haha seriously, those companies make products we need
apple makes products we want
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Apple Expressing Frustration as Tax Incentives for Austin Expansion Remain in Limbo
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haha seriously, those companies make products we need
apple makes products we want
Your math is incorrect. That $300 million is construction costs. It does not go to the local government. However the $35-36 million in rebates does come out of the local government, to be covered by the rest of the tax base. That's the correct math.
Living in the area, 3600 jobs doesn't sound like much, but, considering the area is growing in the tech side of the house. you have AMD, IBM, Intel and other tech groups here. If Apple wants to expand their campus here, then let them! It is incentives vs. unemployment. It should be a no brainer. Austin will still make money through sales taxes. Now I am no economist, but if a business that comes into this area and wants to expand here for the price of between 5-7 million dollars per year for 10-15 years after throwing $300 million into the economy I have no problem with it. Never mind the fact if you average the annual salary at about $50k times 3600 employees equals about $180 million per year! Bottom line: Austin and Travis County will make that money up in no time!
Local governments care about local economies on the whole.
You can either find businesses to pay people (like construction workers) or you can figure out how to take care of them in homeless shelters and raise everyone else's taxes to do that.
$300 is coming into the economy, $30 is going out. HOW it comes in and out (salaries vs. taxes) is really not important. If it's going to pay people then that's less people the government has to take care of which means they have less things to pay for next year.
It's all one big mixing bowl.
i wish i could go into the apple store and say i want a macbook air so give it to me because i might then buy stuff from the app store and some ios device.
different rules for different people
you think governments and people can play this bargaining game with companies like apple forever?
nike dosent have slave camps in s-america and asia because the salary demands in the US are too high or does it?
I agree, tax all the greedy corporations at 100%... no breaks for anyone. That would be a great plan. Then all the evil corporations would move out of the US and go somewhere else and we could all work for the government. That would be awesome.
But wait, where would the government then get their money? Oh yeh, the rich... tax them at 100% too.
Seriously, if you don't get why its a good deal for a community to provide incentive for a company to locate there, then I'm not sure what to tell you. Its not "just" 3600 Apple jobs... my guess is that its at least 10,000 jobs when you add in support organizations and other community jobs to serve that 3,600. As someone else said, a tax break is not no tax. Apple and their employees will be paying way more taxes to the county than they would get if Apple wasn't there.
Apple has to take the business risk to spend all the money to build the building, hire the workers, pay the workers, train the workers, etc.. They are going to chose to do that in a community with a government that is friendly to businesses.
How is a tax break to for a business to locate in a community any different from Best Buy having a sale to get you to come in and buy a new iPad??? Incentives help shape behavior.
But you cant give a better deal to Apple or all the other companies will be coming back to get theirs. Apple may be asking for much more than what was given to the other companies in the area.
EVERY large company does this. It's very easy to understand and defend.
Typically, a company will shop around different cities to find the best deal. In exchange for temporary favorable tax treatment, they guarantee to bring a certain number of jobs to the area. Those workers will then buy houses, shop in stores, and pay sales and property tax. When considering the net revenue impact, the city expects to make more money in tax collections from those workers than it loses from tax breaks to the company.
Why should Apple forego those tax breaks that all other large companies enjoy just because it makes a lot of money? If Austin faulters, there are a hundred other cities that will bend over backwards to bring those guaranteed high paying jobs to their areas.
Did anyone read the article? The problem isn't really w/the tax breaks. The problem is with the wording of the contract.
From the article in the OP:
Lethal
From the article in the OP:
Lethal
Do you own an iPhone? If you do, then you are doing the exact same thing. The cellphone company ate most of the cost of the phone because they were going to get the recurring income from you. That is EXACTLY the same thing that the county would do to give a business a tax break to bring a ton of jobs into the economy.
Do you get free apps from the app store, or pay $.99 for apps? Before Apple created the app store the average price of a smartphone app was around $10-30 each. These prices are subsidized because of volume. You take advantage of that and again, its very similar to what is going on here.
Have you never bought something on sale? Do you get a home mortgage tax deduction?
