Travis County Gives Final Approval to Tax Incentives for Apple Expansion in Austin

[cjbryce]

Really? Apple are doing the local area a favour by creating jobs? No, Apple are creating jobs because of a business need, not good will.

Not quite - of course Apple require the resource, but they could spend their money pretty much anywhere and have chosen Travis County for economic reasons (i.e. tax breaks, local labour availability, local education standards &etc) not for altruistic reasons. Any area Apple, or any other company for that matter, chooses receives the benefit. I'm sure the people of Travis County will be grateful for the jobs and the boost to the local economy and I'm sure the local government is pleased that they'll be getting more tax revenue than the zip they'd have got if Apple had simply gone elsewhere.

Here in the UK, SOP has been to ship jobs like this to India - the locals there were very grateful, the unemployed here weren't so pleased and UK plc lost all tax revenue (not just theoretical reduced revenue after granting tax breaks). Mind you, things got so bad that jobs are now being shipped back to the UK and some companies are making a virtue of advertising that their call centres are onshore here in the UK.

 

[lilo777]

Now that's the craziest thing I've read on this thread. (So far...)

Why? Is States working together (through the Federal government) really such a crazy thing? Perhaps they should not have created a Federal state then in a first place? That might have been fun. Perhaps we would see Tennessee now competing with Uganda on the World markets offering Apple incentives for creation of $0.30 per our jobs!

 

[Swift]

Just a note

The Austin American-Statesman has to be the worst newspaper in a reasonably large town I've ever seen.

 

[BaldiMac]

Apparently you totally misunderstood what Apple is actually doing. 24% might be the tax rate for Apple Corporation. The problem is that most of Apple profits legally go to its subsidiaries not the Apple Inc registered in California. Yes, they paid 24% on 10% of their profits and 5% on the rest of them. Where could I get such a sweet deal?

I am not surprised about so much confusion. Life proves again and again that most Apple fans are not that bright. Otherwise they would not buy overpriced under-performing Apple products in a first place.

You just made all of that up. Read the financial statements. It's all there in black and white.

Again, the NYT's reported tax rate was based on comparing quarterly estimates based on 2010 income to 2011 income. That number has no relation at all to the total taxes paid on 2011 income.

 

[lilo777]

I know you've been asked this before, but I haven't seen a response so I'll ask again. Why are you here? You have so much contempt for Apple AND for anyone that disagrees with you. Insulting people because they disagree with you, whether over politics or their choice of car, clothing, computer, etc. is juvenile. Discussion is one thing. Blatant, blanket insults to an entire group of people is another, and shows your biased, narrow-minded way of thinking.

Let me ask you this. Why should not I be here? Is this a site for Apple lovers or something? What's the rational for your question?

I do not insult people because they disagree with me. Perhaps I might be critical sometimes of people who disagree with facts.

 

[Swift]

And on Topic

It's disappointing to see Apple play the same game as all other corporations are playing these days. Anything to get out of taxes; and if you're the richest company in the world, aside from the cool stuff, they've been rapacious in making states race to the bottom as much as anyone.

It's not realistic to think that one corporation is going to compete by paying more taxes than anybody else, but it's disappointing. Apple becomes a company like any other. And from the business perspective, yes, they are.

Corporations aren't constructed to give money away.

 

[lilo777]

You just made all of that up. Read the financial statements. It's all there in black and white.

Again, the NYT's reported tax rate was based on comparing quarterly estimates based on 2010 income to 2011 income. That number has no relation at all to the total taxes paid on 2011 income.

Could you provide me with a link to financial statements for all Apple subsidiaries?

 

[Avatar74]

11 bucks an hour. People at In n Out flipping burgers start at 10.

Yes but burger flippers are more skilled and customer oriented than your typical IT jackass whose primary skill consists of pushing updates that completely screw up your desktop workstation and destroy item setup in the order management system... Which then requires my relentless investigative skills to go fix and, basically, do half of IT's job for them ... replacing five years and millions of dollars of work with something I built in a weekend.

But I'm not bitter. I just want the portion of IT contractors wages that corresponds to how much of their job I'm doing for them.

 

[Rocketman]

Ok. This is just too much to take. I can't believe this. Apple is leaching off tax payers? Boy have you drank the koolaide. Its the GOVERNMENT that leaches off of the tax payers. Moreover, the government leaches off of Apple. Where do you think government gets its money, honey?

How do people get this twisted around in their heads?

