Apple touts Cupertino public works investments ahead of employer tax vote

Posted:
in General Discussion edited July 2018
Apple lauded its contributions to Cupertino, Calif., in a letter sent to the municipality's city council on Monday, noting tens of millions of dollars which go toward public works projects that benefit its hometown. The authority is set to decide whether an employer tax measure will make it to ballot next year.




Penned by Apple VP of Global Real Estate & Facilities Kristina Raspe, the letter outlines the company's significant ongoing investment in Cupertino, which includes sidewalk and crosswalk improvements, as well as transportation efforts, reports SFGate.

In the letter, Apple focuses on recent improvements made in concert with the construction of Apple Park, a multi-billion dollar, 175-acre facility that houses more than 12,000 of the company's integral staff. Of note, Apple contributed more than $70 million in "public benefits" related to the freshly completed campus.

Sidewalk and crosswalk improvements to Bubb Road were cited, as was the construction of Apple Park's $108 million visitor center and Apple store. Original Apple Park plans did not include the ancillary building that was tacked on in 2015 at the behest of community requests.

Apple also points to efforts that help mitigate traffic in and around the Apple Park area. More than 25 percent of employees use "alternate transportation options," Raspe said. Details were left unmentioned, but the company began work on projects designed to handle increased area traffic, like bicycle and walking path improvements, from at least 2013.

Raspe said Apple will continue to work with the city and regional partners on other transportation solutions.

"For Cupertino and Apple to thrive we need to partner on both long-term and short-term solutions that will move our residents and employees more efficiently and effectively," the letter reads.

Raspe failed to mention Cupertino's potential employer tax, but the letter's timing leaves little doubt as to the company's motives. Apple declined to comment on the matter.

The Cupertino city council is looking to raise up to $10 million by charging companies with large head counts a per-employee fee. Measures under consideration include a model that levels a tax of $425 per employee on firms staffing at least 5,000 people, the report said.

Last month, the city council voted to push the tax proposal off the November ballot. If the city council approves the measure on Tuesday, voters will have a chance to vote on the matter as part of a special ballot in 2019.
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Comments

  • Reply 1 of 22
    jbdragonjbdragon Posts: 2,170member
    Cupertino should be ashamed of its self for such a b.s. Tax money grab.  I said before that Apple was pretty dumb to build their new UFO building in California.  A head tax is ridiculous.  Tax people for working.  While already taxing Apple and all the workers already.  Nothing like stealing  other peoples money.   Liberal policys in action.

    tallest skilmacseekerentropysSpamSandwichJWSC
  • Reply 2 of 22
    tallest skiltallest skil Posts: 43,399member
    mac_dog said:
    STFU!
    Not even remotely an argument. Steve Jobs explicitly said, “We think we do enough for the city just by paying our taxes.” There is absolutely no obligation (or excuse) for Apple to pick up the government’s slack. On the note of taxes and the proportion paid by Apple, all property taxes should be abolished. 1. They’re not constitutional. 2. Replace them with a land tax. Taxing land means that PEOPLE ARE NOT PUNISHED FOR WORKING TO IMPROVE THEIR NATION. If I build onto my house, I’m punished. If I keep my lot clean and my house’s facade maintained, I am punished. IF I LET MY LOT GO TO RUIN AND MY HOUSE CRUMBLE, I AM FINANCIALLY REWARDED WITH LOWER TAXES. This is mental illness that absolutely no one not in on the scam can possibly defend. This is the subsidized ruination of entire countries.

    The city of Cupertino can either stop having communist delusions or it can live within its means. What we’re seeing here, humorously enough, is a soft form of anarcho-capitalism filling the hole inevitably left by communism. Fortunately for the world, neither of those works in the end. California’s in for a huge correction, soon enough.
    edited July 2018 radarthekatbestkeptsecretmacseekerJWSC
  • Reply 3 of 22
    Rayz2016Rayz2016 Posts: 4,764member
    mac_dog said:
    jbdragon said:
    Cupertino should be ashamed of its self for such a b.s. Tax money grab.  I said before that Apple was pretty dumb to build their new UFO building in California.  A head tax is ridiculous.  Tax people for working.  While already taxing Apple and all the workers already.  Nothing like stealing  other peoples money.   Liberal policys in action.

