6 ms·

Apple incentives are the largest in NC history

58 points by watchdogtimer 5y ago

lsy 5y ago
This would make me extremely uncomfortable as an employee. I expect my state taxes to go to help cover expenses across the state, pay for social programs, emergency expenditures, etc. Knowing that my tax dollars were being kicked back to my employer would make me feel like I wasn’t putting in my fair share. I understand that money is fungible and companies get tax breaks often but the way this is phrased puts a bad taste in my mouth.
- ed25519FUUU 5y ago
  Maybe I'm in the minority but I would feel absolutely fine. Income tax is just one part of the pie. In fact, many states (such as Texas, Washington, and Florida) have no income tax at all, yet they manage. Property taxes will go to fund schools and state governments, not to mention localized sales tax and cash infusion.
  - tjr225 5y ago
    > In fact, many states (such as Texas) have no income tax at all, yet they manage. https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis
    - throwaway0a5e 5y ago
      >https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis Now do California. Clearly high taxation doesn't correlate to stable electrical power. There's a handful of states without income taxes. They mostly manage just fine. Or about as fine as the states with income taxes. They raise similar revenues in other ways.
      - tjr225 5y ago
        > Now do California. https://en.wikipedia.org/wiki/2000%E2%80%9301_California_electricity_crisis https://en.wikipedia.org/wiki/2000%E2%80%9301_California_ele... All I could find was this, the wikipedia article doesn't mention any deaths however, whereas it appears 70 people died during the Texas crisis this year. I'm aware of the rolling blackouts in the bay area least year as my employer was impacted but it seemed more or less livable due to their rolling nature. I live in a state without income tax. Its actually quite a shit show: https://www.bizjournals.com/seattle/news/2020/10/22/mark-harmsworth-west-seattle-bridge-repair.html https://www.bizjournals.com/seattle/news/2020/10/22/mark-har...
    - deleted 5y ago
      [deleted]
    - _-david-_ 5y ago
      Believe it or not that was not due to taxes.
      - tjr225 5y ago
        If there was a greater tax base in Texas a more robust energy infrastructure could have been in place. However; their votership preferred to keep things as is. They suffered the consequences. This is very, very simple.
  - wolverine876 5y ago
    > many states (such as Texas) have no income tax at all, yet they manage That's debatable. Just because they do it doesn't mean it's a good idea.
  - elliekelly 5y ago
    What if $company, for whatever reason, decided every employee in $state would have their salary reduced by X% across the board and $state announced they would step in and use taxpayer money to make up the difference in $company employee paychecks. Would you be absolutely fine with your taxpayer money being used to subsidize labor in that way? What if $company is highly profitable and sitting on more cash than $state government has available? What if you're a business owner in $state and have to compete in the market for labor where one big player with tons of money gets to pay less for the same work? It's not about income tax so much as it is about the government subsidy being granted and whether or not it's the best use of the government's limited financial resources.
  - nrmitchi 5y ago
    Texas, rather than having income taxes, just has relatively high property taxes compared to other states. It's not like you don't pay any taxes living in Texas. In fact, I would consider high property taxes with zero income tax to be a rather regressive form of taxation that strongly benefits high income earners.
  - piva00 5y ago
    > Property taxes will go to fund schools and state governments, not to mention localized sales tax and cash infusion. And poor areas become poorer because the local municipality collects less taxes than the one with more affluent residents. Ultra-locality of spending isn't efficient, it just maintains the status quo, it makes counties compete between each other for companies or residents and not all can attract the rich people or companies to fund themselves. Schools should be equally funded regardless of how rich the people who live in the area are. This is the most basic component for an equitable society: a level playing field on education.
- throwaway0a5e 5y ago
  The title was altered by the submitter. "Kickback" isn't a word Apple or the NC .gov would touch with a 10ft pole. It appears nowhere in the article. I suspect it was altered that way to promote exactly the reaction you had.
  - La1n 5y ago
    Does it matter that they say kickbacks when the article implies it is? >These payments are recouped from the income taxes Apple’s new employees would normally pay to the state.
    - dariusj18 5y ago
      What confuses me is the wishy-washiness of "would normally pay to the state". Are they not paying the money to the state?
  - lsy 5y ago
    From the North Carolina Dept of Commerce: “JDIG grant payments are determined using a formula that takes into consideration the new taxes generated by the new jobs that are created. A percentage of those newly generated funds are reimbursed to the awarded company, for the limited term of the grant and as long as the company meets its performance target.” I’m not really worried so much about the nomenclature used, but the principle of reimbursing my taxes to the company makes me uncomfortable.
    - piva00 5y ago
      It smells of state funding with a bunch of extra steps...
- onlyrealcuzzo 5y ago
