As the Iowa State Daily Editorial Board noted in one of our first editorials of the academic year, Governor Kim Reynolds must explain how tuition increases can coincide with corporate tax cuts to companies worth billions. Gov. Reynolds seemed quick to react in partial to the Editorial Board’s request as she happily announced tax breaks for Apple’s new data center slated to be built in Waukee.

Apple, which announced its new iPhone X worth $999 on Tuesday, will earn “about $4.26 million per permanent full-time position it creates at the Waukee data center,” according to the Des Moines Register. That is money from local and state governments that could be going toward education spending in both the local communities and here at Iowa State.

In the third quarter of the 2017 fiscal year, Apple recorded a quarterly revenue of $45.4 billion. Gov. Reynolds stated “they chose Iowa.” This begs the question, did Apple choose Iowa because of our state's values and ethics? Did Apple choose Waukee because of their community and talent? Or, did Apple choose Iowa because the state governor and local mayor were willing to shell out millions of dollars to create around 50 new jobs with a big-name corporation?

The fact of the matter is that Apple will build its data center in Waukee and enjoy billions of dollars worth of tax credits while local Iowa families struggle to pay a 40% tuition increase at Iowa State over the next five years. The state legislature failed to appropriate enough funds for our state universities while offering billions of dollars in tax credits to the largest corporations in the world.

We now can ask Gov. Reynolds and the state legislature who they represent. Do they represent the special interest of 50 workers at an Apple data center in Waukee? Or, do they represent the tens of thousands of Iowa students in state universities? The Editorial Board recognizes that this is not necessarily an either/or issue. Iowa can offer corporate tax breaks to bring jobs to the state. However, it is irresponsible to give potential state dollars away when Iowa students are facing a 40% tuition increase directly linked to the state’s inability to fund higher education.

The state of Iowa just went through a round of budget cuts in the last legislative session and is facing new budget challenges in the months ahead. It should be clear for all students of Iowa State, Gov. Reynolds chose Apple over affordable college. 

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Letter to the Editor Submission Link

(4) comments

Parker Trelka

You make it sound like the government is giving Apple money in your article. America does have one of the highest tax rates in the developed world. There are many loopholes that companies use to get around some of these taxes, but in this case won't Iowa benefit more with Apple having a data center here? The executives of Apple are not just going to pocket the income they do not have to pay in taxes now, they will use it to invest in their company so they can make more money in the future. This in turn creates more jobs.
Tuition would probably be increased without tax breaks, as demand for a product increases the price for that product increases, and more and more people are going to college. If America wants to end tax breaks we should have a flat tax nation wide and simplify our tax system.

Steve Gregg

I'd like to thank the lefty editors of the Daily for writing a nearly perfect illustration of the irrational lefty mind: selfish, greedy, innumerate, economically illiterate, and covetous.

Governor Reynolds can not possibly explain how tuition increases coincide with corporate tax cuts because there is no connection. The claim of the lefty editors that there is such a connection is fallacious thinking, specifically a propter hoc error, the sophomoric error that declares coincidence to be causation. Furthermore, they don't even try to explain this nonexistent connection themselves, but shift the burden of proof erroneously to the Governor to explain their irrational argument. So, right from the opening, the argument of the lefty editors of the Daily is one of uneducated extremist numbskulls.

The lefty editors of the Daily acknowledge that Apple will earn $4.26 million per each of the fifty permanent full-time positions at this Waukee data center while also claiming that Iowa will give it "billions of dollars worth of tax credits." Let's do a little experiment in arithmetic, shall we? Fifty positions earning $4.26 million each comes to $213 million, not a billion. So, where exactly are the math-handicapped lefty editors getting billions of bucks in tax credits out of $213 million? I know, math is hard for you and, really, liberals feel arithmetic is some kind of right wing black magic that hexes them, but couldn't you find somebody who can work a calculator and explain numbers to you so that you don't make such fools of yourselves?

But wait, it gets worse. That $213 million is GROSS revenue, not net profit. The lefty editors of the Daily may be astonished to learn that you don't get to pocket the entire price of your services. You have to pay for salaries, benefits, machinery, buildings, et cetera. Apple makes a net profit of 19%, which means that of that $213 million in gross revenue, only $40 million is profit. So, lefty editors of the Daily, how do you get billions of tax credits out of $40 million? If the lefty editors think this dinky little data center is getting billions of tax credits, then let's assume they mean two billion bucks at a minimum, which is FIFTY times its net profits. Tell us, lefty geniuses, how do you squeeze two billion bucks out of forty million?

Their inability to run a calculator is why you should ignore anything about money written by the lefty editors of the Daily, the same way you would not take financial advice from chimps in the zoo. Most lefty ideas founder on simple arithmetic.