    STFU!
    Insightful. 
    macseekerentropyslamboaudi4
  • Reply 4 of 22
    asciiascii Posts: 5,941member
    In the City of London all the companies that have offices there get a vote (might not be 100% correct about that but its something like that). It would be good if Apple and other companies in the area had a vote over this council.
  • Reply 5 of 22
    netroxnetrox Posts: 781member
    jbdragon said:
    Cupertino should be ashamed of its self for such a b.s. Tax money grab.  I said before that Apple was pretty dumb to build their new UFO building in California.  A head tax is ridiculous.  Tax people for working.  While already taxing Apple and all the workers already.  Nothing like stealing  other peoples money.   Liberal policys in action.

    I am a liberal and I oppose tax heads so don’t assume it’s a liberal thing.  I Would never do business in cities where they even bring up that ridiculous idea. Imposing that kind of taxes is literally punishing them for hiring and keeping them. It should be unconstitutional. 
    lamboaudi4SoliJWSC
  • Reply 6 of 22
    entropysentropys Posts: 1,850member
    Somehow writing into the constitution of any country “thou shall not have employee tax” would seem a bit on the petty side for such a document, but I get what you are trying to say. You would have to be a rolled gold, Big Government idiot to think a tax on private sector employment is a good idea. What a disencentive to giving more people a job.

    edit:sp
    edited July 2018 JWSC
  • Reply 7 of 22
    Corporations got a gigantic and unnecessary tax cut at the federal level and largely used it for stock buybacks or adding to the profit column, so it makes sense that local government would look to recoup a small percentage of that for infrastructure use that does benefit the general public, which would include Apple's own employees.
  • Reply 8 of 22
    entropysentropys Posts: 1,850member
    Corporations got a gigantic and unnecessary tax cut at the federal level and largely used it for stock buybacks or adding to the profit column, so it makes sense that local government would look to recoup a small percentage of that for infrastructure use that does benefit the general public, which would include Apple's own employees.
    So A doesn’t do x, so B is justified in doing y. Riiiight.
    I suggest working on your logic tree.

     Edit:  I should explain less cynically. If the local government wants it raise more funds for more infrastructure, it should try to do so in a way that is not what is called a perverse incentive. A tax based on each employee that works there discourages an employer from employing more people in Cupertino, as it raises the cost of giving someone a job. Set it too high and the employer starts laying people off, or worst case, relocates the business altogether. The effect of such taxes is that local employment is not what it could have been. Now, it is always possible that that is the real intent of the proposal, the proposer wants to actually reduce the number of people that work in Cupertino. But I doubt it.

    It is easier to believe they are just another stupid politician, likely Wth safe connections in one of the two major parties, unable to think through the possible unintended consequences of their proposal because they are too focused on raising more funds so they can go on fact finding junkets to Paris or Tokyo.
    edited July 2018 jbdragonSpamSandwich
  • Reply 9 of 22
    dewmedewme Posts: 2,152member
    It's gratifying to know that Apple is a good neighbor, good corporate citizen, pollution intolerant, and actively contributes to the improvement of communities where it is located. This makes me feel a little better about purchasing Apple products.

    Those of you who wish to criticize Apple for how it conducts itself as a member of the communities in which it operates should dig a little deeper into how some of the previous (and some current) economic powerhouses of their era contributed to the social, economic, and environmental fabric of the communities where they conducted their business. Apple is not belching soot and ash across swaths of homes adjacent to their facilities like a steel mill does, they're not poisoning rivers and lakes like chemical processing plants do, they're not turning pristine mountains into moonscapes like mining operations do, they're not creating lakes filled with liquified animal waste like huge hog farming and dairy operations do, and they're not leaving a legacy of cancer inducing waste that requires the permanent abandonment and quarantine of neighborhoods left unfit for human habitation.

