Cupertino's mayor: Apple 'abuses us' by not paying taxes

The Guardian ^ | 05/05/16 | Nellie Bowles

[Snickering Hound]

Apple now has a $300 million campus northwest of Austin, Texas...

[ArcadeQuarters]

The new Apple headquarters there looks about as big as a football stadium. Thousands of employees will be paying taxes to a town of only 60,000 residents. It’s never enough though. If governments could enforce a 100% tax rate, they would.

[roadcat]

Apple now has a $300 million campus northwest of Austin, Texas...

And several thousand employees there, soon to double. I wish more tech companies would build here instead of China, but Apple is more the exception than the rule (Apple makes computers here!).

[Libertynotfree]

Mayor is an idiot. I am not saying the taxes policy is right or wrong. If a corporation has a manufacturing plant and doing business in other country, the company only requires to pay taxes in other country. If you don’t like it, let President Trump fixes it, all you have to do is voting him on national presidential race.

[Nifster]

Yes there are now

[Swordmaker]

Liberal Mayor of Cupertino complaining that its largest taxpayer and employer, Apple, isn't paying taxes. Say what? Just four years ago when Steve Jobs made the presentation for the new headquarters to the Mayor and City Council they were praising Apple as a good corporate citizen of Cupertino and talked about the taxes Apple paid into the city coffers. Jobs even mentioned that many, if not most of the Apple employees lived in the area and actually bicycled to work because they lived so close, and that more would be likely to live and buy and pay taxes in Cupertino when the new headquarters was finished. — PING!

Liberal Mayor of Cupertino Complains Apple Is
Not Paying Enough Local Taxes
Ping!

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[Swordmaker]

How's that, Apple pays tax on money held overseas. Wow, what a crime!

However, they have ALREADY paid income taxes on that "held" money. What they are talking about is money invested and the Capital Gains taxes they are now earning on it. . . which where they are earning it in Ireland is paid only on the profits it makes. NOT on the total amount held. Idiots. They want a a share of the entire pot.

They are not talking about the Income taxes on the sales made on products sold. This is the shell game they are playing with the public. Apple's effective tax rate is actually 27.9%.

[Aria]

Cupertino must be the recipient of many millions of dollars a year from Apple doing business in their area. Does the mayor want them to leave?

I work in the tax dept for a well known company and it’s pretty much understood that if we left the city we’re in would go into a depression.

[Swordmaker]

This article is poorly written, and written by somebody who doesn’t understand the difference between property tax and business profit tax. After reading it, I have no idea if Apple pays full property tax, or if the city was dumb enough to give them an incentive. And unless this city has a payroll tax, any discussion of off-shore accounts etc is moot, as far as this mayor is concerned.

Apple pays the full freight property taxes. They were given no incentive to remain in Cupertino and in fact were enticed by quite a few other states with offers of ZERO property and state income taxes to move. They ignored them, preferring to stay in California, instead of forcing their employees to move.

Under Proposition 13, in California, that property tax on that building will be 1% of its assessed value. We know it is costing Apple about $2.8 billion to build plus the cost of the land acquisition which at the moment i don't recall. There is 155 acres on the campus, so pull a figure of $60,000 per acre out of thin air gives us with costs about $10 million, add improved buildings at another $130 million for HP's old campus, and let's round it all to $3 billion assessed valuation. Prop 13 limits property taxes to 1% of the value, so every year the local government will get $30,000,000 in property taxes, plus allowed assessments over and above that, usually about 30% extra added to the tax bill in "ad valorem fees." Call it $39 million per year. So, in just ten years, the local governments would get a $390 million.

Another thing this idiot mayor is missing is that Cupertino has an 8.75% Sales Tax, of which only 8% is the state portion. That means when Apple furnishes that building with new fixtures, Cupertino will be getting 0.75% of the sales tax on all those purchases or equipment put into service. They should be getting that on all the building materials being put into that building as well.

Rule of thumb is that labor and fees are 50% of the cost of any project. Ergo, building materials on a $2.8 billion building project would be $1.4 Billion. Let's apply a little sales tax math to that figure: there's about $10 million of the $100,000,000 right there.

Cupertino has a city Income Tax of 6%. . . which is applied to anyone working in the city. Apple estimates that it will employ 14,000 workers at the headquarters plus 2,600 more at 1 Infinite Loop, the old headquarters building, for a total of 16,600 employees each earning, again a wild assed guess, more than $100,000 per year which we will use as an average number for our example. Oh, my. Cupertino receives almost $100,000,000 in INCOME TAXES from the employees of Apple which they will lose if they chase Apple away by demanding too much.

[Swordmaker]

And I just peeked at the map - Apple’s complex is right next to the interstate. I imagine the bulk of any traffic infrastructure problems are state/federal concerns...and it looks like an 8 lane freeway already.

Steve Jobs pointed out that the increase in traffic due to Apple locating on the old HP plant location would be about 20% greater, but many of Apple's employees bicycle to work. Apple was replacing land use of 80% parking lot to 20% parking by putting it under ground and under the buildings, and increasing trees by about about 40% from 3400 to 6000, and reducing building coverage of the land drastically, yet being able to more efficiently use the land. Apple also was going to generate its own energy through solar and natural gas, using the grid as a back-up.

