Apple is the most valuable company in the world, but in one state, local governments are considering giving the computer giant millions in tax breaks.
Travis County, Texas may give Apple $7.4 million in property tax rebates over the next 15 years to hire "economically disadvantaged" locals, according to several Austin news outlets. And that's after Texas and the city of Austin already agreed to pay Apple $29.6 million to create a new campus in the city.
Under Travis County's proposal, Apple would receive the $7.4 million tax break if a certain share of the workers the company hires are unemployed, live in a poor area or have gone through job training, according to the Austin American-Statesman.
With state and local governments facing shrinking budgets, deals like those currently being considered by Travis County have become more controversial. Some argue that using tax breaks to lure big companies will help create jobs and boost revenue, while others say local governments are simply subsidizing private, profitable companies even as they continue to slash services.
In the case of Apple in Texas, local governments would likely lose money on the deal assuming they give Apple the entire $37 million tax break to open a campus in Austin. That's because the city of Austin estimates that the net benefit of Apple's new campus in Austin would be $23.2 million over 14 years: less than two-thirds the size of the tax breaks that state and local governments are offering.
Even as Travis County officials are considering giving huge tax breaks to Apple, the Texas government is slashing services to cope with a a $4.1 billion budget shortfall. Texas Governor Rick Perry is laying off 49,000 Texas teachers and cutting off financial aid for 43,000 Texas college students, according to the Texas State Teachers Association. Other public services slated for cuts include crime victim services, disability services, and homeless services, according to the Texas Tribune and Fort Worth Star-Telegram.
Apple plans to hire 3,600 workers in Austin, and the average wage for those workers would be $63,950 per year: one-fifth higher than the average wage in Travis County, according to the city of Austin.But getting generous tax breaks from state and local governments isn't the only way that Apple avoids paying U.S. taxes. About two-thirds of Apple's money is parked overseas, where the company pays an international tax rate of less than 3 percent. Apple's CFO said in the company's latest conference call that it does not plan to repatriate its money because of the U.S.'s corporate tax policy.