Apple touts Cupertino public works investments ahead of employer tax vote
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.
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.
Comments
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.
edit:sp
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.
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.
Since I'm not a resident, my only stake is as a stockholder. This is mostly none of my beeswax.
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?
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
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?
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/