It's odd to see so many comments defending Apple on the basis of their $100 million pledge. I guess you all just skimmed the article and didn't really read it? They pledged up to $100 million. In other words, they're not spending $100 million.
Iowa's handout to Apple illustrates the folly of corporate welfare deals
81–90 of 242 posts
Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals
#82These are property tax abatements. I don't see the big deal. Apple has to pay the property tax equal to the farmland for the next 20 years instead of the much higher tax on the datacenter property. Who cares? Unless someone is arguing the datacenter is going to use a lot of tax funded city services (police? fire? ... ?), Waukee isn't giving Apple anything. On top of that Apple is pledging to give them $100M for vario…
Exempting wealthy corporations while individuals are squeezed ever tighter... eventually there will be pitchforks and torches.
Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals
#83Earlier quoted context omitted.
What? Being a Delaware corporation doesn't let you avoid any state taxes. This is legally illiterate.
https://www.theatlantic.com/business/archive/2016/10/dont-bl... >... it’s important to understand how the “Delaware loophole” works: A company sets up a subsidiary in Delaware, and transfers an intangible part of its business there—say, its trademark or naming rights. Then its other locations outside of Delaware pay money to the subsidiary in order to use that trademark. Since intangible assets are not taxed in Delaw…
Setting up a sham subsidiary in Delaware and doing a tricky tax inversion is completely different from "incorporating in Delaware to avoid taxes."
YC rightly recommends incorporating in Delaware because the state has a predictable structure of corporate law and courts that are expert in applying it.
Implying that incorporation in Delaware is inherently some kind of tax dodge is bordering on slanderous.
Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals
#84These are property tax abatements. I don't see the big deal. Apple has to pay the property tax equal to the farmland for the next 20 years instead of the much higher tax on the datacenter property. Who cares? Unless someone is arguing the datacenter is going to use a lot of tax funded city services (police? fire? ... ?), Waukee isn't giving Apple anything. On top of that Apple is pledging to give them $100M for vario…
They will use an enormous amount of (renewable) electricity, and which Iowa has subsided significantly.
I don't think anyone reasonable would argue with the state's portion of the tax abatement ($20M). 80% off property taxes in year one decreasing steadily to 0 through five years. That's just good economic development.
The rest of the tax abatements are _local_ government property taxes. Given the large pledge of funding otherwise, who cares. This is not money that would go to subsidizing energy programs. It would go to doing whatever the local government does, like city maintenance and parts of the police, fire, schools, etc.
Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals
#85Earlier quoted context omitted.
Why would Iowa agree to an amount of revenue that doesn't even cover the cost of additional services?
because the decision makers on this deal are not those who have to manage the costs down the row? Pretty classic principle-agent problem
I mean, that applies to all local government actions. And in any case, we don't need to speculate. You can just total up these costs.
Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals
#86These are property tax abatements. I don't see the big deal. Apple has to pay the property tax equal to the farmland for the next 20 years instead of the much higher tax on the datacenter property. Who cares? Unless someone is arguing the datacenter is going to use a lot of tax funded city services (police? fire? ... ?), Waukee isn't giving Apple anything. On top of that Apple is pledging to give them $100M for vario…
Exempting wealthy corporations while individuals are squeezed ever tighter... eventually there will be pitchforks and torches.
And maybe there will be autonomous crowd control drone....
And seriously. Going by history, people will suffer plenty before they are willing to become subversive for an economic cause.
Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals
#87Earlier quoted context omitted.
https://www.theatlantic.com/business/archive/2016/10/dont-bl... >... it’s important to understand how the “Delaware loophole” works: A company sets up a subsidiary in Delaware, and transfers an intangible part of its business there—say, its trademark or naming rights. Then its other locations outside of Delaware pay money to the subsidiary in order to use that trademark. Since intangible assets are not taxed in Delaw…
Setting up a sham subsidiary in Delaware and doing a tricky tax inversion is completely different from "incorporating in Delaware to avoid taxes." YC rightly recommends incorporating in Delaware because the state has a predictable structure of corporate law and courts that are expert in applying it. Implying that incorporation in Delaware is inherently some kind of tax dodge is bordering on slanderous.
Implying that not taking advantage of every legal avenue to minimizing tax burden while incorporated in Delaware is exercising your fiduciary duty to your investors is willful ignorance.
Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals
#88These are property tax abatements. I don't see the big deal. Apple has to pay the property tax equal to the farmland for the next 20 years instead of the much higher tax on the datacenter property. Who cares? Unless someone is arguing the datacenter is going to use a lot of tax funded city services (police? fire? ... ?), Waukee isn't giving Apple anything. On top of that Apple is pledging to give them $100M for vario…
why is there a different tax for farmland and for datacenters? Because we want datacenters to pay more! I understand making some deals, but this is slightly much. You wouldn't make a deal like "Oh if you open a bank here we'll exempt you from capital requirements".
Property tax is based on the assessed value of the land and what's (permanently) on it. A lot with a house is assessed higher than one that's vacant. A parcel of farmland is assessed quite a lot lower than one with a hundred million dollar data center built on it. The tax abatement says Apple gets to pay the property tax for X years assessed at the value before they build anything.
Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals
#89These are property tax abatements. I don't see the big deal. Apple has to pay the property tax equal to the farmland for the next 20 years instead of the much higher tax on the datacenter property. Who cares? Unless someone is arguing the datacenter is going to use a lot of tax funded city services (police? fire? ... ?), Waukee isn't giving Apple anything. On top of that Apple is pledging to give them $100M for vario…
> Who cares? The people in Iowa who have to subsidize this and don't have the billions sitting in the bank that Apple does? I can't believe anyone really seriously takes this side of this argument.
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Re: Iowa's handout to Apple illustrates the folly of corporate welfare deals
#90It's odd to see so many comments defending Apple on the basis of their $100 million pledge. I guess you all just skimmed the article and didn't really read it? They pledged up to $100 million. In other words, they're not spending $100 million.
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