SEIU members hold sign demanding Apple pay more of its taxes in California.

As Tax Day looms, representatives of the Service Employees International Union (SEIU) have been quietly, but persistently, nudging Apple, a company infamous for tax avoidance, to pay up and on Thursday morning, five representatives showed up at the corner of 15th and Mission streets to make their demands.

“They have a staggering amount of cash in off-shore and out-of-state accounts, more than Google or other companies, and public resources that our members rely on — transit, public schools — are struggling,” said SEIU representative Alfredo Fletes. “We need to remind Apple that they impact these things too.”

For an hour this morning, Fletes and his colleagues politely handed out fliers and held signs detailing the scope in which they believe the tech company is avoiding its duties to California. According to SEIU, California loses $221 million in corporate tax because of Apple profits held in Nevada subsidies.

Recent years have seen increased international scrutiny for the Cupertino-based company with subsidies around the world. A Congressional inquiry last May found that Apple consistently avoids paying tens of billions of dollars in taxes by channeling money into off-shore subsidies. Recently, others have been writing about the cash that Apple and other tech companies are sitting on. A Moody’s report showed Apple with $158.8 billion in cash reserves.

According to Fletes, the tax avoidance also happens at a local level when the company sets up subsidies in Nevada, a state with a more favorable tax rate. “What we’re trying to show is the effect that these tax policies have on the Bay Area, their home-base,” said Fletes, who has demonstrated against Apple since Monday, with previous actions at 19th Avenue and 24th at Valencia. Thursday marked the fourth day in a row that SEIU members have made their tax demands at Apple shuttle stops.

Most of the Apple employees lining up for their ride south — about six buses stopped in the course of an hour — avoided conversation with the demonstrators, but the few that were willing to comment noted that Apple isn’t doing anything illegal or uncommon.

“What else is new?” said one Apple employee who would not give his name. “Welcome to America…I don’t know any corporation that doesn’t do this kind of thing.”

A tech employee who was waiting for another private shuttle at 15th and Mission said the tax loopholes were unfortunate and problematic but it wasn’t Apple’s fault they existed.

“I think it’s fair for every company to exploit what exists,” said the unnamed employee. “This is an issue that should be taken up with the federal government or the state of California.”

Fletes says that in the week SEIU has been demonstrating at Apple shuttle stops he’s heard a similar refrain about how Apple’s tax practices are entirely legal. “Yes, but is it ethical?” Fletes asked.

Last year’s Congressional hearings found more or less the same conclusion. While the scope of Apple’s tax avoidance is massive, the company essentially follows the law.

As April 15th approaches, a day in which millions of Americans, including Apple employees, write checks to their federal and state governments, local members of SEIU will keep demonstrating. They’re planning a larger action at the Apple store in Union Square on Tax Day.

“This is about being a responsible corporate citizen,” said Johntell Washington, an SEIU member who held a sign that suggested Apple’s annual avoidance of California taxes could fund Muni upgrades for three years. “They live in the Bay Area, it’s time for them to pay their share.”

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Daniel Hirsch is a freelance writer who has been living in the Mission since 2009. When he's not contributing to Mission Local, he's writing plays, working as an extra for HBO, and/or walking to the top of Bernal Hill.

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  1. SEIU is protesting the entirely foreseeable consequences of California’s high tax rate. Kind of funny, when you think about it.

  2. I want a vigorous and activist public sector when it comes to public services. But there is no evidence that if given money, these neoliberals have any intention of delivering services to taxpayers. Odds are that they would use that money to consolidate their power. So we need to starve the beast until the parasites fall off of it and then swoop in to rescue it before it expires.

  3. You know what else would save Muni money? If they would stop crashing into cars, bikes and people.

  4. They should be in front of City Hall or in Sacramento trying to influence the politicians that make these laws. Apple is doing their taxes legally. Don’t hate the player, hate the game.

  5. Subsidies are what these people want Apple to pay.

    Subsidiaries are what Apple sets up to avoid having to pay.

    1. Subsidies? What are you smoking? The supposed corporate tax rate in the US is 35%, yet Apple paid only 2%.

      “An investigation by the U.S. Senate showed this week that the maker of iPads and iPhones had paid just 2 percent tax on income of $74 billion over the past three years, largely by exploiting an unusual loophole in Ireland’s tax code.”

