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Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

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Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#31

Post by wastedhours »

epanchin wrote: post #25
jpttsn wrote: post #20

Earlier quoted context omitted.

VIPs don’t have to pay to get in to nightclubs. Do you think that’s a huge cost? If so, why would club owners agree to it?

Not a very good example. VIPs don’t increase the cost for other punters.

Often VIPs are paid by the clubs to appear, which is indirectly passed onto other punters as a marketing cost.

Here, you're essentially bringing in a whole bunch of new burden on infrastructure, but getting proportionally less back in order to support it (waiting on some inflection based on future sales tax or property taxes etc is not a guarantee, especially as campuses can be out in the sticks so drawing workers from a wider area). Either you take hits on that, or pass the extra needed cost onto other taxpayers.

I'm not sure whether or not the net is positive or negative, but the second order effects do need to be paid for somehow.

Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#32

Post by adventured »

buboard wrote: post #24

Tangentially, has apple moved any kind of foreign earnings to the US after the recent tax cuts? Also, 90000 thats an impressively low number of jobs

90,000 is not an impressively low number of jobs. It makes Apple one of the 40-50 largest employers in the US and one of the five largest US tech employers.

Back in January Apple publicly announced their plans for repatriation. While Apple doesn't give routine updates on exactly what it's doing with every dollar of cash it holds, they've stopped accumulating debt and have begun reducing it. Previously, for years, they were aggressively accumulating debt to fund their capital return programs (which require immense sums of capital in the US in one form or another). To fund that they either have to use debt in the US or have the domestic cash holdings to cover it.

"Apple Inc. said it will bring hundreds of billions of overseas dollars back to the U.S., pay about $38 billion in taxes on the money and spend tens of billions on domestic jobs, manufacturing and data centers in the coming years."

"Apple has the largest offshore cash reserves of any U.S. company, with about $252 billion at the end of September, the most recently reported fiscal quarter. The tax rate indicates that Apple is likely bringing back a majority of its overseas cash back to the U.S., leaving only a small portion for international investments like retail stores."

https://www.bloomberg.com/news/articles/2018-01-17/apple-exp...

Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#33

Post by scarface74 »

nostrebored wrote: post #17
jrs95 wrote: post #15

Earlier quoted context omitted.

Well, there's going to be tax revenue coming from those jobs even if there are less or no taxes to the business itself, before you even consider the money that those employees and potentially even the business itself will spend within the community. I don't think it's as simple as tax incentives inherently being a cost for the community.

You're being downvoted, but nobody is engaging with the sensible points that you're making. While viewing these in the lens of a corporate handout, it is definitely a practice that deserves a close look, pretending that entire state governmental bodies in the US are acting outside of their own best interest (both fiscally and politically) deserves a conversation

In some cases they are. There was an episode of Planet Money where they were discussing Kansas City Kansas and Kansas City Missouri competing for the same companies and companies going back and forth across the state border to whoever would give them the best deal.

The companies were squeezing all of the benefits from having the company be there out of the city.

It took decades for some cities to wise up and realize that having a sports franchise wasn’t worth all of the incentives they give the leagues.

Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#34

Post by dmos62 »

jpadkins wrote: post #26
jacek wrote: post #8

Big corps love to brag about "adding jobs", but don't like to brag about the "tax incentives" they are getting. There are usually huge costs for the whole community. Austin tax incentives for Apple seem to be relatively small [1], but Foxconn factory in Wisconsin is an extreme case. I highly recommend the Replay All podcast episode on this [2][3] [1] https://www.statesman.com/news/20120901/austin-council-oks-8... [2]…

it's weird to frame net new revenue as a "huge cost the whole community" Taking less money from someone who is building a business in your area is not a cost. They have a choice on where to build, and tax burden is one of many factors in that choice.

I see what you're saying, but, to paraphrase the article, giving a billion dollar company an 8.6 million tax break when you're shutting down social programmes can be a tough pill to swallow.

On a parallel note, I'd like to underline just how good the tech giant has it. Since it can move anywhere, you have to give it excessive gifts for him to come to you. So the giant gets those rewards, simply because he's a giant.

Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#35

Post by bluecalm »

ip26 wrote: post #27
jrs95 wrote: post #15

Earlier quoted context omitted.

Well, there's going to be tax revenue coming from those jobs even if there are less or no taxes to the business itself, before you even consider the money that those employees and potentially even the business itself will spend within the community. I don't think it's as simple as tax incentives inherently being a cost for the community.