  Also - how is this remotely fair to all the other software and hardware companies in NC that employ people and provide similar benefits but still have to pay state income tax? If there's anyone who /doesn't/ need a competitive advantage, it's Apple. They are utterly smashing their competition in every regard already.
fallingfrog 5y ago
This should be illegal. First off, it is deeply immoral to tax employees and give the money straight to their employer. But also, you don’t want to have this situation where states are competing with each other to see who can give the most corporate welfare- it creates a race to the bottom that forces all the tax burden onto the middle class in every state. It ought to be a level playing field by federal law.
- function_seven 5y ago
  Planet Money did a good episode on this[0], looking at businesses in Kansas City (which straddles two states), and how they would pit Missouri and Kansas against one another for tax breaks, without having to move their operations very far. [0] https://www.npr.org/sections/money/2018/11/16/668769284/episode-699-kansas-city-vs-kansas-city https://www.npr.org/sections/money/2018/11/16/668769284/epis...
- travisjungroth 5y ago
  I agree about the consequences about governments competing on taxes. The problem is that this: "It ought to be a level playing field by federal law." would darn near mean we wouldn't have states. One of the defining things about a government is they set their own tax rates. Doing it federally wouldn't even mean a level playing field. Countries compete on tax rates, too.
  - staticman2 5y ago
    I wouldn't mind seeing the federal government say if a business gets a better tax deal than any other business in the locality, the federal government raises taxes to wipe out the difference. (That said I don't know in practice if this can be implemented) This wouldn't prevent states from competing on tax rates, but they couldn't compete on special tax incentived to large businesses.
  - trentnix 5y ago
    Countries competing on tax rates is exactly why Janet Yellen has floated the idea of a 'Global Minimum Tax'. Countries competing gets in the way of the grand vision she and her ilk share for how they want to organize society.
minhazm 5y ago
This is over 39 years. $845.8M / 39 = $21.68 million per year. > Apple is promising $1 billion in investment across the state, as well as 3,000 new jobs with an average annual salary of $187,000. All told, the state estimates more than $1 billion in economic benefits annually from the project. Does Apple need that kickback? Probably not. But it's also pretty negligible at only $21.68 million per year when they're providing $1 billion of economic benefit annually. These are all high paying jobs so the state and local governments are going to get a massive amount of new taxes, even net of these rebates.
- fshbbdssbbgdd 5y ago
  Although the “$1 billion in economic benefits” is from an economic model assuming some multiplier effect from Apple’s spending. It’s possible for these types of projections to be wildly optimistic. I wouldn’t put much stock in it without more details, or a review of the model from other economists.
  - deleted 5y ago
    [deleted]
- LanceH 5y ago
  That article is working really hard to say that Apple is getting paid $845M. Are they not getting refunded that amount, or do they get paid that no matter whether they bring the jobs or not? There really is a difference. A refund as a percentage amount indicates some positive increase in taxable income (though not necessarily enough to cover additional expenses). Calling a rebate a payment is just a deliberate attempt to fan the flames. I'm all for not playing favorites, but articles could at least make an attempt at being accurate.
  - londons_explore 5y ago
    > I'm all for not playing favorites The real way to not play favourites is to reduce the tax rate. Then everyone is getting a rebate. Everything else is just playing favourites.
llampx 5y ago
I think the Amazon brouhaha of 2019 proved that most cities and states are ready to roll out the red carpet and give big sops to FAANG if they hint that they're considering an office in their state. Whether that is a net positive for the state and it's residents remains to be seen. It can be enough if it's a feather in the cap of a governor who's up for reelection.
JohnWhigham 5y ago
Corporate States of America. No better example to show the fleecing of our country's governments than this. Absolutely disgusting at the dearth of integrity in lawmakers.
systemvoltage 5y ago
I have some bad news: The competition is on an international stage. Raise taxes in New York? Billionaires flee to Singapore. No juicy incentives in Pittsburg? Welcome to Guongdong! Labor laws suck in California? Hope you like some asamlaksa and durian, off to Malaysia!
- anotha1 5y ago
  It's a race to the bottom. Let those other places harbor the biggest tax avoiders. Those companies will have to risk the chance of regretting that decision in the future.
coliveira 5y ago
Essentially they're stealing money from their own employees. That's what it amounts to.
deleted 5y ago
[deleted]
wolverine876 5y ago
Small businesses are at a big competitive disadvantage, trying to compete with big companies that get these massive handouts. At least NC should apply the tax breaks evenly to any newly created jobs. I wonder if it violates the prohibition against a bill of attainder or similar laws that benefit/harm a specific party.
vsskanth 5y ago
It's interesting states or cities are allowed to give deferential tax treatment for specific companies. I thought that would be considered discrimination if you consider corporations as people.

