Apple, which is headquartered in Cupertino, Calif., not only avoids federal taxes, it avoids state taxes, too. As the New Republic reports:
With a handful of employees in a small office here in Reno, Nev., Apple has done something central to its corporate strategy: It has avoided millions of dollars in taxes in California and 20 other states. Apple's headquarters are in Cupertino, Calif. By putting an office in Reno, just 200 miles away, to collect and invest the company's profits, Apple sidesteps California state income taxes on some of those gains. California's corporate tax rate is 8.84 percent. Nevada's? Zero.
Long before he was insanely wealthy, Steve Jobs attended DeAnza College in Cupertino. In those days, local kids could get a good education for a relatively modest amount of money. Not any more -- California's junior and community colleges are in terrible shape.
If they were truly part of the community, leaders of Silicon Valley would declare an emergency and find ways to help, maybe by even paying their fair (as opposed to merely legal) share of their corporate taxes. Instead, they lobby for more and more low-paid foreign workers on H-1B visas, and they disparage the U.S. educational system and the merits of American workers.
When I say "disparage," I'm not exaggerating. Here's what Google's Eric Schmidt had to say in a recent appearance on CNN: "There are simply more smart Indians and Chinese than there are Americans." I guess that statement is literally true, as MacGillis points out, because those countries are so much larger than ours. But I don't think volume was what Schmidt meant.
Facebook's Mark Zuckerberg was pretty candid in a Washington Post op-ed, throwing his weight behind immigration reform: "To lead the world in this new economy, we need the most talented and hardest-working people."
Really? More talented and harder working than U.S workers?
You'd think that comments like that would infuriate the Senate, but despite the damning report, Republicans and Democrats alike fell over themselves to tell Tim Cook what a great company he runs. "I love Apple. I love Apple," enthused Sen. Claire McCaskill.
To be clear: Tax avoidance is not just an issue for Apple. U.K. leaders have berated Google's leadership publicly for avoiding British taxes through Irish tax shelters, and Starbucks has been excoriated by Parliament for claiming it makes no profits in the United Kingdom in another example of shell companies used to (legally) avoid taxes. In the U.S., it has quite literally taking an act of Congress to force Amazon.com and other Web retailers to do right and help starved state governments furnish services by collecting billion in taxes on online sales. Until recently, multi-billion-dollar operations like Amazon and eBay argued that e-commerce and the Internet were too new and too fragile to follow the rules same rules as brick-and-mortar businesses. Amazon has accepted the taxes, but eBay continues to email its members asking them to lobby Congress to kill the tax bill.
All those people are entitled to their opinions, however obnoxious or self-serving. But if we're smart, we'll stop drinking the Silicon Valley Kool-Aid and realize that, yes, the rich are different than you and me. They don't believe they have to pay taxes.
This article, "Silicon Valley: Land of the 21st-century robber barons," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.