Silicon Valley: Land of the 21st-century robber barons

Apple, Amazon.com, eBay, Facebook, Google, and the other technorati believe someone else should pay taxes, hire Americans, or support the society they sell to

When it comes to paying taxes, Apple doesn't "think different." Like every other global corporation, it does its best to pay as little as is legally permissible. The difference, though, is that Apple does it better than most and tries to convince the people who are stuck with the bills that this is a perfectly normal state of affairs.

In just three years, Apple's tax avoidance ("evasion" is such a tacky word) efforts shifted at least $74 billion from the reach of the Internal Revenue Service, according to an explosive report by a Senate subcommittee.

[ InfoWorld's Caroline Craig explains why Silicon Valley's push for H-1B visas will hurt American tech workers. | Silicon Valley is lying about the state of U.S. tech education. | Stay ahead of the key tech business news with InfoWorld's Today's Headlines: First Look newsletter. ]

I'm no Apple hater; it makes great products I'm happy to use, and it employs tens of thousands of people directly and in its supply chain. But the more I think about its role in public life, the angrier I get. Apple, in its own way, is un-American. Sadly, it has plenty of company in Silicon Valley.

The new aristocracy lives in Silicon Valley
The princelings of technocracy aren't bad people, but their wealth insulates them from the shared experiences that create community. They are a class apart -- maybe even a nation apart. They're the 21st-century successors to the rail and banking tycoons that ruled in the late 19th and early 20th century: the robber barons.

Consider this anecdote told by George Packer in his thoughtful piece in the May 27 issue of the New Yorker: When state budget cuts threatened the quality of their local school, parents in Woodside, Calif. -- one of the wealthiest enclaves in Silicon Valley -- stepped up their fund-raising efforts. The Woodside School Foundation now brings in about $2 million a year for a school with fewer than 500 children. In a fund-raising auction, one parent bid $20,000 for a tour of the Japanese gardens of Oracle CEO Larry Ellison, while others paid twice that much for seats at a Mad Men Supper Club dinner for 16 guests.

I'm sure that many of those people would be appalled and upset by the terrible conditions of the underfunded schools in nearby East Palo Alto, and they might even make donations to help out. But I doubt many of them connect the very obvious dots: When big companies and wealthy individuals fail to pay taxes, legally or not, the community suffers.

What makes this so galling in my mind is the hypocritical and egotistical belief in Silicon Valley itself that it is the most enlightened patch of real estate on the planet.

Silicon Valley won't pay fair share, then decries poor public results
As Alec MacGillis of the New Republic points out, it's a bit rich for Apple to argue -- as Steve Jobs did for years, and Tim Cook does now -- that the company needs more visas and green cards for foreign engineers because there aren't enough qualified Americans to fill tech jobs (patently false, by the way), while Apple does its damnedest to keep its contribution toward federal education aid as paltry as possible.

Comments Packer:

This is an example so blatant I couldn't have dreamt it up, of the self-deception that exists alongside the hard work, idealism, and engineering brilliance of Silicon Valley. It's the kind of blind spot to which young, self-confident, super-successful industries are especially prone.

One of the subsidiaries set up by Apple in Ireland has paid no corporate income tax to any nation for the past five years, although it reported $30 billion in net income from 2009 to 2012. Another subsidiary has paid a tax rate to Ireland of 0.1 percent or less in 2009, 2010, and 2011, far below the normal Irish corporate income tax rate of 12 percent, according to the Senate subcommittee's report.

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