Silicon Valley weighs per-employee tax for large employers

“The Silicon Valley cities that are home to Google and Apple Inc. are considering the kind of per-employee tax that Seattle recently drew criticism for imposing,” Nour Malas reports for The Wall Street Journal. “Mountain View, Calif., and nearby Cupertino are both weighing possible ballot measures this fall. Officials said the taxes could raise money to help manage local problems tied to rapid growth, including traffic and a need for affordable housing. ‘We are pursuing a more aggressive agenda to respond to our housing and transportation crises, which have both gotten significantly worse in the last year,’ said Rod Sinks, the vice mayor of Cupertino, where Apple is based.”

“Executives from both companies have in the past pointed to their engagement in community improvement efforts,” Malas reports. “Apple, for example, contributed $70 million toward traffic improvements and affordable housing in the area as part of its $5 billion project for its new corporate campus, which houses some 12,000 employees.”

“Last week, the Seattle City Council passed a measure that will tax the biggest companies in the city $275 per employee,” Malas reports. “The council scaled back a higher proposed per-employee tax after Amazon.com Inc., Seattle’s biggest employer, threatened to stop its expansion in the city and hundreds of other businesses wrote in to protest the move. Amazon said it was disappointed by the decision to impose the new tax. The company said it would resume planning for its new building in Seattle’s downtown, but it remains ‘very apprehensive about the future created by the council’s hostile approach and rhetoric toward larger businesses, which forces us to question our growth here.'”

Read more in the full article here.

MacDailyNews Take: Opportunities for less penal locales abound.

Of course, Apple’s now pretty much stuck in Cupertino with a $5 billion anchor with perfect door handles, so they’re a sitting duck for whatever confiscatory idiocy local politicians concoct.

Moral of the story: Lease your office space, don’t own it, to always keep the threat of moving in your back pocket.

SEE ALSO:
Apple could get hit with employer tax in Cupertino – May 21, 2018
Amazon suspends construction in Seattle while the city considers a new per-employee tax – May 2, 2018
Apple again expands downtown Seattle engineering center – April 17, 2018
Apple rumored to be taking big piece of Seattle-area office market in expansion – August 12, 2016
Apple buys machine-learning startup Turi for $200 million – August 6, 2016
Apple quietly buys Seattle firm to expand cloud offerings – November 4, 2014

17 Comments

  1. Apple and others can afford it. If they can pay dividends and do buy backs in the quantity they are, they can pay this rather modest tax. One adjustment I would make, however, is a company should be able to deduct from its tax bill an amount equivalent to what it locally donates (within certain critical local needs). That way companies can have direct control as to where their money goes.

    1. Of course, Google and Apple can afford it, but this is a tax on any large employer, the ones that can afford it, as well as the ones that may not. Not every large employer is hugely profitable. Look at Sears. They’re a big employer, and they’re going out of business in the next year or two.

    2. The amount of taxes being paid by those businesses and their employees is already massive. This is just another money grab. They say it is for transportation and the homeless, but they won’t actually earmark it. Oh please, it’s just robbery. Google, Apple and the others should build their own housing and transportation.

      1. Bwahahahahaha!!! Ahah ahaha ha! Yeah truly massive amount. It’s criminal! If only there was some legal way to give those companies a break on their taxes… like… I don’t know something like the largest tax break ever passed?

        I was in favor of the tax break and even I could see this coming from a mile away. It’s a ready made talking point for any liberal state/city that wants to raise taxes on huge companies.

        There are some rational arguments to be made, but “they’re already paying a huge amount in taxes” is no longer one of them 🙂

  2. Yep. When Apple made their big commitment to Cupertino, the left-wing city council acted so anxious to have them. Now we see why. Apple did everything it could to be a good neighbor, including going almost 100% green and spending millions for community improvements. However, now that Apple has this huge, non-moveable investment, the liberals will start imposing special taxes on Apple. There will be no end to it. That’s the way liberalism/socialism is. In the final analysis, to save itself and maintain autonomy, Apply will have to write off the huge investment and move to a red state. Sad, but true. How does “Designed by Apple in Texas” sound?

  3. The high-tech industries have driven massive inflation, particularly in housing. Median rents exceed $3000/month. Median home prices are passing $2.3 million. Housing costs continue rising at 10-15% per year.