The highway and streets were already able to handle the traffic. My recollection of that freeway is that it's a ten lane in that area.

[Swordmaker]

Did the city get the required system development fees and infrastructure fees required? Any large building like that is going to have to pay for new traffic infrastructure, sewer, electricity, water, utilities, fire department, police department, and all other impact fees. If the council of Cupertino was too dumb to realize this by ‘shiny’ things apple was going to build they have no one to fault but themselves. But I doubt this is the case. As with most large businesses they will get tax incentives and the city more than makes up for it by a new tax base brought in. Although...I have a feeling it will be H1B visas who send all their money back home to India and China.

Apple has approximately 1500 H1B employees nationwide for which they apply and renew visas every year. That's out of approximately 60,000 employees in the USA. Apple is one of the lowest H1B utilizers in the tech industry. Apple does not even use overseas tech support for its US customer base. You call Apple tech support in the US, you will be talking to an English as a first language speaking US citizen.

[ProtectOurFreedom]

This abused and battered spouse won’t leave her sugar-daddy. She may eventually piss him off enough where he doesn’t treat her as well.

[Swordmaker]

Cupertino must be the recipient of many millions of dollars a year from Apple doing business in their area. Does the mayor want them to leave?

I work in the tax dept for a well known company and it’s pretty much understood that if we left the city we’re in would go into a depression.

"The local area of Cupertino has missed revenues from Hewlett-Packard since they left the site however the construction of Apple Campus 2 has lead to the City Council's budget being boosted by an extra $30.6 million. $8 million of the extra revenue will be used to pay off the city retiree medical unfunded liability, with another $8.3 million being used to fund pavement maintenance. The remaining extra funding will be transferred to the city's capital reserve. — Source.

[Swordmaker]

Under Proposition 13, in California, that property tax on that building will be 1% of its assessed value. We know it is costing Apple about $2.8 billion to build plus the cost of the land acquisition which at the moment i don't recall. There is 155 acres on the campus, so pull a figure of $60,000 per acre out of thin air gives us with costs about $10 million, add improved buildings at another $130 million for HP's old campus, and let's round it all to $3 billion assessed valuation. Prop 13 limits property taxes to 1% of the value, so every year the local government will get $30,000,000 in property taxes, plus allowed assessments over and above that, usually about 30% extra added to the tax bill in "ad valorem fees." Call it $39 million per year. So, in just ten years, the local governments would get a $390 million.

I ran across some updated figures. The cost of the project has increased to $5 Billion. Ergo, the yearly property tax bill will be more like $65 million. In ten years, that's $650 million to the local government entities.

Sales tax to the City of Cupertino on the construction materials on that would be on an estimated $2.5 billion. . . $18,750,000.

I just had a thought that since the construction workers are earning their income inside the City Limits of Cupertino, they would be required to pay Cupertino Income Taxes. . . on the labor and also on the profits of the contractors. That's another $2.5 billion at 6% to the City of Cupertino. Perhaps $150 million, depending on exclusions and deductions.

This Liberal Mayor wants to have his cake and eat it too.

[conservatism_IS_compassion]

It’s never enough though. If governments could enforce a 100% ^200% tax rate, they would.

Back when the late Sen. Arlen Spector was portraying a Republican, he tried to illustrate the folly of increasing a tax rate and expecting revenue to always go, not only up, but up in direct proportion to the tax rate. He interviewed a witness before a committee, and in doing so he asked the CBO rep how much revenue they would score for a certain tax at a certain rate. He started out at the current rate, and incrementally increased the (notional) tax rate, and asked what the scored revenue would be.

The witness's answers betrayed an exactly linear assumption, unabated all the way to a 100% notional tax rate, at which Sen. Spector announced, “I give up!” Upon reflection, I concluded that he should have then doubled and redoubled the notional tax rate to 200%, 400%, whatever it took. At some point the witness would have to fail the laugh test.

[TheBattman]

Typical hyper-liberals - no revenue stream is ever big enough for their liberal taste or spending habits. Apple has likely contributed more to that city than any other entity ever... But hey... they have already spent a fortune building the new building - too late for Apple to back out now, so lets go for blood... Sad

[MoochPooch]

This Liberal Mayor wants to have his cake and eat it too.

Don't ALL liberals?

[Swordmaker]

Don't ALL liberals?

The word "Liberal" was the first word hijacked by Statists. The real liberals are those of us who truly believe in the liberal idea that individuals do not need to be controlled by a central authority as it was throughout 99% of human history. I wish there were a way for us to seize back that lovely word for us to claim as our own.

They are the ones who want to return to the old ways of centralized control, of a king making all decisions for them, that they all can bow down to someone who will relieve them of having to make the tough choices in life that came with freedom and liberty. They want to climb back into the comfortable womb of servitude to a central mother government who will see to all their needs and are willing to give it their fealty and their wealth to accomplish it.

[MoochPooch]

I guess nowadays they’re called “Socialists.” :-)

[Swordmaker]

I guess nowadays they’re called “Socialists.” :-)

No, I think the latest hijacked word is "Progressives," as if where they are going is somehow an advance down the road to somewhere progress should go. . . instead of where socialism has already been and failed, miserably.