Apple Tax

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I am delighted that Apple is considering expansion in Travis County.  Apple is certainly a star in its industry and is an asset to any community that houses its corporate headquarters.  But, Apple must not be relieved of its tax responsibilities at any level and for any time period just for being Apple and nothing more.

The best ways for county government to attract and support businesses of any size are to keep taxes low, services high and infrastructure well maintained.  Preferential tax treatment of wealthy corporate citizens erodes a county’s ability to do these things.  Therefore, preferential tax treatment should only be entertained where the foregone taxes will “buy” a greater public good that the market isn’t supplying on its own, such as competitively-priced clean energy technology, rehabilitation of a blighted neighborhood or jobs for the economically disadvantaged.

In the negotiation it has been argued that Apple is a star that may locate anywhere it chooses and therefore tax rebates are necessary to incent its expansion in Austin.  While the first part of the argument is true – Apple is certainly a star that may locate anywhere it chooses – the necessity of tax rebates is true only to the extent that similarly situated governments continue to participate in bidding wars that guarantee preferential tax treatment for our largest and least needy corporate constituency.  Even if Phoenix, Arizona, is or was a serious contender for Apple’s expansion plans, a bidding war between Phoenix and Austin serves only to guarantee that Apple will receive preferential tax treatment wherever it locates not because Apple needs it but because Apple commands it.

I am willing to overlook the weakness in the “competitive site” argument if Apple helps the County achieve some public good that the market isn’t supplying on its own.  I have, therefore, suggested to Apple that it:

  1. guarantee that these new jobs will be filled predominantly by Travis County residents;
  2. recruit, train and hire economically disadvantaged residents; and
  3. participate in funding the Lone Star Rail stop servicing its campus.

Apple could significantly contribute to the County’s goal of eliminating poverty through full employment. And, Apple could set the trend for private sector participation in making our regional rail system a reality.  These are valuable public goods justifying a rebate of taxes.

In the last 72 hours I have been encouraged by communications from Apple that it is seriously considering my proposals. I will therefore seriously consider its rebate rather than rejecting it out-of-hand as poor public policy guaranteeing a tax holiday for the wealthiest among us.

What you can do:

  • Attend and testify at public hearings on the proposed rebate.
  • Write or call members of the Commissioners Court with your ideas for appropriate tax abatement and rebate policies.
  • Join the policy debate within other local governmental entities through attending public meetings, writing “Letters to the Editor” and talking to your neighbors and colleagues.

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