58 points by watchdogtimer 5y ago

lsy 5y ago

This would make me extremely uncomfortable as an employee. I expect my state taxes to go to help cover expenses across the state, pay for social programs, emergency expenditures, etc. Knowing that my tax dollars were being kicked back to my employer would make me feel like I wasn’t putting in my fair share. I understand that money is fungible and companies get tax breaks often but the way this is phrased puts a bad taste in my mouth.

ed25519FUUU 5y ago
Maybe I'm in the minority but I would feel absolutely fine. Income tax is just one part of the pie. In fact, many states (such as Texas, Washington, and Florida) have no income tax at all, yet they manage. Property taxes will go to fund schools and state governments, not to mention localized sales tax and cash infusion.
- tjr225 5y ago
  > In fact, many states (such as Texas) have no income tax at all, yet they manage. https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis
  - throwaway0a5e 5y ago
    >https://en.wikipedia.org/wiki/2021_Texas_power_crisis https://en.wikipedia.org/wiki/2021_Texas_power_crisis Now do California. Clearly high taxation doesn't correlate to stable electrical power. There's a handful of states without income taxes. They mostly manage just fine. Or about as fine as the states with income taxes. They raise similar revenues in other ways.
    - tjr225 5y ago
      > Now do California. https://en.wikipedia.org/wiki/2000%E2%80%9301_California_electricity_crisis https://en.wikipedia.org/wiki/2000%E2%80%9301_California_ele... All I could find was this, the wikipedia article doesn't mention any deaths however, whereas it appears 70 people died during the Texas crisis this year. I'm aware of the rolling blackouts in the bay area least year as my employer was impacted but it seemed more or less livable due to their rolling nature. I live in a state without income tax. Its actually quite a shit show: https://www.bizjournals.com/seattle/news/2020/10/22/mark-harmsworth-west-seattle-bridge-repair.html https://www.bizjournals.com/seattle/news/2020/10/22/mark-har...
  - deleted 5y ago
    [deleted]
  - _-david-_ 5y ago
    Believe it or not that was not due to taxes.
    - tjr225 5y ago
      If there was a greater tax base in Texas a more robust energy infrastructure could have been in place. However; their votership preferred to keep things as is. They suffered the consequences. This is very, very simple.
- wolverine876 5y ago
  > many states (such as Texas) have no income tax at all, yet they manage That's debatable. Just because they do it doesn't mean it's a good idea.
- elliekelly 5y ago
  What if $company, for whatever reason, decided every employee in $state would have their salary reduced by X% across the board and $state announced they would step in and use taxpayer money to make up the difference in $company employee paychecks. Would you be absolutely fine with your taxpayer money being used to subsidize labor in that way? What if $company is highly profitable and sitting on more cash than $state government has available? What if you're a business owner in $state and have to compete in the market for labor where one big player with tons of money gets to pay less for the same work? It's not about income tax so much as it is about the government subsidy being granted and whether or not it's the best use of the government's limited financial resources.
- nrmitchi 5y ago
  Texas, rather than having income taxes, just has relatively high property taxes compared to other states. It's not like you don't pay any taxes living in Texas. In fact, I would consider high property taxes with zero income tax to be a rather regressive form of taxation that strongly benefits high income earners.
- piva00 5y ago
  > Property taxes will go to fund schools and state governments, not to mention localized sales tax and cash infusion. And poor areas become poorer because the local municipality collects less taxes than the one with more affluent residents. Ultra-locality of spending isn't efficient, it just maintains the status quo, it makes counties compete between each other for companies or residents and not all can attract the rich people or companies to fund themselves. Schools should be equally funded regardless of how rich the people who live in the area are. This is the most basic component for an equitable society: a level playing field on education.
throwaway0a5e 5y ago
The title was altered by the submitter. "Kickback" isn't a word Apple or the NC .gov would touch with a 10ft pole. It appears nowhere in the article. I suspect it was altered that way to promote exactly the reaction you had.
- La1n 5y ago
  Does it matter that they say kickbacks when the article implies it is? >These payments are recouped from the income taxes Apple’s new employees would normally pay to the state.
  - dariusj18 5y ago
    What confuses me is the wishy-washiness of "would normally pay to the state". Are they not paying the money to the state?
- lsy 5y ago
  From the North Carolina Dept of Commerce: “JDIG grant payments are determined using a formula that takes into consideration the new taxes generated by the new jobs that are created. A percentage of those newly generated funds are reimbursed to the awarded company, for the limited term of the grant and as long as the company meets its performance target.” I’m not really worried so much about the nomenclature used, but the principle of reimbursing my taxes to the company makes me uncomfortable.
  - piva00 5y ago
    It smells of state funding with a bunch of extra steps...
onlyrealcuzzo 5y ago
Also - how is this remotely fair to all the other software and hardware companies in NC that employ people and provide similar benefits but still have to pay state income tax? If there's anyone who /doesn't/ need a competitive advantage, it's Apple. They are utterly smashing their competition in every regard already.