    The high-tech cities are having to address massive increases in homelessness and related social costs. They are facing the need to pay city employees more so they can afford housing themselves. All of that requires more revenue than the cities can raise with current taxes.

    So, what to do? Tax the local residents who are already struggling with inflation in everything but median family income, and who can vote in local elections? Or tax the corporations that created the problem, and that can pass the costs through to a broad international base?

    If you were on the Seattle, Cupertino, or Mountain View City Council, what would you do?

  4. It’s funny how when a company is considering a destination to build their large company….cities go out of their way to offer money or other benefits to locate their company there so as to offer employment to their local people. Then later Tax them for being so large….WTF????

  5. If the wealthy such as Apple refuse to pay for the very infrastructure they use to make their businesses more viable, then the gov. must step in to impose a reasonable corporate use fee. This is to reduce Socialist misuse of needed social services such as highway and street maintenance, street lights, suer pipes, trash pick up, urban amenities, parks, tree trimming, affordable housing, etc.

    1. But Amazon is the big over-user of infrastructure who absolutely does not want to give back to the commons. Wallmart too where 20% or so are slaves and so have to go on food stamps.

  6. …that will tax the biggest companies in the city $275 per employee

    Per year I assume.

    I’ll stay out of the fray on this one as I have no local data for analysis. But I’ll point out that it always requires communication, interaction and balancing between business and their locale in order for sanity to prevail. When one or the other goes mental and refuses to consider the other’s perspective, that’s when literal hell occurs.

    It reminds me of the required balance between producers and marketing, between the rich and poor, between the employer and the employee. BEWARE factors the wreck the balance as the resulting catastrophe will hurt everyone. That’s history 101 stuff. That’s what the 2007-2008 ‘Great’ Recession as entirely about.

    What you do to others, you do to YOURSELF. So simple. And apparently, so hard to learn, despite millennia of training. (Golden rule etc.) We foolish humans. <-Today's trending theme!

    1. Repair: BEWARE factors THAT wreck the balance…

      Will there ever be a decent grammar checker? Not so far! Sorry Grammarian. How about that as an AI goal? Or I need a robot that cattle prods me if I attempt to post anything without editing it first. ⚡⚡⚡🤖

    2. And, of course – to bring the topic back to Apple – how can an aspirant to an Apple gadget afford it with Amazon’s low wages in the first place. Ford solved this fake conundrum by giving employees high wages to they could actually buy its products.

      1. Great point! Are the custodial staff etc. supposed to live underground? Echoes of the brilliant film ‘Metropolis’, which addressed this human balance problem head on.

        Here’s the full version of ‘Metropolis’ with the very best of music scores, which happens to be modern:

  7. “Last week, the Seattle City Council passed a measure that will tax the biggest companies in the city $275 per employee,” Malas reports. “The council scaled back a higher proposed per-employee tax after Amazon.com Inc., Seattle’s biggest employer, threatened to stop its expansion in the city and hundreds of other businesses wrote in to protest the move. Amazon said it was disappointed by the decision to impose the new tax.”

    A bit of a correction to this; the original proposal passed without enough votes to override the immediate veto promised by the new (gay female) Mayor, which is why the (majority female) Council scrambled very very quickly to come up with the “scaled back” version which passed unanimously. The Council is made up of left / far-left / ultra-super-far-left members. This issue is about 100% certain to become a city ballot Initiative for this November; Seattle liberals are somewhat split on the issue and anything could happen.

    Extra note: new Census data has just declared Seattle the fastest-growing U.S. city in the past decade, which has put TREMENDOUS strain on housing costs, homeless population, traffic, skyrocketing taxes, etc etc. Everyone is feeling this seriously big-time, and its pretty much all anyone talks about.

  8. I guess if the council is made of left /far left /ultra far left, then that’s what the people of these Seattle wanted?
    Maybe the complainers are just a very small loud minority?
    As opposed to the quiet majority who votes the Council in?
    Or am I missing something?

    1. What you are missing is that these businesses are the lifeblood of the city. Now they are all upset and they are not glued to this city like apple is glued with their massive campus to cupertino. If amazon pulled out of seattle or say Starbucks besides the thousands of jobs which would be lost the decrease in revenue would bankrupt the city. So its a balance and while the silent majority may agree with the council they . are not the ones paying the dollars so either it will workout and the businesses will stay or they are digging their own grave

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