Here’s the story, titled “Apple’s Tax Strategy Aims at Low Tax States and Nations.” At least, that’s the title in the story’s URL. On the page, it’s a bit more direct: “How Apple Sidesteps Billions in Taxes.”
There is a hint or two that Apple is pretty smart.
Apple’s headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company’s profits, Apple sidesteps state income taxes on some of those gains.
California’s corporate tax rate is 8.84 percent. Nevada’s? Zero.
The company would be fools to keep its office in high-tax, business-hating California if a small office 200 miles away saves money.
There is no allegation in the story that Apple does anything illegal.But you will find a government hack behaving like a typical government hack.
In one of his last public appearances before his death, Steven P. Jobs, Apple’s chief executive, addressed Cupertino’s City Council last June, seeking approval to build a new headquarters.
Most of the Council was effusive in its praise of the proposal. But one councilwoman, Kris Wang, had questions.
How will residents benefit? she asked. Perhaps Apple could provide free wireless Internet to Cupertino, she suggested, something Google had done in neighboring Mountain View.
“See, I’m a simpleton; I’ve always had this view that we pay taxes, and the city should do those things,” Mr. Jobs replied, according to a video of the meeting. “That’s why we pay taxes. Now, if we can get out of paying taxes, I’ll be glad to put up Wi-Fi.”
He suggested that, if the City Council were unhappy, perhaps Apple could move. The company is Cupertino’s largest taxpayer, with more than $8 million in property taxes assessed by local officials last year.
Ms. Wang dropped her suggestion.
Cupertino, Ms. Wang said in an interview, has real financial problems. “We’re proud to have Apple here,” said Ms. Wang, who has since left the Council. “But how do you get them to feel more connected?”
They’re Apple. They’re far more “connected” that some local government bureaucrat. I don’t even live in Cupertino and I’m writing this post on one Apple product while there’s another Apple product in my pocket. Apple’s connectivity is not the problem. Government busybodies very much are.
The Times’ article end up showing how non-leftist the left’s favorite company really is. Apple is non-union, ruthlessly anti-tax, relentlessly innovative, and has more cash on hand than the US government.
There’s a relationship between all those things.
Disagree with you on this, Bryan. Sure Jobs has a point too, and the story has a point about high California taxes, especially when people want to make them higher yet. OTOH much of Apple’s profit is just arbitrage, not really creativity, maybe half or more of their profit comes from the incredibly innovative (not) move of sending American jobs and dollars to China. Which maybe they have to do because others are doing it, so if Apple just does it better than Apple wins, but that doesn’t really net out to a positive for the rest of us. And, it doesn’t hurt a bit when a corporation acts like a public citizen, above and beyond its taxes. Jobs was just being Jobs, a cheapskate and a jerk. Who knows how many millions of taxes he’s already paying to the city, but on the other hand who knows how many thousands – not many – it would take for Apple to put up a few wi-fi hotspots, along with Apple attribution, free advertising probably worth more than the expense.
That is as may be, but it’s one thing for Apple or Google to simply decide to provide free wi fi in town on their own hook. It’s another thing entirely for some government goon to “suggest” to them they should.
“That’s a nice corporate headquarters you got there, be a shame if something happened to it…”
Josh, I was about to post a long-ish reply detailing for you how it doesn’t matter a whit how Apple generates their legal profits and about how they’re legally obligated to safeguard those profits for their shareholders. I was then going to point out how Jobs refusing to extravagantly spend other peoples’ money didn’t make him a cheapskate, it made him a responsible CEO. But I think that would all be wasted on you so I’ll settle for asking a single question of you:
How much money beyond your legal obligation did you give to the IRS last year? If the answer is -zero-, as I expect it is, then you’re just a self-righteous hypocrite.
What’s interesting in this NYT nonsense is that it leaves out that Apple and others have been lobbying the US government for months to lower cop orate tax rates (sky high in US) so that they can justify to themselves and their stockholders bringing at least a decent amount of their manufacturing home.
– for Californians.
Our libs feel it is a companies public duty to pay double the taxes to be here, suffer thru 2 years of process to get their building permit approved, probably requiring an overpass on the freeway at their expense, all adding 10% to the cost of the product, while their competition built in China is 10% cheaper. Which does the consumer buy.
I’ve bought windows via the local lumber yard vs Home Depot. But the 2nd time the cost was 20% different, so I went HD.
The whole “made in America” thing is rather amusing to me. Why pay more money to keep lawyers and bureaucrats in business? If the Chinese are happy to make things for worthless scraps of paper, that’s fantastic.
Of course, there is poison in the future, but what can you do? Buy American? Why? It’s like giving a blood transfusion to a patient who is covered in leeches. You’re just making the leeches fat.
To me, it’s not very complicated. Apple vs. State of California – which economic model is working better? How much more obvious does it have to be before they get it?