      Apple is not unusual. Many giant, profitable corporations pay ZERO or even NEGATIVE federal tax (after corporate-welfare subsidies are figured in)

        1. And they should be taxed here, too.

          Taxes logically occur at points of money transfer.

          The whole concept of “double” or triple taxation is a false concept. Money itself isn’t taxed; it’s the _transfer_ of money which is taxed.

          1. There are international and bilateral tax treaties that govern such things, so there isn’t the freedom to just tax in the way you describe.

            I recall a decade or more ago, California was trying to tax foreign corporations on their world-wide revenues, rather than just their revenues in California. IIRC, there was a huge lawsuit and the federal government stepped in and basically told CA to change it’s tax rules because it had no jurisdiction overseas.

            It’s true that taxes are often applied multiple times on the same dollar. I think that is wrong and you do not. But either way, you can hardly have that system and then complain when money changes hands less often.

  6. Apple’s tax evasion may not be breaking the law, but it’s definitely unethical. How would Apple’s thousands of employees get to work if not by driving on streets and highways maintained by state and local governments? In a state where nearly 25% of residents live below the poverty line, asking Apple to pay a fraction of its income in taxes is a moral requirement.

    1. I think the mistake that many people make is thinking that if corporations pay more tax, then the rest of us will magically pay less.

      The problem with that reasoning is that corporations are really just pass-through mechanisms. All taxes are ultimately paid by people and so if, say, Apple pays another billion in taxes, then that money is recaptured either by higher prices for their products or lower pay for their workers or lower dividends for their shareholders (i.e. your retirement account).

      So I would argue that it doesn’t really matter how much or how little tax corporations pay. In the end it comes out of your pocket and my pocket, one way or the other.

      That said, I think the US corporate tax system is in dire need of reform. If “the business of America is business” then why does America tax businesses at higher rates than all our major competitors?

      It is those high tax rates that cause corporations like Apple to retain profits overseas rather than repatriate them here.

      That’s also why US corporations like Eaton have offshored themselves. And why many other US companies have converted to REITs or MLPs or Royalty Trusts, on which no corporation tax is levied anyway.

      We need reform. But self-serving unions holding out their hands for ever more handouts so that their members can avoid the real world isn’t helping the debate at all.

      1. America’s theoretical 35% corporate income tax (often cited by dim-bulb Rush Limpbaugh fans as “the highest in the world”) is simply NOT what they’re paying. Not even close – Apples effective rate was only 2% .

        The code is so complex and riddled with special treats for the bribing-class that many corporations effectively pay ZERO percent.

        General Electric goes even further in its tax avoidance: paying NEGATIVE TAXES after all their federal subsidies are figured in. You might think GE’s CEO Jeffery Immelt would get in trouble for this, but you’d be wrong: Obummer appointed him head of the “Jobs Council”. Apparently, Immelt’s tax avoidance, as well as his exporting of American jobs and technology to China make him some sort of hero to the 1% and their Uncle Tom in the White House.

      2. John, I’m definitely not making the mistake of thinking that if Apple pays more tax, I’ll pay less. This isn’t about shifting the tax burden to someone else. It’s about funding our crumbling infrastructure and social services.

        Taxing companies like Apple, which is sitting on $158 billion in reserves, will come out of neither your nor my pocket but a giant slush fund of underemployed capital. Apple operates in a competitive market – if it raises prices, it loses market share.

        1. You say that but then you cite this supposed 158B slush fund that you perceive as just there for the taking, as if you deserve it for your own personal agenda.

          Word. It’s not your money, no matter how much you may covet it.

          1. Sorry you don’t like my “personal agenda.” Here’s a partial list of the things government does with corporate tax revenue:
            – Pays for local public schools
            – Pays for the University of California
            – Pays for transit projects like BART and Caltrain
            – Builds highways and paves streets
            – Builds dams and aqueducts
            – Supports the housing market through Fannie and Freddie
            – Protects your property rights

            I could go on. If you don’t like this personal agenda of mine, feel free to stop driving on government-built streets and highways, stop drinking water from Hetch Hetchy, don’t send your kids to schools that receive public funding, and don’t take out a mortgage backed by Fannie or Freddie. You could even go off the dollar and pay for everything in gold.

          2. Dude, John is an extreme rightwing libertarian.

            He thinks all those things you listed are communism, even, ironically enough, state protection of property rights.

          3. Zouaf, you are effectively arguing that everything the government does is wonderful and so we should have more and more of it, paid by more and more taxes.