If we presume that taxes are set to the level required to provide agreed-upon levels of service (roads, safety, schools, etc) and a new company gets to pay less taxes per capita, what happens now as the citywide average tax income per head starts to decline due to sweetheart tax breaks? Additional tax income needs to cover the additional demand for services, otherwise it's a net loss for the community's standard of l…

But they aren't especially tax on company profits. There are many big inefficient polluters who pay lower wages and little profit tax. The additional demands will be covered by taxing relatively big salaries Apple pays and sales taxes those new employees pay.

Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#36

Post by ricardobeat »

dmos62 wrote: post #34
jpadkins wrote: post #26

Earlier quoted context omitted.

it's weird to frame net new revenue as a "huge cost the whole community" Taking less money from someone who is building a business in your area is not a cost. They have a choice on where to build, and tax burden is one of many factors in that choice.

I see what you're saying, but, to paraphrase the article, giving a billion dollar company an 8.6 million tax break when you're shutting down social programmes can be a tough pill to swallow. On a parallel note, I'd like to underline just how good the tech giant has it. Since it can move anywhere, you have to give it excessive gifts for him to come to you. So the giant gets those rewards, simply because he's a giant.

Why is it tough? The choice is not between those 8.6m and the discounted taxes, it is between that and _zero_. Revenue doesn’t come out of thin air.

Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#37

Post by yurishimo »

scarface74 wrote: post #30
ip26 wrote: post #28

Earlier quoted context omitted.

If they are adding people to your community- what roads will these new people be driving on? What schools will their children be attending? The additional revenue is not being added in a vacuum.

The new people will be paying sales taxes, property taxes and state income taxes.

Though usually not enough to make up the difference in incentives. If we take the Amazon NY incentives at face value, each employee needs to pay $25k in taxes to make up the difference just on the initial tax break alone. That doesn’t count extra expenditures for expanded public transportation or nearby development. That’s also if amazon hires the proposed 40k new employees on day one, which they won’t.

There’s a good argument to be made that spending that money elsewhere would provide better outcomes and on shorter timelines than giving one of the largest companies in the world a tax break.

Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#38

Post by ricardobeat »

wastedhours wrote: post #31
epanchin wrote: post #25

Earlier quoted context omitted.

Not a very good example. VIPs don’t increase the cost for other punters.

Often VIPs are paid by the clubs to appear, which is indirectly passed onto other punters as a marketing cost. Here, you're essentially bringing in a whole bunch of new burden on infrastructure, but getting proportionally less back in order to support it (waiting on some inflection based on future sales tax or property taxes etc is not a guarantee, especially as campuses can be out in the sticks so drawing workers fr…

The new employees are also going to be taxpayers. Does any city heavily rely on tax revenue from businesses to maintain critical infrastructure? It should come almost entirely from individual / property tax revenue / federal grants, corporate tax usually accounts for a minor slice of total budget.

Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#39

Post by dwighttk »

scarface74 wrote: post #33
nostrebored wrote: post #17

Earlier quoted context omitted.

You're being downvoted, but nobody is engaging with the sensible points that you're making. While viewing these in the lens of a corporate handout, it is definitely a practice that deserves a close look, pretending that entire state governmental bodies in the US are acting outside of their own best interest (both fiscally and politically) deserves a conversation

In some cases they are. There was an episode of Planet Money where they were discussing Kansas City Kansas and Kansas City Missouri competing for the same companies and companies going back and forth across the state border to whoever would give them the best deal. The companies were squeezing all of the benefits from having the company be there out of the city. It took decades for some cities to wise up and realize…

I guess (e.g) Las Vegas, Atlanta, and Seattle didn’t get the memo. Odd since Seattle and Atlanta recently lost franchises that they’d add new ones if it wasn’t worth it.

Re: Apple to build campus in Austin and sites in Seattle, San Diego and Culver City

#40

Post by minikites »

ricardobeat wrote: post #36
dmos62 wrote: post #34

Earlier quoted context omitted.

I see what you're saying, but, to paraphrase the article, giving a billion dollar company an 8.6 million tax break when you're shutting down social programmes can be a tough pill to swallow. On a parallel note, I'd like to underline just how good the tech giant has it. Since it can move anywhere, you have to give it excessive gifts for him to come to you. So the giant gets those rewards, simply because he's a giant.

Why is it tough? The choice is not between those 8.6m and the discounted taxes, it is between that and _zero_. Revenue doesn’t come out of thin air.

That's not the choice either. How about no tax breaks for companies, we enforce existing corporate taxes on those companies, and we raise the marginal income tax rate on very high earning individuals?
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