Apple takes issue with Cupertino’s proposed employer tax grab

“Apple is not too pleased with a new employer tax proposal, according to a new report,” Don Reisinger reports for Fortune.

“The tech giant reportedly wrote a letter to the Cupertino, Calif. City Council on Monday detailing the ways it helps the local community through its investments, according to SFGate,” Reisinger reports. “The letter, which was written by Apple Vice President Kristina Raspe, discussed the company’s sidewalk and crosswalk improvements, among other contributions, according to the report. Apple also said that it would work with the city to continue its investments aimed at reducing congestion.”

“If it passes, big companies, including Apple, would be forced to pay $425 per employee in Cupertino,” Reisinger reports. “The tax, which is limited to companies with 5,000 or more employees, could be an expensive proposition for Apple, which has 13,000 employees at its Apple Park headquarters, alone.”

Read more in the full article here.

MacDailyNews Take: Leave it to Cupertino City Councilman Barry Chang et al. to once again attempt to milk the golden goose.

Although they have a long history of doing so, Cupertino really should stop electing the mentally challenged.

Unfortunately, Apple’s now a sitting duck… er, goose for such obscene money grabs. After all, it’s not like they’re going to abandon their brand new $5+ billion glass doughnut, The Colossal Distraction, with its so-perfect-there-was-no-time-left-for-core-products door handles. Shortsighted Cupertino City Councilpeople could enact and ratchet up taxes on Apple ad infinitum if they so desire – and, obviously, they desire. Very much so. Other people’s money. To waste. As usual.

Should their latest tax grab attempt pass, we’re sure the Cupertino City Council will spend every cent on “reducing congestion.” (dripping sarcasm)

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

Apple and Apple employees already pay beaucoup taxes on everything from sales to income tax and they support every business in Cupertino from furniture and restaurants to real estate sales and contractors.

Years ago, Steve Jobs educated a Cupertino City Councilperson on taxes:

SEE ALSO:
Apple could get hit with employer tax in Cupertino – May 21, 2018
Cupertino Barry Chang mayor: Apple ‘abuses us’ by not paying taxes – May 5, 2016
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

[Thanks to MacDailyNews Readers “Fred Mertz” and “TJ” for the heads up.]

23 Comments

  1. I expect that most of the leadership at Apple, as well as Starbucks and Amazon (which had a similar situation in Seattle), are hard charging progressives (Bernie/Ocasio-Cortez types) and they think the feds should milk the wealthy as much as possible. However, when it’s their money, that is different…and they screen bloody murder (which is what Starbucks and Amazon did).

      1. Venezuela is collapsing because of American interference through sanctions and political destabilization.

        You know this of course, but you will act like a devil and continue to push your nonsense.

        Lets talk about countries where these policies are working and where the US is NOT sanctioning and destabilizing…..Sweden, Norway, Denmark, Iceland…

        1. Leftists are always quick with excuses for the failures of their ideology and – Surprise!, Surprise! – it’s always someone else’s fault. Sorry, folks aren’t buying that shit any longer.

      2. That “quote” was originally from an editorial in the Valley News (of Lebanon NH) Editorial Board, not from Bernie Sanders, although he did post the editorial on his senate web page. And the editorial was actually about closing the jobs gap, the investment gap, the wealth gap, and the race gap, not praising Venezuela’s socialist policies.

        For any MDN readers who would like to read the original editorial, you can find it here…
        https://www.sanders.senate.gov/newsroom/must-read/close-the-gaps-disparities-that-threaten-america

        1. If Sanders posted that on his Senate web page, he obviously endorses the content. That content would be a reference to the supposed benefits of Venezuela’s leftist policies. The policies that have left Venezuela beleaguered, like leftism always does. Wonder what the body count will be this time? 500,000? 5,000,000? I mean, how many dogs and cats can they eat, before they eat each other? Step right up and spin the wheel!

  2. Liberals never met a tax they didn’t like or couldn’t invent. These are Timmy’s people turning on him, AFTER they built a huge complex.

    They have yet to learn that business will not stay or come to high tax places they invent.

