Can our city learn from Cupertino?
I was startled Sunday when I saw the title of Robin Brown’s column “It takes a village to build a thriving local economy.”
For a moment I thought to myself, “They have found Hillary Clinton on the monument, her wanderings have ceased — the political Odysseus has found her Ithaca.”
Come to find out (as they say in South Texas) it was merely a headline attached to Ms. Brown’s interesting column about local cooperation, that echoed Mrs. Clinton’s opus on what she believed was necessary to raise a child.
I was relieved as internet research on the topic indicates the product most closely associated with a village is idiots.
This is not to say the production of any world-class product is without merit, however that particular one is not generally linked with being one of the sinews of industry.
Nevertheless, while I don’t believe in communal anything, I do agree cooperation on a goal for economic development is critical. However, it’s not as easy as it sounds because economic prosperity doesn’t mean the same to everyone and even at its best isn’t all unicorns and rainbows.
For example, a number of folks would like to see our community with an industry like Cupertino California, the home of Apple.
Apple originally chose the city because of its proximity to world-class educational institutions, producing highly specialized graduates to fill the needs of their company in an area accessible to transportation, importation of materials from overseas and near desirable locations for employees.
In 2012 the company was accounting for about 18 percent of the city’s budget, however by 2011 when the company wanted to build a new headquarters dubbed “the Mothership,” some on the city council began to be confused about the relationship between government and industry.
Steve Jobs, took his always capitalist approach when a councilmember asked what the city got out of the new headquarters and suggested maybe they should get free Wi-Fi.
Jobs responded, “See, I’m a simpleton and I’ve always had this view that we pay taxes and the city should do those things. 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 also mentioned that perhaps the company should consider moving to Mountain View, the home of Google, if the city was unhappy with their present arrangement.
It turned out the city was just fine with the present arrangement.
Now, the company wants to build an even larger headquarters, dubbed by wags “The Death Star” and some in the community are now unhappy with the impact that such a large business has on the city.
They are complaining of traffic congestion, failing infrastructure and the high price of housing and some would like Apple to pay more, since they are apparently causing the problem.
Cupertino Mayor Barry Chang felt Apple should contribute another $100 million to the local economy to help with infrastructure costs. The idea didn’t get much traction as some said the reason infrastructure was aging was tax revenue which had been collected was going to government salaries, increased bureaucratic process and pensions — not infrastructure.
Stop me when this stops sounding familiar.
Apple, by the way, is one of the most flagrant tax avoiders among American corporations. By channeling overseas profits through Ireland and other machinations they avoid much in the way of U.S. taxes and are estimated to be holding around $79 billion abroad rather than bringing the funds to the United States, with the one of the world’s highest corporate tax rates.
According to the New York Times, in 2012 Apple paid an effective worldwide tax rate of 9.8 percent while wicked Walmart paid a rate of 24 percent.
Then there’s the problem of California’s 8.4 percent corporate tax which the company avoids paying much of by locating its base for returning portions of foreign income in Nevada, which has no corporate tax.
So, a lot of money stays away from Cupertino, because the state and federal governments aren’t moving in a way that helps the local economy.
While some of Cupertino’s problems are of its own making, like discouraging home construction while complaining of the high cost of housing, it remains a lesson of what happens when one group wants more eggs from the goose while others are trying to cook it.