Apple landed a tax break from Gilbert Public Schools governing board on Monday. According to AZCentral, the five-member board voted unanimously in favor of the deal, which Apple was seeking as an incentive to operate a major manufacturing plant in the area.
According to the report, the board was divided as recently as November 12th, when two members opposed the deal. With the support of local residents and businesses who want Apple to come to the area, those board members changed their mind and voted for it on Monday.
For the most part, I'm a fan of Apple. That's no surprise, of course, but I mention it here because I have grave concerns about the habit of state and local governments and school boards to give fabulously wealthy corporations—including Apple, the world's most valuable company—tax breaks.
We've seen it again and again, in part because those corporations have become adept at playing state and local governments against one another in order to get the best deal they can. That's a rational approach for the companies, and it's obvious that companies like Apple bring quality jobs and good salaries to an area, but it's a race to the bottom that needs to stop.
This is especially true with property taxes, which most U.S. states use to fund schools. All those quality jobs and high salaries bring with them more students for those schools, and when local districts give away the farm, the results are often fewer resources for the schools.
This is the case with the Manor School District outside of Austin, where Samsung won a great tax deal to bring a major manufacturing plant to the area. The results have been crowded classrooms and fewer resources, and this is all too common. Apple has also won significant tax breaks in Austin itself.
At a time when wealth is being concentrated into ever-fewer hands, rich companies like Apple should do the right thing and pay their fair share into the local tax base. That these deals are legal—that state and local governments are willing to cut their own feet out from under them—is irrelevant.
The reality is that it's not good for the families of the workers, and that makes it bad for the companies. Underfunded school districts will make it harder to recruit top workers, especially with high-skill jobs. No one wins, except the shareholders of the companies getting the deals.
But even there, local tax deals are little more than a line item—if that—on the balance sheets of companies as profitable as Apple.
So, Apple: do the right thing. Pay your fair share.
Note that I am a tiny AAPL shareholder.
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