    All in all I'd say Apple is a pretty good neighbor. They are not perfect, but the majority of the downsides associated with having Apple as a neighbor have more to do with poor (and greedy) community planners who don't adequately balance raw economic growth opportunities with infrastructure concerns and social impact considerations. Every control system needs a (negative polarity) feedback loop. Anything that's run open loop, even economic stimulus and growth, will quickly get out of control without feedback. From what we're seeing with Apple, they are actively contributing to the feedback loop by taking on expenses and mitigation measures on their own, whether or not they are required to do so based on their agreements with the local authorities.    
  • Reply 10 of 22
    macxpressmacxpress Posts: 4,964member
    Sounds to me like Cupertino just needs to balance their sheets properly and stop making Apple Pay for shit they cannot ordinary afford. Apple gives them MILLIONS of dollars. 
    JWSC
  • Reply 11 of 22
    entropys said: Edit:  I should explain less cynically. If the local government wants it raise more funds for more infrastructure, it should try to do so in a way that is not what is called a perverse incentive. A tax based on each employee that works there discourages an employer from employing more people in Cupertino, as it raises the cost of giving someone a job.
    Employers don't base hiring on taxes. They base it on what they expect to happen in the market. You'll notice that I already provided the proof of that: most corporations used the majority of the giant federal tax cut on stock buybacks and increasing profit, not on employees. And that's also the logic behind what Cupertino may do: companies aren't using that cut to benefit the general public, so it makes sense to take advantage of the historically low corporate taxation to do something that does benefit the public. That's no different than a company deciding to raise prices when the economy is in better shape.
  • Reply 12 of 22
    I live where we give companies free land and all sorts of bribes to create jobs, so the proposal seems at least borderline insane. However, I am forever afflicted with seeing facets of issues. From the city's view, they have 12,000 people, a larger number of them from out of town, rolling through every day, using infrastructure and creating congestion. (They probably also spend some money, but like a modern stadium, the new campus is designed to move outside consumption into the building.)

    Since I'm not a resident, my only stake is as a stockholder. This is mostly none of my beeswax.
  • Reply 13 of 22
    lkrupplkrupp Posts: 7,308member
    St. Louis, Missouri has a city earnings tax, in other words a city income tax. If you work in St. Louis your income is taxed whether you live in the city or not. Illinois residents who work in St. Louis find this unfair. Cupertino appears to be targeting the big pockets, specifically Apple. One thing is perfectly clear, government entities are addicted to cash and will do anything to get it. If this measure goes on the ballot you will see the usual “fairness” argument from big government supporters. You will see the anti-capitalist, anti-business tripe about how evil they all are and how their wealth needs to be distributed to the people. You know, the California way.
    jbdragonJWSC
  • Reply 14 of 22
    I'm assuming any company employing more than 5000 people could get around a head tax by splitting the corporation at the state level into divisional corporations. In this case, a Mac inc, iPhone hardware inc, iPhone software inc, etc. so each Corp is under 5000 employees. Any indication that Apple was thinking of moving their Corporate entity to someplace like Texas would also make waves. Although this sounds like a tit for tat against an over reaching city council and this type of solution doesn't seem very Apple-like, I'm sure the mere suggestions to the right people might put an end to the proposal?
    JWSC
  • Reply 15 of 22
    davidwdavidw Posts: 975member
    Corporations got a gigantic and unnecessary tax cut at the federal level and largely used it for stock buybacks or adding to the profit column, so it makes sense that local government would look to recoup a small percentage of that for infrastructure use that does benefit the general public, which would include Apple's own employees.
    You're not making sense, "recoup" is not even close to the right term to use. You're making it sound like the local government some how lost some tax revenue when the federal government lowered the federal corporate tax rate and thus must recoup some of it back with this employee tax. The local government did not lose any of their tax revenue, the are not "recouping" anything. They are just doing their usual money grab. It's no different that what the EU is doing. 

