Cupertino’s flirtation with an employer tax on Apple dies a quick, unanimous death

“Cupertino’s brief second flirtation with putting an Apple Inc.-targeted business tax on the November ballot to pay for transportation improvements died a quick and unanimous death Tuesday night,” Jody Meacham reports for Silicon Valley Business Journal.

“‘We are talking to hyperloop to have a line, hopefully, along Stevens Creek from Diridon Station to DeAnza College,’ Councilmember Barry Chang blurted out just before the postponement vote,” Meacham reports. “Mayor Darcy Paul said in an interview afterward with the Silicon Valley Business Journal that Chang’s hyperloop revelation surprised him. It came immediately after a cryptic comment of his own intended to hint at the secret without revealing it.”

“Business organization leaders as well Cupertino residents lined up during the public hearing to talk about the danger to the city’s economy if it raised taxes on the company that employs two-thirds of the city’s workforce,” Meacham reports. “‘Our region’s largest employers have choices where they can locate or relocate their employees,’ said Matt Mahood, president of the Silicon Valley Organization, the region’s largest chamber of commerce.”

Read more in the full article here.

MacDailyNews Take: Common sense prevails, regardless of hyperloop dreams.

Apple takes issue with Cupertino’s proposed employer tax grab – July 31, 2018
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


      1. What a cynical view of the democratic republic. We have a government of, by, and for the people. Taxes do not represent some insidious outside entity taking our money and hoarding it in a cave. Rather it is us, we the people, investing in ourselves. We decide to do this indirectly, through our representational democracy’s elected leaders.

        When you describe our own expenses for maintaining the commons and providing our common welfare as “some people extracting money from others” it demonstrates that you aren’t fond of our form of government.

        If you think Libertarianism is going to help, just remember that a free market always finds equilibrium at the profit-maximizing price point. That necessarily means that it is a price that some cannot afford. For essentials like water, that is a death sentence for the poor. Count me out; my parents taught me better civic duty than to get behind Libertarianism’s “screw you this is mine” economy.

    1. On the other hand, new taxes are certain when enough people in a community die because there aren’t enough police, fire trucks, or ambulances. We will have to see how long the voters in Cupertino will tolerate a government that does not have the resources to address their plummeting quality of life due to absurd housing prices. The employer tax may have been the wrong answer, but Cupertino, Seattle, Mountain View, and similar communities will need to find some other answer before the spiral terminates in a crash.

  1. Would be interesting to see what Cupertino gets from their partnership with Apple, besides bragging rights that Apple is headquartered there.

    So many cities provide freebies to prospective companies or sports teams, it would not be a surprise if Apple pays nothing.

    1. If you have been following the story, it appears that Apple contributes quite a lot in direct aid to local services, in addition to having a payroll that is over three times the wages paid by every other employer in town put together.

        1. Yes and No, applecynic.

          On the one hand: The company itself uses remarkably few local government services. They have their own teams for security, fire suppression, health care, transportation, utility maintenance, and so forth. That is true everywhere: Industrial-scale taxpayers generally pay far more in local taxes (even after rebates) than they consume in service costs.

          On the other hand: Apple employees consume more services than they pay for in taxes. That is true everywhere: residential properties and individual residents invariably represent a financial burden on local governments, which are sustained by commercial taxpayers that close the shortfall. That is particularly true in Silicon Valley: the explosive rise in high-tech employment has generated concurrent—and very expensive—crises in traffic, affordable housing (and costs associated with homelessness), general inflation, and so forth.

          Exacerbating the problem is that a lot of the Apple employees who are generating these burdens on local government do not live in the Cupertino city limits and pay no taxes for the city services (roads, public safety, public health, parks, etc.) that they consume. The old and new Apple campuses are so self-contained that they do not even generate much sales tax. Since there is no way for the city to tax the commuting employees for the services they consume, it is hardly surprising that the city considered taxing their employers.

          But wait, there’s more: As quality-of-life issues like traffic and housing costs drive more residents out of the community, the ratio of commuters to taxpayers is constantly rising, and so is the tax burden on the remaining residents… until they leave, too. It is not a sustainable feedback loop.

      1. Have not followed the story, have not followed Cupertino finances. No opinion on the matter.

        However, Oakland went into debt so they could bring back the Raiders from Los Angeles. They will be paying that off for years to come.

    2. Apple isn’t getting a freebie from Cupertino, but the negative impacts that the Apple campus has on Cupertino are quite significant.

      Whether the city council looked the other way because they were so enamored with Jobs/Apple or whether some of the consequences were simply unforeseen is debatable, but things are pretty bad.

      Worse, is that the Apple campus has a had a huge negative impact on areas surrounding Cupertino (I live in one) where no revenue or direct benefits are received.

      If you haven’t been to the area, it’s really fascinating to see how much they’ve taken over. It’s a lot like Disneyland where whole roads become part of the company. There’s a never ending stream of large buses going into and out of Apple lots.

      Businesses that once did well in the area are now suffering because where there were once residents and small businesses, there is only a large campus with employees never venturing off campus to support local businesses.

      Other venues (restaurants, bars, theaters) get swamped out from time to time when huge teams come by unexpectedly after work in the greater area (for a short one time gain, only to push away regular local patrons).

      It’s a total mess that should’ve been better planned with a mix of housing and retail to support the numerous amounts of people being brought in.

      Apple is not alone here. Google has taken over nearby Mountain View, and nearby Facebook has more employees than the city of Menlo Park that it occupies.

      The core infrastructure of the area was never designed for this, and it shows. If these (and other companies) want to stay in the area at the levels they’re at (or higher), it would be in everyone’s best interest (including their own) to find ways of updating the infrastructure to accommodate the radically huge impact these numbers of workers are having on the greater area.

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