of that era. I did a lot of work for Maggie at the time so not totally making this up. Many things in life are relative.
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post #27 of 35
So, 3600 employees earning on average $65k - minus say $20k for federal taxes and other crap, which leaves $45k of income which will be spent locally at a guess of 8% sales tax - and that's around $12m per year. Plus property taxes (no idea what they are, but figure that it's $500 per person so that's another $2m.

Let me think, $8m incentive over 10 years to get an extra $12m in taxes per annum, plus another $40-50m in local sales, plus a big office built (which employs people to build and materials sourced locally)......

Hmmm, $8m over 10 years, in return for $12m per year...... it's a difficult one....
post #28 of 35
Quote:
Originally Posted by ddawson100 View Post

Every municipality wants to fight for the jobs even if it means knee capping yourself on other things. The problem with being a good corporate citizen and paying this fee is that it's inconsistent with the mission to realize shareholder value.

/philosophize ON. I mean, we all want a high stock value. Until we want good citizenship. We all want cheap products. Until we want better working conditions. It's good to be aware of these tensions. The choices we make at each step nudge us towards some result. It's good to be aware of that before we wake up and realize the results don't match our vision of the perfect world. /philosophize OFF

Apple locating in Austin provides economic value to Austin. It is at least $200MM annual salaries, which creates new jobs with existing companies catering to the employees. The economic value to the city (hopefully) exceeds the concessions they provide to Apple.

Be clear on what they are doing: They are giving them a discount on taxes (property, sales, etc) so that they are able to collect some taxes in the end. It might be a race to the bottom for the cities, but as long as the city is ensuring that there is excess value to them it is a win-win.

Compare this to the 1980's expansion of WalMart across the US-- each city would give them property tax exemptions in order to gain more sales tax revenue, and jobs. But, the new stores killed existing businesses, created lower paying jobs, and ended up as a zero-sum game. When the incentives expired, WalMart relocated to just outside the city limits or got the next city to give them a deal, leaving a big, empty building as a blight.

If you don't want companies getting deals like this, run for city council, and vehemently oppose such actions. Push for other logical reasons why a company should do business in your jurisdiction. Understand that the chances are quite good they will go elsewhere given they can save 10% of the project cost.
post #29 of 35
It's all Bush's fault...
post #30 of 35
Quote:
Originally Posted by digitalclips View Post

I had to Google 'Bniceism' and your post came up ... That was impressive but not very enlightening!

Is that a real thing? I thought they were saying "be-nice-ism"...

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post #31 of 35
Quote:
Originally Posted by lkrupp View Post

I knew it was the Canadians! I just KNEW it! Terrance and Phillip are behind all of this, right?

Time to invade Toronto! Mr. President, I await your order...

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post #32 of 35
Quote:
Originally Posted by SpamSandwich View Post

Is that a real thing? I thought they were saying "be-nice-ism"...

Ah, ok ... Another iPad user lol. Mine seems to leaveoutthespacesalottoo?
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post #33 of 35
Apple can afford it...the 80% discount is silly as an excuse to attract "good paying jobs"... why not take pride in the local job skills that attract Apple instead of the other way around???

The build it and they will come is a fatal mistake in our gov't understanding of long term job growth. Companies can't growth without talent and skillful workforce, not the other way around.
post #34 of 35
Quote:
Originally Posted by Techboy View Post

Apple can afford it...the 80% discount is silly as an excuse to attract "good paying jobs"... why not take pride in the local job skills that attract Apple instead of the other way around???

The build it and they will come is a fatal mistake in our gov't understanding of long term job growth. Companies can't growth without talent and skillful workforce, not the other way around.

Whatever the excuse, Apple has a world-class reputation and will attract high-paying, talented, driven people.

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post #35 of 35
Quote:
Originally Posted by old-wiz View Post

Considering how much cash Apple has, why don't they just be a good citizen and pay the taxes? Yes they are bringing something in, but they don't need the tax break.

I guess you would refuse free money if it was offered to you?

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