            It boils down to big government versus small government debate and that gets way beyond the scope here. Suffice to say that I do opt out of as many government activities as I can, and I believe that many of them could be privatized, outsourced or simply shut down. I also want to see public sector pensions reformed before I support any tax increase.

      1. For once I’ll agree with you. You actually bring up an interesting point. Perhaps there’s a “path to ownership” program for renters that allows for some deductions, financial education, etc.

        1. wtf?

          That’s no mortgage interest deduction for YOU, thatguy. You been freeloading long enough, freeloader.

  7. This is a good first step: loudly calling corporate America out on its blatant tax avoidance.

    These companies invest vast sums on “lobbying” (a polite word for bribery) to influence tax code so they can weasel out of paying.

    Focusing sunlight on this festering sore on the body of America may not be a cure, but it won’t hurt. Recognition of disease is the first step, only after that can diagnosis and treatment begin.

    1. It is sorta odd to complain about Apple’s lobbying. SEIU spends a huge amount on lobbying and political donations to ensure that tax dollars find their way into its pockets.
      BTW, you understand that “tax avoidance” is perfectly legal and most individuals do it too.

      1. I’m not a fan of the SEIU and question whether public unions should be permitted to exist at all. But, really, about the worst that can be said of their efforts is that they result in too many blue-collar persons achieving economic security.

        Comparing that to lobbying by a hugely wealthy company like Apple is a stretch.

        Corporate lobbying is aimed at tax avoidance and other special privileges… and it WORKS: Apple pays an effective corporate tax rate of 2% even though the nominal rate is 35%.

        When you get into lobbying by “defense” corporations, the situation gets even worse – with the goal being permanent war (and thus permanent war-profiteering) on top of the tax avoidance.

        Lobbying, in general, puts the economic interests of particular corporations AHEAD OF the long term strategic interests of the nation as a whole. And that’s why the US is in decline.

        Although tax policy is (intentionally) inscrutable and boring to average citizens, the core issue is simple: our system of legalized bribery that allows foxes to guard the henhouse.

  8. Apple, Facebook, Twitter and Google need to each pony up $200m to invest in CalTrain, doubling the projected ten minute headways post-electrification in 2017 and connecting the CalTrain mainline to Muni and transit on the Peninsula and in Silicon Valley.

    That is the way that these firms can demonstrate their commitment to the region and benefit hundreds of thousands, not just themselves. I’m sure that the state and feds could craft up tax breaks to sweeten such a deal.

  9. Who are we kidding here? SEIU exists for only one reason – to perpetuate the excessive pay and benefits of their members and, in particular, the outrageous unfunded liabilities for their pension and healthcare benefits, which rely on an endless increase in taxes to sustain.

    The irony here is that Apple would pay almost taxes to San Francisco anyway. Maybe just the couple of stores. Even if Apple volunteered to pay more taxes than they owe (which is really what is being suggested here) the city wouldn’t see any of it.

    If SEIU wants to lobby the federal government to hike taxes so that their members can continue to enjoy benefits the like of which the rest of us can only dream about, then let them try and do that. But they will discover that much of the nation is not sympathetic to their constantly-proffered begging bowl.

    A better solution is to lower the rate of corporate taxation in the US, which is the highest rate in the West. And stop penalizing corporations which do the right thing and repatriate earnings to the US. That’s the real outrage.

    1. John, your vitriolic dislike of unions may be clouding your judgement here. I don’t think they are suggesting that Apple should *voluntarily* pay more in taxes, they are calling for corporate tax reform. Like you suggest, that could involve lowering rates – but it would also involve closing loopholes so that companies pay taxes where they do business. When corporations support the state, that’s not a handout to unions – it pays for infrastructure and social programs that benefit everyone.

    2. Get a blog, dude. After a thousand posts, your morally and intellectually bankrupt screeds haven’t won a single convert. Time to move on and stop using up bandwidth.

      If anything, you’ve confirmed everything we’ve suspected about landlords. Parasites.

    3. While the listed corporate tax rate is high, the effective corporate tax rate (what corporations actually pay after taking advantage of every loophole in addition to every offshore haven available) is one of the lowest in the developed world. Estimates by the GAO, independently confirmed by PWC (in case your tinfoil gubmint conspiracy hat is on too tight), determined the average effective corporate tax rate is 12.6%. That’s right, I as a high earner pay more than double what corporations pay, they need to pay their fair share. stop parroting what you hear on Rush and do some actual research.