Most of us know that Apple, like many global corporations, has a ton of profits that it has parked overseas to avoid paying U.S. taxes. But we might not have been aware that Apple takes mountains of this cash and plows it back into U.S. Treasury bonds — collecting interest from the U.S. government on the money that it has stockpiled far away from the tax collectors, under a 1962 IRS loophole. That interest totals “at least $600 million and possibly much more” over the last five years, according to a Bloomberg investigation.
Bloomberg dug deep into Apple’s regulatory filings to trace this financial shell game. Apple, of course, is hardly the only player, and there is nothing illegal or even that unusual about the investment. The lesson, as Bloomberg puts it, is in the sheer opacity of global operations today: “The purchases reflect how the distinction between what’s foreign and what’s not for multinationals often exists only in the world of accounting.”
Incoming president Donald Trump has said he wants companies to repatriate the money they’ve kept overseas. But Trump has his own shell game going — he has constructed a maze of LLCs that mask and obscure the chain of ownership of his properties (The Wall Street Journal). This species of financial complexity creates lots of work for lawyers and accountants, and sometimes it cuts tax bills. But it promotes neither transparency nor trust. Eventually it will underwrite resentment, backlash, and tighter regulation.
Putting Some Flesh on the Universal Basic Income
There’s tons of talk right now about the idea of a universal basic income, but precious little detailed research. Now a new coalition called the Economic Security Project, made up of social and technology entrepreneurs, scholars, and artists, is putting $10 million behind efforts to study the feasibility, potential benefits, and possible downsides to implementing a universal income in the U.S.
The project’s first grantees — the Center for Popular Democracy, the Roosevelt Institute, the Niskanen Center, Alaska Group American Center, the Chesapeake Climate Action Network, and GiveDirectly — will conduct studies of basic-income policies’ impact on individuals and the broader economy, and explore ideas like carbon pricing and dividends at the city level. The project is non-partisan, but the list of signatories to its launch statement is heavily weighted toward progressives and Democrats. (Disclosure: The signers include NewCo founder and editor John Battelle.)
The group hasn’t posted its sources of funding, but it’s a fair bet that many backers are among the 100 names listed on the site as “founding signatories. “Financial security should be a human right and cash is an underutilized tool,” Facebook co-founder Chris Hughes told Quartz. If we want to see some real-world experiments with universal basic income, we’re going to need to gather a lot more data. No time to start like now.
Portland Puts a Tax on (Extreme) Pay Inequality
Portland’s city council passed an inequality tax this week (The New York Times). If your company’s CEO earns more than 100 times the median pay for all employees, the firm will get hit with a 10 percent surcharge on the city’s business tax. If the CEO multiple is 250 times or more, the surcharge jumps to 25 percent. The fees are likely to net the city $2–3 million in revenue.
On the one hand, it’s hard to imagine these amounts making a huge difference in corporate behavior. On the other, it’s a sign that cities are going to step in and adopt policies to try to remedy inequality if states and Washington D.C. don’t.
The Portland law relies on data from a Dodd-Frank rule that requires public companies to publish their CEO-to-median-salary ratios beginning next year. Since the Republican Congress has made repealing Dodd-Frank a goal, only time will tell whether Portland’s plan ever gets a chance to kick in — and for how long.
Uber Has Rules for Riders, Too
Uber drivers know what the company expects of them: clean cars, promptness, politeness, and so on. Now Uber riders have a set of expectations, too (TechCrunch). As part of a revision to the ride-hailing service’s Community Guidelines, Uber has listed dos and don’ts for riders: Don’t damage the car. Respect others’ personal space. Don’t spill stuff. Don’t smoke. Don’t throw up.
A lot of these exhortations seem like common sense. But until now Uber hasn’t spelled them out. It’s good that the company is now making clear that courtesy is a two-way street, and that paying a fare doesn’t give you the right to abuse a driver. On Uber’s platform, riders rate drivers, but drivers rate riders, too. Now, at least, riders can have a clearer sense of what they’re being rated on.
Enough with the “Fake News is Hard” BS
The journalism business has centuries of experience at distinguishing fake news from fact. Instead of complaining that the task is too hard, Facebook and other information platforms should learn from that experience, writes Rick Webb (NewCo Shift). No one will expect Facebook or any other service to achieve perfection, but we have a right to ask them to do much better.