    1. To reiterate a point I make below: Companies will also not stay or come to places without adequate services. In most cases, the level of services is set by the state legislature and the city is not free to reduce them. The state also sets limits on how much a city can raise from sales and property taxes, and prohibits local income taxes in most cases.

      Those services do not come out of thin air. They are provided by city employees and those employees must be paid a living wage or they will move to the private sector. The median rent for an apartment in Cupertino is $3157/month. Lender guidelines say that a family should spend no more than 28% of its gross income on housing. So you cannot afford an average apartment in Cupertino unless you make $11,275/month. If you cannot afford to live there, you cannot afford to work for the city. If nobody works for the city, it cannot provide the state-mandated services. Hence, high taxes.

  3. I disagree with part of the MDN take. That Apple is somehow stuck. They are not. They can sell that building for pennies on the dollar, write it off to get back a third it’s value the following year, and build/lease a new building elsewhere.

    They should threaten EXACTLY that.

    Amazon threatened EXACTLY that and got “second rate SF wannabe” Seattle to snap back to reality and remove the foolish money grab.

    If you’re not willing to use the stick and only give away carrots, people will play you that way. It’s time Apple showed some stick.

    Agree with the rest of the sentiment in the MDN take. Well put.

  4. $425 x 13,000 = $5.525 Million. That would get lost in the round-off error. I agree the tax should be borne by a wider set of companies but give me a break!!

    1. Yea of course that newly created from thin air tax will never increase

      That’s how every slippery tax slope was created. The first US income tax was only 3%.

    2. I would be interested in hearing how readers here think Cupertino (and cities like it) should handle its budget issues.

      The basic problem is that high wages at the Silicon Valley firms have driven housing costs through the ceiling, which means that the cities need to pay their employees enough to afford a $3000/month apartment. They can’t cut the number of employees because increased homelessness requires increased services like police and jails.

      The cost to maintain critical infrastructure can only rise as it ages and demand increases. Most “social safety net” services are mandated by the Legislature and cannot be reduced by the cities. There may be possible savings from increased efficiency, but that’s just a drop in the bucket.

      On the revenue side, these cities don’t have an income tax and are at or near the statutory maximum rates for sales and property taxes (and raising property taxes would just feed the housing cost spiral).

      So what are the cities to do?

      1. I really don’t care if they raise the taxes on Apple. Actually, I wish they would, to the point that they force Apple to move (essentially doing to them what happened with manufacturing and textiles many years ago – although this is now being fixed by 45). My point is that Apple (as well as Starbucks and Amazon) scream about being taxed to help the poor (or whoever), even though they call themselves progressives, and they can certainly afford the proposed tax on their respective companies. It makes them look like hypocrites – much like when T. Cook complained about wedding cakes but was still willing to do business with those pesky middle eastern countries.

      2. Cities managers can spell out the need for infrastructure and other spending, and make their case to the citizens and businesses of that city to vote Yes on new taxes. Maybe the tax plan includes higher corp taxation. But taxing a company for employing people is height of short-sitedness.

        1. To repeat my question above: since California state law mandates a minimum level of city services and a maximum level of taxes, what is a city to do when the revenue no longer sustains the cost of services? As for a vote, you do realize that businesses can’t vote? I bet that the residents (who are already hurting from the housing crisis) would vote for a tax plan that protects their services and soaks large corporations to pay for it. However, state law severely limits their ability to do so, and if the vote fails, the problem won’t go away. Cities (like casinos) can file for bankruptcy to restructure their debt, but not to eliminate a shortfall between available revenue and mandatory operating expenses.

          You might suggest that all the workers who cannot afford to live in the city should just commute from someplace cheaper, but that simply shifts the financial burden for providing roads, police protection, etc. from the non-taxpaying commuters who require those services to the remaining taxpaying residents, whose quality of life is plummeting anyway thanks to the housing crisis and its consequences.

          1. I like your points, assuming that they are accurate. And I will assume such if you vouch for them. And I would be willing to get on board with corporations of a certain size and payroll being held to a different tier of taxation. But it would be dependent on knowing none of the revenues were going to be siphoned off by the State, and stayed within the affected cities.

  5. Underfunded cities and counties couldn’t have anything to do with the unfunded pension liabilities that have skyrocketed in the last 20 years up something like 10/1 could they?

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