MSNBC. Sadly we all know what MS is.

 

[blacktape242]

So, Apple continues screwing the taxpayers/counties/states etc. Good for Apple. Bad for everyone else. I guess 9.8% tax rate was too high for Apple.

oh shut up! they are proving jobs and expanding at a HUGE rate in a horrible economy, don't hate just cause they make money. if you want to be mad at anyone blame the government! Apple isn't doing ANYTHING WRONG.

people like you make me sick....just go to your stupid OWS protests....

 

[Rocketman]

Could you provide me with a link to financial statements for all Apple subsidiaries?

You also called Forbes a "liar" when you simply disagree with his proposed policies, he as a private citizen, is perfectly free to express. I would gainsay and call you what you called him, and be correct, but instead I will say you are intellectually lazy, incorrect, and on the wrong side of the debate as far as benefits to real people are concerned, especially the poor and middle class.

Rocketman

 

[Hirakata]

Perhaps they should not have created a Federal state then in a first place? That might have been fun. Perhaps we would see Tennessee now competing with Uganda on the World markets offering Apple incentives for creation of $0.30 per our jobs!

What are you talking about??

 

[BaldiMac]

Could you provide me with a link to financial statements for all Apple subsidiaries?

I don't have a link to to things that only exist in your mind. Apple corporate reported the 34.2 billion in income that the NYT source used in their calculations. Apple corporate reported a tax rate of 24.2% for FY2011. Are you saying that Apple subsidiaries paid negative taxes in order to reduce that tax rate?

 

[Swift]

People, companies, and governments are free to exercise their politics where they have the influence. Apple wants to minimize taxes paid. Texas wants to "do whatever is on their political agenda" and maximize tax revenues collected. Texas was free to wheel and deal with Apple, trading back and forth among these related desires until they closed the deal. If the fine people at Apple do something "wrong," they'll see the backlash from shareholders and customers. If the fine people in Texas did something wrong (failed to meet their constituents' political demands), they'll feel it at the polls.

Goals --> tactics --> decisions --> consequence.

Both sides get to play by these simple rules. Both sides did. I bet both sides feel they achieved Win-Win.

/rant

Consider reading Rand's "Atlas Shrugged." It's really long, so maybe just the Cliff's Notes?

Please. Ayn Rand is a sociopathic ideologist, as dogmatic and idiotic as the Soviet Communists in her own way. And Atlas Shrugged is a phony-as-a-three-dollar-bill bodice-ripper about a world that doesn't exist and never will. How can you tell? Because the people in it are cardboard cutouts. Capitalist Realism, just like Stalin.

But I agreed with a certain amount of your rant.

The enemy is herd thinking, that is, any superficial idea that 'everyone says.' And that, my friend, is on the right as well as the left.

 

[Nostromo]

With underbidding on taxes state governments ruin their own tax base. Very silly behavior.

 

[Hirakata]

the enemy is herd thinking, that is, any superficial idea that 'everyone says.' and that, my friend, is on the right as well as the left.

+1

 

[Stella]

Sure, Apple is creating jobs out of a business need. But they can create those jobs anywhere they want. They don't HAVE to create them in Texas. Many other states would be happy to have the jobs within their borders. If Texas didn't give them what they wanted, they'd go somewhere else. Whether or not you like it, this is the way businesses run. It's not Apple's fault; their job as a corporation is to earn money. That involves doing everything they legally can to spend less and earn more. Every other big corporation does it, too. Blame it on the laws on this country, not on the companies that are following them.

yea.. i know this.. however, it doesn't make it 'right', depending on your view point.

When local governments are sliding towards bankruptcy... they have better things to spend their tax money on.. rather than "giving away" the money to companies that can afford to forgo the incentives.

Ultimately, how fast is the government going to recoup that $35 million tax incentive due to the new jobs and thus the money flowing through the economy / extra tax receipts?

BTW - in my original post, I said this applies to other companies, not just apple.

 

[AppleDroid]

You are simply wrong. The Forbes flat tax plan and even the Ryan budget already passed in the house, reduces marginal rates but substantially reduces deductions. That increases the net cash payments of the very richest (top 20% not merely top 1%), and provides more net revenue to the government which is mandated to be applied to deficits and debt, not new spending.

The political debate is (D) higher taxes on the rich AND more debt and deficits, vs. (R) higher taxes on the rich with lower marginal rates to spur growth AND less debt and deficits.

