Apple and other left-coast tech giants are some of the biggest winners in the GOP tax bill Congress passed today. For over a decade, these companies have hoarded their overseas profits, waiting for Washington to deliver a tax holiday like the last one in 2004. It was a good bet, as the legislation lets them repatriate those profits at a one-time rate of 15.5 percent — far lower than the 35 percent they were supposed to pay.
Apple, with over $250 billion parked offshore, will enjoy a $47 billion windfall. It will be a green Christmas in Cupertino indeed.
This was all part of the plan. Early last month, the New York Times and the Guardian alerted their readers to a blockbuster Paradise Papers story: Apple had been caught tax dodging again. When the European Union disrupted the company’s Irish tax shelter in 2013, it went shopping for a new offshore haven, eventually settling on Jersey, a tiny British dominion in the English Channel. The Times headline in print was unsparing: “Island Hopping Saved Apple Billions in Taxes.”
Two weeks before the Paradise story landed, the company opened a gleaming new store in Chicago. The transparent, riverfront “Apple Michigan Avenue” is the first installment of the company’s “Town Square” initiative, in which retail outlets double as gathering places for the community. To celebrate the store’s launch, Apple hosted a four-week “Chicago Series” festival, culminating in a slam poetry open mic night.
That’s true, but the point can be sharpened. Apple’s profit-parking — together with the estimated $2.4 trillion held overseas by other American companies — means fewer dollars for real public spaces. If the country’s actual town squares are cracked and weedy, it’s at least partly thanks to fifty years of corporate tax avoidance, which has forced cities to disinvest in public goods. Apple gets tax amnesty. We get an iPhone-lined agora.
“Apple’s Largest Products”
“We actually don’t call them Apple Stores anymore,” explained Angela Ahrendts, the Cupertino device maker’s head of retail and former Burberry CEO. “We call them Town Squares, because they’re gathering places for five hundred million people who visit us every year.”
Whatever you call them, Apple’s retail spaces are glass-and-maple metonyms for the company — “Apple’s largest products,” in Ahrendts’ words. When the first store opened in 2001, the press and the company’s competitors mocked the venture. But more than fifteen years later, the five hundred or so locations generate far more revenue per square foot than any other retailer — almost double the second-place, diamond-dealing Tiffany & Co. The flagship stores occupy prime real estate in the heart of the world’s major cities, and it’s here that the Town Square vision will take shape.
In addition to the main retail floor — a tree-dotted “Genius Grove,” in the company’s new parlance — each of the big-city stores will have an outdoor Plaza and an indoor Forum. The Town Squares, Ahrendts said in September, are places to “relax, meet up with friends, or just listen to a local artist on the weekends.” Come hang out, says Apple; this isn’t about device shopping.
In Paris, the company is renovating a nineteenth-century building on the Champs-Élysées; its five-story atrium will be the company’s largest Forum. A store slated for Milan will include a Forum underneath the city’s Piazza della Libertà in addition to a waterfall entrance. And in Washington, Apple is converting the iconic Carnegie Library in Mount Vernon Square into a flagship store. “We can’t think of a better place than a building originally created for the city to access knowledge,” Ahrendts says.
The Carnegie retrofit will swap the original bookshelves with iPhone galleries, but the inscription on the building’s neoclassical facade — “Dedicated to the diffusion of knowledge” — will remain.
Disinvestment and Decay
Urban public space, especially in the US, has deteriorated over the last several decades. The exceptions all have corporate sponsors: in Chicago’s lakeside Millennium Park, you stroll through AT&T Plaza and across the BP Pedestrian Bridge. Apple, with its enclosures of glass and milled aluminum, is merely taking the next logical step. Its stores are the urban counterpart to the “lifestyle center,” the suburban mall remade as piped-music simulacra of Main Street storefronts.
In the Reagan and early Bush years alone, federal aid to cities declined by 46 percent, or roughly $26 billion. In 1980, federal dollars made up 14 percent of city budgets; by 1992, they comprised less than 5 percent. That drop-off is not Apple’s fault, obviously. But the world’s most valuable company serves as a stand-in for the larger truth.
Corporations avoid taxes and shift the burden onto the rest of us. They open up holes in the budget and then swoop in as logo-bearing saviors. They sponsor public parks, donate school supplies — branded ones of course — and underwrite museum exhibitions. ExxonMobil and the others stop up their own leaks with philanthropic putty.
So Apple isn’t responsible for decades of urban disinvestment. But corporate tax-dodging is, by displacement alone. The country’s real town squares are covered in litter and framed by empty storefronts, so there’s something grotesque about these Jobsian temples claiming the phrase. It’s insult added to budget-draining injury.
Apple’s flagship stores may pitch themselves as icons of American innovation, but they’re really symbols of the country’s disinvestment — its half-century shift of resources from public to private. No chipped concrete or panhandling in these town squares, just iMuzak and new phones.