    Apple and other corporations are not using the extra profit they're going to be getting from the cut in federal corporate tax rate, for stock buy backs. They are using the overseas profits that they are bringing back into the US, where the profit will be subject to the new lower US tax. These overseas profits have already been accounted for in the profit column, when they were made. These overseas profits can not be added to the profit column again. I guarantee you, Apple will not be making another $230B in profit column, when they bring their overseas profits into the US and pay the US tax on it. 

    Here's the thing about the new federal corporate tax cut, corporation will no longer be able to hide foreign profits from US tax, by keeping it overseas. Apple will be paying US federal corporate tax on all their profits, whether made overseas or not. The federal tax on their US profits will go from 35% to 21%. But their US tax on foreign profits will go from 0% up to 21%. (I'm assuming they will still be able to deduct any foreign tax paid.)

    If Apple were to become less profitable in a few years, will they be able to "recoup" some of the employee tax they are going to be paying every year, if it were to pass? 
    urashidJWSC
  • Reply 16 of 22
    davidw said: You're not making sense, "recoup" is not even close to the right term to use. You're making it sound like the local government some how lost some tax revenue when the federal government lowered the federal corporate tax rate and thus must recoup some of it back with this employee tax. The local government did not lose any of their tax revenue, the are not "recouping" anything. They are just doing their usual money grab. It's no different that what the EU is doing. 

    Apple and other corporations are not using the extra profit they're going to be getting from the cut in federal corporate tax rate, for stock buy backs. They are using the overseas profits that they are bringing back into the US, where the profit will be subject to the new lower US tax. These overseas profits have already been accounted for in the profit column, when they were made. These overseas profits can not be added to the profit column again. I guarantee you, Apple will not be making another $230B in profit column, when they bring their overseas profits into the US and pay the US tax on it. 
    "Recoup" is an appropriate term to use since tax revenue, regardless of whether it's collected at the federal level or local level, is intended to benefit the general public. People that live in Cupertino can potentially benefit from taxes collected at any level of government, so huge losses in revenue at the federal level can be "recouped" by citizens at local or state levels. 

    As for your assertion that Apple didn't use the tax cut for buybacks, that isn't correct. Apple benefited from both the repatriation AND the overall corporate cut.

    https://www.vox.com/policy-and-politics/2018/5/2/17310770/apple-stock-earnings-buyback-dividend-tax-tim-cook-iphone
    edited July 2018
  • Reply 17 of 22
    SpamSandwichSpamSandwich Posts: 31,395member
    I'm assuming any company employing more than 5000 people could get around a head tax by splitting the corporation at the state level into divisional corporations. In this case, a Mac inc, iPhone hardware inc, iPhone software inc, etc. so each Corp is under 5000 employees. Any indication that Apple was thinking of moving their Corporate entity to someplace like Texas would also make waves. Although this sounds like a tit for tat against an over reaching city council and this type of solution doesn't seem very Apple-like, I'm sure the mere suggestions to the right people might put an end to the proposal?
    They could move their corporate headquarters to Texas and turn Apple Park into a series of retail stores.
    JWSC
  • Reply 18 of 22
    SoliSoli Posts: 9,263member
    ascii said:
    In the City of London all the companies that have offices there get a vote (might not be 100% correct about that but its something like that). It would be good if Apple and other companies in the area had a vote over this council.
    Do you specifically mean the City of London, as per your capitialization, or London the city?


  • Reply 19 of 22
    SoliSoli Posts: 9,263member
    I expect this to fall apart as I believe Apple has more than enough leverage in the city to prevent this from happening.

    I'm assuming any company employing more than 5000 people could get around a head tax by splitting the corporation at the state level into divisional corporations. In this case, a Mac inc, iPhone hardware inc, iPhone software inc, etc. so each Corp is under 5000 employees. Any indication that Apple was thinking of moving their Corporate entity to someplace like Texas would also make waves. Although this sounds like a tit for tat against an over reaching city council and this type of solution doesn't seem very Apple-like, I'm sure the mere suggestions to the right people might put an end to the proposal?
    They could move their corporate headquarters to Texas and turn Apple Park into a series of retail stores.
    Do you really think that a mall with 2.8 million square feet for a city of 60 thousand would be profitable enough that Apple could spend another decade and $5 billion to build another HQ in another state? Can you detail the scenario where you think this would make sense?
    edited July 2018
  • Reply 20 of 22
    davidwdavidw Posts: 975member
    davidw said: You're not making sense, "recoup" is not even close to the right term to use. You're making it sound like the local government some how lost some tax revenue when the federal government lowered the federal corporate tax rate and thus must recoup some of it back with this employee tax. The local government did not lose any of their tax revenue, the are not "recouping" anything. They are just doing their usual money grab. It's no different that what the EU is doing. 

