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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

#161

Post by bogomipz »

kiallmacinnes wrote: post #150
bogomipz wrote: post #118

Earlier quoted context omitted.

>" I'll bet the costs you speak of are covered by income taxes and the corporate tax, with a little leftover per employee (so - a large pot of extra money at the end of the day)." So you believe all local governments run a budget surplus? You can't be serious. You realize there operating expenses and capital expenses right? Maintaining an existing bridge and building aa new bridge are very different budgetary conside…

Of course not.. But .. What on earth does that have to do with what amounts to giving a quantity discount to large employers? Yes, if they didn't give a discount, and somehow managed to keep the "sale" anyway, there would be more money in the register - great! However the reality is that without the discount, there is no sale, and no additional money in the register. It may be that the discount is too great, that's e…

>"But .. What on earth does that have to do with what amounts to giving a quantity discount to large employers?"

It's mostly certainly not a "quantity discount." These corporation aren't "buying" anything from these cities.

If Apple comes in sets up shop on 100 acre campus in your town and gets tax breaks to do so then your town forfeits the equivalent tax revenue another company would have paid for the same parcel of land. There is a huge opportunity cost involved, nothing is free.

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

#162

Post by mikeyouse »

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.

Neither do costs.. The concern is that adding a huge new "customer" to the community without adding any additional revenue can be a losing proposition. The roads, sewers, power lines, schools, hospitals etc. all see increased demand and in extreme situations, the municipality sees zero extra money to pay for it. So the existing "customers" in the community see degraded service to make way for an outside organization.

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

#163

Post by longerthoughts »

specialist wrote: post #56
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.

Is it fair for the Goliaths to get special consideration? Why doesn't everyone get the same deal?

Because the Goliaths bring more to the table in terms of revenue and bragging rights for politicians who can say they brought [insert high number here] jobs to their city. I'm skeptical of these deals and not sure the math works out for the average taxpayer but I'm not surprised that cities are operating this way.

From a city's perspective, why should companies of vastly different sizes, impacts, and expected lifetimes have the same leverage in terms of negotiating tax benefits today? Companies are getting the same "deal" in the sense that they will be eligible for these benefits when they bring enough to the table to make a city desperately want them.

I'm not saying it's just, but creating the "same deal" for all companies is only likely to occur if it's federally enforced - otherwise there will always be cities willing to offer these incentives.

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

#164

Post by longerthoughts »

kiallmacinnes wrote: post #80
bogomipz wrote: post #45

Earlier quoted context omitted.

>"Taking less money from someone who is building a business in your area is not a cost" Let's look at what that someone will be expecting of your area - working roads, a fire department, a police department, public transportation, a school system, a library, a park, emergency services. How is an influx of of potentially much more people consuming those services not a cost?

That certainly is a cost. But it's not what the parent poster was saying... I'll bet the costs you speak of are covered by income taxes and the corporate tax, with a little leftover per employee (so - a large pot of extra money at the end of the day).

You're making drastic assumptions about the relative quantities of your variables. It's feasible that the math works out but far from guaranteed.

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

#165

Post by JeremyNT »

throwaway5752 wrote: post #127

Big loss for RTP area in North Carolina which was favored to land it, but got nothing. Guess they pay for the disgraceful performance of the NC General Assembly in the past several years - at least enough that TX tax policies won out.

As a resident of the Triangle, it sure doesn't feel like a big loss to me. Do we actually benefit by handing out tax breaks to a megacorp just so it can relocate a few thousand jobs to the area?

We've got our own problems related to growth already, we surely don't need to grow even faster - especially not by adding companies that effectively contribute nothing back financially to support all the needed infrastructure (after all the tax breaks).

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

#166

Post by thaumasiotes »

karmajunkie wrote: post #104
thaumasiotes wrote: post #19

Earlier quoted context omitted.

This doesn't make much sense. Transit follows population. You wouldn't build transit before there was a need for it.

That's exactly when you build it if you want to do it cheaply and control where the growth happens. Growth follows infrastructure.

No, growth following infrastructure is the "bridge to nowhere" model. Growth does not follow infrastructure, infrastructure follows growth.

Paying for infrastructure you can't use just means you're poorer and less able to grow.

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

#167

Post by thaumasiotes »

ghaff wrote: post #22
thaumasiotes wrote: post #19

Earlier quoted context omitted.

This doesn't make much sense. Transit follows population. You wouldn't build transit before there was a need for it.

In fact, population has historically often grown up around rail and transit lines. It's one argument for light rail vs. buses; people buying and developing along along a line are far less exposed to the transit moving than in the case of a bus. So, no. It's normally not a great idea to build a bunch of random housing and hope a total transportation mess--which already describes much of the Bay Area--will hopefully be…

Yes, population centers have historically grown up around trade routes. Population grows around transit that is already in use, in order to provide services along the route.

But a route that nobody uses doesn't have any surplus around which a population would grow.

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

#168

Post by rlanday »

saagarjha wrote: post #47
adventured wrote: post #32

Earlier quoted context omitted.

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, the…

You didn’t mention it, but I thought I’d bring it up: the majority of those 90,000 jobs are in retail, not corporate. So they’re not necessarily “tech” jobs.

Are you sure? Wikipedia says Apple has 271 stores in the US. For your claim to be true, the average Apple store in the US would have to employ at least 45,001/271 = 166.1 people.

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

#169

Post by kiallmacinnes »

bogomipz wrote: post #161
kiallmacinnes wrote: post #150

Earlier quoted context omitted.

Of course not.. But .. What on earth does that have to do with what amounts to giving a quantity discount to large employers? Yes, if they didn't give a discount, and somehow managed to keep the "sale" anyway, there would be more money in the register - great! However the reality is that without the discount, there is no sale, and no additional money in the register. It may be that the discount is too great, that's e…

>"But .. What on earth does that have to do with what amounts to giving a quantity discount to large employers?" It's mostly certainly not a "quantity discount." These corporation aren't "buying" anything from these cities. If Apple comes in sets up shop on 100 acre campus in your town and gets tax breaks to do so then your town forfeits the equivalent tax revenue another company would have paid for the same parcel o…

> It's mostly certainly not a "quantity discount." These corporation aren't "buying" anything from these cities.

The city is selling its land (in quantity) and talent pool (in quantity), and is giving a tax break (a discount).

> If Apple comes in sets up shop on 100 acre campus in your town and gets tax breaks to do so then your town forfeits the equivalent tax revenue another company would have paid for the same parcel of land.

If Bestbuy sells Microsoft 1000 laptops at a 30% discount, Bestbuy has forfeited the revenue they would have made from doing 1000 single unit+no discount sales. Despite the business making far less than maximum revenue, businesses choose to do this all the time as it created greater value for them in the end. Cities are doing essentially the same thing with big companies.

You just can't look at a discount and naively equate that to a $ loss in the city bank account, just as a business can't do this when they sell a physical good.

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

#170

Post by kiallmacinnes »

longerthoughts wrote: post #164
kiallmacinnes wrote: post #80

Earlier quoted context omitted.

That certainly is a cost. But it's not what the parent poster was saying... I'll bet the costs you speak of are covered by income taxes and the corporate tax, with a little leftover per employee (so - a large pot of extra money at the end of the day).

You're making drastic assumptions about the relative quantities of your variables. It's feasible that the math works out but far from guaranteed.

I am, I tried to make that clear with the "I'll bet..".. we don't have anywhere near enough insight to know for sure!
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