fallingfrog 5y ago

This should be illegal. First off, it is deeply immoral to tax employees and give the money straight to their employer. But also, you don’t want to have this situation where states are competing with each other to see who can give the most corporate welfare- it creates a race to the bottom that forces all the tax burden onto the middle class in every state. It ought to be a level playing field by federal law.

function_seven 5y ago
Planet Money did a good episode on this[0], looking at businesses in Kansas City (which straddles two states), and how they would pit Missouri and Kansas against one another for tax breaks, without having to move their operations very far. [0] https://www.npr.org/sections/money/2018/11/16/668769284/episode-699-kansas-city-vs-kansas-city https://www.npr.org/sections/money/2018/11/16/668769284/epis...
travisjungroth 5y ago
I agree about the consequences about governments competing on taxes. The problem is that this: "It ought to be a level playing field by federal law." would darn near mean we wouldn't have states. One of the defining things about a government is they set their own tax rates. Doing it federally wouldn't even mean a level playing field. Countries compete on tax rates, too.
- staticman2 5y ago
  I wouldn't mind seeing the federal government say if a business gets a better tax deal than any other business in the locality, the federal government raises taxes to wipe out the difference. (That said I don't know in practice if this can be implemented) This wouldn't prevent states from competing on tax rates, but they couldn't compete on special tax incentived to large businesses.
- trentnix 5y ago
  Countries competing on tax rates is exactly why Janet Yellen has floated the idea of a 'Global Minimum Tax'. Countries competing gets in the way of the grand vision she and her ilk share for how they want to organize society.

minhazm 5y ago

This is over 39 years. $845.8M / 39 = $21.68 million per year. > Apple is promising $1 billion in investment across the state, as well as 3,000 new jobs with an average annual salary of $187,000. All told, the state estimates more than $1 billion in economic benefits annually from the project. Does Apple need that kickback? Probably not. But it's also pretty negligible at only $21.68 million per year when they're providing $1 billion of economic benefit annually. These are all high paying jobs so the state and local governments are going to get a massive amount of new taxes, even net of these rebates.

fshbbdssbbgdd 5y ago
Although the “$1 billion in economic benefits” is from an economic model assuming some multiplier effect from Apple’s spending. It’s possible for these types of projections to be wildly optimistic. I wouldn’t put much stock in it without more details, or a review of the model from other economists.
- deleted 5y ago
  [deleted]
LanceH 5y ago
That article is working really hard to say that Apple is getting paid $845M. Are they not getting refunded that amount, or do they get paid that no matter whether they bring the jobs or not? There really is a difference. A refund as a percentage amount indicates some positive increase in taxable income (though not necessarily enough to cover additional expenses). Calling a rebate a payment is just a deliberate attempt to fan the flames. I'm all for not playing favorites, but articles could at least make an attempt at being accurate.
- londons_explore 5y ago
  > I'm all for not playing favorites The real way to not play favourites is to reduce the tax rate. Then everyone is getting a rebate. Everything else is just playing favourites.

llampx 5y ago

I think the Amazon brouhaha of 2019 proved that most cities and states are ready to roll out the red carpet and give big sops to FAANG if they hint that they're considering an office in their state. Whether that is a net positive for the state and it's residents remains to be seen. It can be enough if it's a feather in the cap of a governor who's up for reelection.

JohnWhigham 5y ago

Corporate States of America. No better example to show the fleecing of our country's governments than this. Absolutely disgusting at the dearth of integrity in lawmakers.

systemvoltage 5y ago

I have some bad news: The competition is on an international stage. Raise taxes in New York? Billionaires flee to Singapore. No juicy incentives in Pittsburg? Welcome to Guongdong! Labor laws suck in California? Hope you like some asamlaksa and durian, off to Malaysia!

anotha1 5y ago
It's a race to the bottom. Let those other places harbor the biggest tax avoiders. Those companies will have to risk the chance of regretting that decision in the future.

coliveira 5y ago

Essentially they're stealing money from their own employees. That's what it amounts to.

deleted 5y ago

[deleted]

wolverine876 5y ago

Small businesses are at a big competitive disadvantage, trying to compete with big companies that get these massive handouts. At least NC should apply the tax breaks evenly to any newly created jobs. I wonder if it violates the prohibition against a bill of attainder or similar laws that benefit/harm a specific party.

vsskanth 5y ago

It's interesting states or cities are allowed to give deferential tax treatment for specific companies. I thought that would be considered discrimination if you consider corporations as people.