The next stupid idea in this wacky lefty editorial is the common lefty idea that if you don't tax somebody, you're giving them money. The evil assumption here is that the government has first claim on your earnings and that anything they don't take, they're giving you. This is akin to a plantation master allowing his slaves to keep some of the money they earn in a side business to motivate them to keep doing it. Simply put, the liberal view, which claims the government is right to take however much of your wages as it pleases, is dead wrong. The conservative view is correct, that you own the wealth you create with your own hands and brain, not the government.

It is good business to offer tax credits to new enterprises. Iowa must compete for new business just like every other state, just like every economic entity on the planet. The good news is that the business climate in Iowa does not suck. Iowa is 14th on the Forbes list of business-friendly states. However, it is competing with states like Utah and Texas which offer far more favorable environments for a data center in many ways than Iowa. To snag that data center, Iowa has to sweeten the deal with tax credits.

Once planted in Waukee, that data center is unlikely to move. The tax credits will expire and the center will pay state taxes for a very long time. Meanwhile, the money spent building the center and paying salaries will have a multiplier effect on the local economy of about half the bucks spent. In other words, every two bucks of salary paid to the engineers in the data center will generate a buck in the local economy from food, rent, gas, and so on. The state collects taxes on those purchases and income from the beginning of operations.

If Iowa plays this smart, they can entice other companies to locate their data centers in Waukee, forming a cluster and building up a labor force to serve it. The more IT shops you have, the more you get because companies are attracted by the friendly environment that supports their business. They see that the other data centers succeeded, which lessens the risk of building a new one there. That means a technically literate work force it can hire, a technical infrastructure it can plug into, a business-friendly environment, reasonable tax regime, and a community where employees want to live. Giving tax credits to lure businesses to Waukee is about growing jobs in greater Des Moines, which provide a larger tax base to support things like universities. It also means being able to find a job in Des Moines so you can stick close to your family rather than be forced to move to some faraway state that has jobs.

However, the shortsighted loony lefty editors of the Daily don't want to do any of that. Like children/liberals everywhere, they can't see twenty minutes into the future. They demand instant gratification. They would rather demand tax money now or chase those jobs out of state rather than give tax credits to create jobs, taking a little bit of taxes now and a lot later. This is how liberals destroy jobs and destroy the future of the cities and states they control. That's how liberals destroyed Detroit.

The worst part of this editorial is the liberal expression of Greed. The lefty editors of the Daily think that because Apple makes a lot of money, they should get a cut to pay their tuition. The Daily editors have not ponied up any money to build that data center, have not installed a single router, nor answered a single service call, but they feel entitled to its profits because they feel it is wrong for anyone to make so much money while they aren't. That Apple money should be theirs!

Now, that doesn't mean any of them will be signing up for a computer science major and bust their ass learning linear algebra nor programming Java way into the wee hours. That's too hard. They prefer the easier liberal arts majors that rigorously prepare them to be baristas, waitresses, and cashiers. Still, they think they should be given a piece of that computer science money because it's money and they want it.

That is the heart of liberal madness: Everyone's Money Should Be OURS! In their heart of hearts, liberals think like thieves.

Connor Bryant

I agree their math may have been fuzzy, but I think we're missing a bigger issue here.

If the conservative view is "that you own the wealth you create with your own hands and brain, not the government" are my taxes optional? Are Republican taxes less theft than Democrat taxes? Is it not the same claim to the product of my labor? Perhaps this is "conservative greed", acting like a plantation owner, entitled to my economic output?

Fifty data center jobs in Des Moines are a poor justification for forcibly redistributing money from the rest of the state.

Steve Gregg

Connor, do you disagree that you own the wealth you create? If so, you are advocating that Americans are not citizens, but slaves. If you support democracy, then you support government as a voluntary contract with the citizens. If you reject democracy, then you are advocating government as an involuntary imposition on its subjects.

Taxes are necessary to run a government but are controlled by elected representatives. The government does not have first claim on everything you earn. It's ridiculous to claim you are being greedy by wanting to keep what you earn. That attitude is why the greedy Democrats lost to Trump.

The data center is not forcibly redistributing money from the rest of Iowa. That's liberal clown thinking. The data center brings money to the state. After all, the state is not building the data center. Apple is. It brings out of state money to Iowa to do so. Much of that money is taxable now and more of it will be taxable later. That is a win-win for Apple and Iowa.

And, really, Iowa loses no money by enticing Apple into the state with some tax breaks. Iowa earns nothing from a data center never built. Economically illiterate liberals would rather earn nothing than give out a tax break. That's why you should never allow liberals to run anything. They are job killers.

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