The advantage to less debt and deficits is less money flowing to government bonds and more flowing to commercial bonds which is the exact source of employment and growth and wage increases. It really is that simple!

It is this exact cause that we are seeing lower wages, employment, and growth. The government sucking all the cash out of the bond market. A really big and hurtful sucking sound to real people. Side effect? Currency debasement and zero or less rate of return on savings. High gas and grocery prices.

This is real stuff.

Rocketman

Corporations are the best!

 

[stevedun]

Business as usual. Apple has done nothing wrong by pursuing the most hospitable site for a new office. If the rules allow for negotiating tax breaks (i.e., the cost of doing business somewhere), then why WOULDN'T they do it?

The city benefits from tax revenue and lower unemployment, plus the prospect of people moving in for work, paying additional taxes on other items. The residents benefit from more available jobs and perhaps an opportunity to move up in the most successful company in the world. Local businesses benefit from more people with money in their pockets, spending more of it in their shops. Apple benefits from a discounted tax rate, lowering their total cost of business for this particular office. They all win.

The only loss here is for the Apple PR department. We know this is how the country is run - but we don't want to be constantly reminded. The term "tax break", when associated with a company profiting billions each quarter, is a hot issue. It pisses people off.

Can I negotiate my tax rate? No. Can I do as much to contribute to the country this year as Apple can? ... Didn't think so. Deal with it or vote to change it.

And finally, since I usually just lurk on this forum, I take a moment to reply to one of my fellow posters:

I am not surprised about so much confusion. Life proves again and again that most Apple fans are not that bright. Otherwise they would not buy overpriced under-performing Apple products in a first place.

I've never bought an overpriced Apple product (other than those annoying miniDisplayPort adaptors). I've never bought an under-performing Apple product. I have bought expensive Apple products. I have bought Apple products designed for stability rather than watch-me-melt-myself benchmark stats. And yeah, I've built my own PCs for performance, and they worked quite well, but I've never built an Apple. As an Apple "Fanboy" of 20+ years, I'm bright enough to know that most people pay for experience they have with a product... not the under-the-hood specs. If you have the time and expertise to build/modify/maintain a PC, then good for you! Most people want something that just works.

 

[sweetbrat]

Let me ask you this. Why should not I be here? Is this a site for Apple lovers or something? What's the rational for your question?

I do not insult people because they disagree with me. Perhaps I might be critical sometimes of people who disagree with facts.

OK, I'll feed the troll. The rationale for my question is this...you come here to get a rise out of people, that's become pretty obvious. If that's how you choose to spend your time, that's your choice. But don't play dumb about the purpose of this website. Considering that it's a website dedicated to discussing Apple, it's pretty obvious that most of the people here would have a generally favorable opinion towards Apple and their products. If you choose to spend all your time arguing, so be it. Just seems like there might be more productive uses for your time.

Insulting people and making assumptions about their intelligence based on their like or dislike of a particular product is juvenile. If someone chooses to pay more for organic produce, because in their belief they're getting a superior product for whatever reason, it doesn't mean they're stupid. It means they see value in it that some others don't. People pay higher prices for cars, clothes, etc. because they like a certain manufacturer, prefer a certain style, or a they believe that something fits their needs better than a competing product. A computer is no different.

Making generalizations about the intelligence of any large group of people only shows off your narrow-mindedness. You say we can't think for ourselves because of our blind devotion to Apple; I say you can't think for yourself because of your blind hatred. What's the difference?

 

[JHankwitz]

So, Apple continues screwing the taxpayers/counties/states etc. Good for Apple. Bad for everyone else. I guess 9.8% tax rate was too high for Apple.

Businesses employee people and people pay taxes. When companies get taxed, is minimizes the number of people they can afford to employ and pay.

We have high unemployment, so the last thing government should be doing is preventing companies from hiring more people that will pay far more taxes than the company would have paid in the first place. This is Basic Economics 101.

When government raises corporate taxes, companies move their businesses to environments with less taxes (any/every country other than the USA) so they can afford to hire and pay people to do the work, who then, unfortunately, pay taxes to the foreign country. Our tax system is killing jobs and driving companies, or at least production, out of the country.

 

[lilo777]

I don't have a link to to things that only exist in your mind. Apple corporate reported the 34.2 billion in income that the NYT source used in their calculations. Apple corporate reported a tax rate of 24.2% for FY2011. Are you saying that Apple subsidiaries paid negative taxes in order to reduce that tax rate?