    Apple and other corporations are not using the extra profit they're going to be getting from the cut in federal corporate tax rate, for stock buy backs. They are using the overseas profits that they are bringing back into the US, where the profit will be subject to the new lower US tax. These overseas profits have already been accounted for in the profit column, when they were made. These overseas profits can not be added to the profit column again. I guarantee you, Apple will not be making another $230B in profit column, when they bring their overseas profits into the US and pay the US tax on it. 
    "Recoup" is an appropriate term to use since tax revenue, regardless of whether it's collected at the federal level or local level, is intended to benefit the general public. People that live in Cupertino can potentially benefit from taxes collected at any level of government, so huge losses in revenue at the federal level can be "recouped" by citizens at local or state levels. 

    As for your assertion that Apple didn't use the tax cut for buybacks, that isn't correct. Apple benefited from both the repatriation AND the overall corporate cut.

    https://www.vox.com/policy-and-politics/2018/5/2/17310770/apple-stock-earnings-buyback-dividend-tax-tim-cook-iphone
    But the Feds did not lose any tax money with the tax cut. At least not yet. Apple would not have brought those overseas profits into the US and use it for stock buyback, if the Feds did not lower the corporate tax rate. Those profits would still be sitting in foreign accounts, untaxed by the US. So what is being recouped?

    The Feds will see an increase of corporate tax collected, until most of those foreign profits are brought back into the US and taxed, even at the lower rate. For the next few years, there will be an increase of corporate tax revenue as coprporations bring their overseas profits into the US. After that, all overseas profits will be subject to US tax, so we will not know how much this lowering of the corporate tax rate will reduce tax revenue, until all the overseas profits are taxed in the US. There may not be a reduction at all. 

    You may see it as a 14% tax revenue loss on those overseas profits. But you would be wrong. It's a 21% tax revenue gain on those overseas profit. (Discounting any foreign tax already paid.) It's going to be a $38B tax gain on the over $230B of overseas profit, by Apple alone.

    It's the the same silly argument use by some when a city or State offer a corporation a tax break as an incentive to build a HQ in their city or State. They claim that they will be losing tax revenue by offing the tax break. When in reality, they are gaining what tax revenue they will collect, as the corporation would not have built their HQ there, if it weren't for the tax break incentive.

    CA has a corporate tax on corporations doing business in the State. When Apple bring those overseas profit into the US, I'm sure that CA will also be able to tax it. And CA did not lower their corporate tax rate. 

    I will repeat. The City of Cupertino will not lose any tax revenue when the Feds lowered the corporate tax rate. And the Feds has not yet lost any tax revenue, when they lowered the corporate tax rate. If the tax rate was not lowered, as an incentive to bring those overseas profit into the US, it would still be parked overseas, untaxed by the US and CA.

    There is no "recouping" of any lost tax revenue as there is no lost in tax revenue. Not yet, at least.

    https://seekingalpha.com/article/4172785-laffer-curve-strikes-lower-tax-rates-produced-revenue

    BTW- Apple will also use some of that money to give every Apple employee, below senior management, a bonus of $2500 in restricted stocks. That's every Apple employee, Worldwide. Including full time and part time Apple Store employees.  

    https://www.theverge.com/2018/1/17/16902812/apple-2500-bonus-restricted-stock-units-tax-code-employees

    https://taxfoundation.org/californias-corporate-income-tax-rate-could-rival-the-federal-rate/

    https://www.pacificresearch.org/theyre-baaack-higher-corporate-tax-rates-on-california-companies/
    edited July 2018
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