The mindset of many commenters here really tells me a lot about what is going on with our economy. If it continues, the US economy will be killed forever and Travis county, as well as the rest of them in the country can figure out how to feed all the people that don't have jobs.
I'm surprised this is happening in Texas. Here in Michigan, there was an attempt to stop these tax giveaways to corporations that then fail to accomplish what they promise. Things like job creation, etc. It appears to have failed here, so it's odd that the notoriously pro-corporate Texas legislature is acting so concerned... Odd...
2 arguments
you can argue the merit of tax breaks. that one is clearly debatable.
the deal with the travis county tax break is that they want Apple to hire people that are under the poverty line. i don't agree with it. i have no problem with a community that offers tax breaks requiring that Apple hire county residents but to force apple to hire poor people is ridiculous. you have to hire qualified people and if they're qualified, sure but apple shouldn't be forced to seek out poor people just to meet some qualifications.
you can argue the merit of tax breaks. that one is clearly debatable.
the deal with the travis county tax break is that they want Apple to hire people that are under the poverty line. i don't agree with it. i have no problem with a community that offers tax breaks requiring that Apple hire county residents but to force apple to hire poor people is ridiculous. you have to hire qualified people and if they're qualified, sure but apple shouldn't be forced to seek out poor people just to meet some qualifications.
Careful who you call ignorant. Local governments set tax rates to pay for local services, such as police, fire, schools, water, sewer, roads, etc. If they allow some taxpayers to pay less than their share, then by definition, the rest of the locality's taxpayers have to make up the difference. The argument that the jobs created offset the shortfall is null, since computing their tax value is speculative, at best, and as far as I can tell, nobody even tries to make this calculation. It's a subsidy, plain and simple. Companies threaten local governments with moving or locating elsewhere, and get a gift of the taxpayer's money.
Corporate welfare
SO, the most profitable company in the world can only expand if they get local tax breaks.....
SO, the most profitable company in the world can only expand if they get local tax breaks.....
No, it is not one big mixing bowl. Not where the provision of government services are concerned. They are paid for out of tax collections. The "economic development" benefits are amorphous, at best. Construction doesn't even have to go to local firms. The jobs can be low-paying and go to people who don't live in the city and county. For certain these inflows don't make up for the tax loss. It's cost-shifting. Companies extort these give-backs out of local governments because they can.
This is exactly what SJ meant when he told Obama that it's too expensive for companies to do business in America. This is why they outsource manufacturing to China and Brazil. They offer the incentives (taxes, land, what have you) that make it worth Apple's while to build/invest there.
You have to give something to get something. You want a big business in your back yard to greatly boost the local economy? Then you have to give them a reason to do so. It's also not just local businesses reaping the benefits, it's the taxes people pay by moving to the area to work there, which boosts property value and hence higher property taxes and more income to the govt. It's foolish to think that Austin is bent over the barrell when they stand to benefit from way more than solely Apple's property taxes and maybe their employees eating around the corner at Applebee's on lunch.
You have to give something to get something. You want a big business in your back yard to greatly boost the local economy? Then you have to give them a reason to do so. It's also not just local businesses reaping the benefits, it's the taxes people pay by moving to the area to work there, which boosts property value and hence higher property taxes and more income to the govt. It's foolish to think that Austin is bent over the barrell when they stand to benefit from way more than solely Apple's property taxes and maybe their employees eating around the corner at Applebee's on lunch.
It's not the hate for Apple. It's a cross between the jealousy and envy of certain successes, be it certain corporations or certain people.
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People who are rich stay rich by not buying the exact same thing for more money. It's moronic to think they should just spend money because they have it, and frankly that's why many Americans are in trouble financially.
Have you heard of the phrase "you have to spend money to make it"? This is what is going on here.
Austin and Travis County have to give a little to get more. They did it with every major corporation that is in the area. Think of it as a prenup agreement that can open the door to more money.
See below. There's a reason Austin is a hot-bed for the IC industry in the US. Sometimes tax breaks are worth the trade of getting high income earners in your state.
Not really. They take more in federal aid than they give in taxes.