Are you sure that the tax rate is the same as what they actually paid? And rate for which fraction of their profits? It's impossible to say what the two numbers actually mean without more details and some of those details were provided by Apple and showed 9.8% rate.

----------

Businesses employee people and people pay taxes. When companies get taxed, is minimizes the number of people they can afford to employ and pay.

We have high unemployment, so the last thing government should be doing is preventing companies from hiring more people that will pay far more taxes than the company would have paid in the first place. This is Basic Economics 101.

When government raises corporate taxes, companies move their businesses to environments with less taxes (any/every country other than the USA) so they can afford to hire and pay people to do the work, who then, unfortunately, pay taxes to the foreign country. Our tax system is killing jobs and driving companies, or at least production, out of the country.

Oh stop with these republican talking points. If it was that simple we would have great economy every time we elect republican president. In the last 60 years in mot cases the opposite happened. Those Bush tax cuts did wonders for our economy.

 

[Supersonic]

Apple shouldn't require tax incentives.. they have enough money without leaching off tax payers.

BTW - it isn't being anti apple, its being realistic.. they have more money than god at the moment. They don't need incentives, just use their own hoard of money.

Average pay of $35,000? Low paying jobs.. sure it'll help the local economy. But ultimately, its like Apple ( or any other company ) have the attitude that they are doing the local area a favour by creating new jobs.

Was going to write the same myself.

Laughably wrong. Capitalism gone beserk that the taxpayer should even contemplate, let alone actually welcome subsidising wages at the planets largest multinational.

Only in America....

 

[3282868]

including language requiring Apple to pay the lowest-salaried 10% of its new employees at the site an average of $35,000 per year. Contractors, which may comprise up to 25% of the new hires, will be paid a minimum of $11 per hour.

“1,800 yuan is about $285, meaning around $10 a day, or less than a dollar per hour. For reference, a six-piece Chicken McNugget costs $1.20 in China. Good for Foxconn (!/?)”

source: Apple Manufacturer FoxConn Hikes Employees' Wages - Forbes

Foxconn Wages - $1/hour Annual: $285
Apple Travis County Wages:
10% of new hires - Annual: $35,000
25% of new hires - $11/hour min


Average Annual Wages:

U.S.:
The national average wage index for 2010 is $41,673.83. The index is 2.36 percent higher than the index for 2009.
source: National Average Wage Index

Average Annual Wage 2010: $41,673.83 = $261,644.97 Yuan

China:

In early 2011, official statistics indicated that the annual per capita income of urban households had increased to 17,175 yuan, while rural household income had increased to just 5,153 yuan.

Average Annual Wage Urban: 17,175 Yuan = $2,727.91 USD
Average Annual Wage Rural: 5,153 Yuan = $818.45 USD

Average Costs of Living:

U.S.:
National: $72,000 USD

China (due to large discrepancies between Urban and Rural China, both statistics are necessary):
Urban: 752167.56 Yuan = $120,000.00 USD
Rural: 30086.70 Yuan = $4,800.00 USD


Food for thought.

----------

It's great to know that you all make a nice comfortable living. In case you haven't noticed, not everyone is in the same boat. When people have been out of work for one or two years, those $11 per hour jobs don't look quite so pathetic. Be realistic...there's a lot of people in this country that are unemployed.

And that is a sad state on our U.S. economy, when the cost of living has skyrocketed and the average annual salary barely increases, leading American's to beg for part-time work at their local Wal-mart (if they're lucky).

Trickle down economics, yeah, that worked.

EDIT: Um, these are supported statistics and facts with sources, no opinion by me. I don't know why some are voting it down. Very odd.

 

[BaldiMac]

Are you sure that the tax rate is the same as what they actually paid? And rate for which fraction of their profits? It's impossible to say what the two numbers actually mean without more details

What? "Impossible to say what the two numbers actually mean?" Tax rate is the percentage of income paid in taxes. Income. Not profits. If Apple had $34.2 billion in income and paid 24.2% in taxes, their tax bill was $8.28 billion. This isn't rocket science.

and some of those details were provided by Apple and showed 9.8% rate.

Again, the Forbes article explained this issue very clearly. The $3.3 billion in taxes used in the calculation were based on quarterly estimates. Quarterly estimates in 2011 are based on 2010 income. These numbers are completely unrelated to Apple's 2011 tax bill.