Mac, iPhone, and iPad user Rush Limbaugh today discussed taxes, Apple Inc., Steve Jobs, and the New York Times, among other things, on his radio program that, since its inception on August 1, 1988, is the highest-rated talk radio show in the United States. The 3-hour Rush Limbaugh Show airs daily on a network of approximately 590 AM and FM affiliate stations. The program is also broadcast worldwide on the U.S. Armed Forces Radio Network. A November 2008 poll by Zogby International found that Rush Limbaugh was the most trusted news personality in the nation.
From the live transcript, Limbaugh said in part:
On Saturday there was a long, long story in the New York Times about Apple and its taxes and how Apple is avoiding paying taxes and how mean that is to the country. Now, let me set this up. I know many of you are not fans of Apple because you consider them to be a bunch of left-wingers and so forth. And I know that many of you get a little disturbed when I talk about my Apple stuff, that I like it, and I share it with you. I’m big on sharing my passions. But this is a teachable moment. It is a teachable moment about media. It’s a teachable moment about taxes. And it’s a teachable moment about young people who make up many of the bloggers on a lot of the tech sites that write about Apple and the other high-tech companies and gizmos and products and so forth.
After reading the story, one — and maybe it was more — but one young — I’m sure young — blogger on a tech site expressed sadness and disappointment over the lack of patriotism shown by Apple in doing what it could to avoid paying taxes. Apple did nothing illegal. There’s no law that they broke. This is the key point. There’s another thing in this story. The New York Times used a really fringe think tank called the Greenlining Institute as their source for financial data. And what this group did, they compared Apple’s taxes paid in a year previous to the year’s income they were using to compare. I think it’s an omission of ignorance. I don’t think it was done purposely.
For example, when you file your taxes for April 15th, you’re paying your taxes on your income of the previous year. So what these guys did in this story is report Apple’s income last fiscal year, and then they used the taxes they paid in the year prior. Well, Apple’s profits have been growing like crazy, so the percentage of taxes paid by Apple is, according to the erroneous way in which they reported, is much lower than what was actually paid… I will read you some of the highlights because it’s a teachable moment. It’s a teachable moment about capitalism. It’s a teachable moment about economic growth, corporate growth, competition, employment. It’s a teachable moment about taxes. And it’s also a teachable moment about what is very predictable, and that is how the youth, young people, these bloggers have been conditioned to look at this.
And the New York Times is now targeting Apple. I remember when the first iPad hit, Steve Jobs (in every print ad that featured the iPad) had the New York Times on the display. When they were demonstrating the Web browser of the iPad, the website they always used was the New York Times. There was a symbiotic relationship. Steve Jobs had said publicly that it was his goal to teach the New York Times how to thrive in the digital arena, outside of the “dead tree,” actual publication arena. But something’s happened. Apple’s gotten too big; it’s gotten too successful. Something happened, and now the New York Times is out for them. This is the third or fourth hit piece on Apple.
There’s a great example. I’ll give you a great anecdote. A couple three months, maybe, before he passed away, Steve Jobs goes to the Cupertino City Council in Cupertino, California, where they are attempting to get permission (Apple is) to build a giant new headquarters. According to the artist’s renderings, it looks like a giant circular spaceship with solar panels all over the top of the thing and a giant courtyard in the middle. They’ve got all the environmental stuff as part of the presentation. It’s supposed to be state-of-the-art, and it’s huge. It is huge. And Jobs himself goes to the city council to get permission to present the plans, to talk it up.
And of course Apple wants some favorable tax treatment as they’re doing this. And one of the anecdotes in the story is, a city councilwoman in Cupertino says (paraphrased), “Well, Mr. Jobs, if we do this, what can you give back? Perhaps you could offer free Wi-Fi for all of Cupertino.” And Jobs’ response was, “You know, I guess I’m a little stupid or old-fashioned. The way I thought this worked was, we pay our taxes and you do that. Now, if that’s not the way it works, we don’t have to build our headquarters in Cupertino; we can just move.” And, of course, the city councilwoman withdrew her idea.
She’s no longer on the city council, according to the story, and Apple is moving ahead with their plans. But what’s missing from this story? I’ll just tell you: It’s all about how… And Apple’s not the only one that’s cited for not paying its “fair share,” although they’re not breaking any law… So The Times is just beside itself, and the people who write the story make it clear that Apple is not being patriotic. Apple is not paying its fair share even though it’s not breaking the law. It goes on to describe the education deficits in California and the state budget deficits in California and the federal budget deficit and how Apple’s not paying it’s fair share. There’s a guy runs a community college near Cupertino, and this guy’s quotes are amazing [see full transcript].
I’m not gonna try to remember them. I want to read them directly to you so I’ll find them after the break and perhaps get into the story. But this guy is just unbelievable. No, I take it back! He’s totally believable, given that he’s a product of the news media his whole life. But he’s just beside himself. His school’s budget deficit is Apple’s fault. The California state budget deficit is Apple’s fault. Not one word in this story — and I know it’s a story on corporate taxation. I understand fully. But, folks, it’s a hit piece, and there’s not one word in this story about how any of these taxing authorities spend money irresponsibly.
There’s not one word! Why is California running a huge budget deficit? Why is their education system in debt? It’s not Apple’s fault. It’s the people that run the state government’s fault, from the governor on down to the legislature, the assembly. That’s not touched on in this story. It’s an attack on successful capitalist companies who are not breaking the law and who are paying as little as they can, just like Warren Buffett.
But, you see, Warren Buffett gets away with it because while he’s owing a billion dollars in back taxes and fighting it in private, publicly he’s out talking about how he doesn’t pay enough in taxes and it’s unfair that the secretary pays a higher rate than he does. So he inoculates himself from any of this kind of criticism. The New York Times will never write a story about Buffett like the one that they’ve written here about Apple… Why is the state of California in trouble? It’s not because Apple’s doing anything. It’s not Apple’s fault. If the state were run like Apple is, everything would be hunky-dory. Apple’s not the guilty party. Microsoft isn’t the guilty party. Cisco’s not the guilty party. The guilty party are the state’s Democrats and whoever else. Republicans, too, if they’re engaged in this wild, irresponsible borrowing and spending. And the same thing at educational institutions. You don’t spend what you don’t have. And then when you do, and you rack up a big deficit, you blame it on yourself if you have any moral fiber. You don’t go blaming it on corporations that are doing their share.
Why does Apple, why do corporations want to spend as little on taxes as possible? I’ll tell you why. They want to be competitive with all the other corporations that are doing the same thing. They want to maximize shareholder value. They want to keep the price of their products low as they can so they can sell them. Everything a successful corporation does is oriented to two things: the stockholders and the customers. That’s who their bosses are. This New York Times piece and all the critics in it think the purpose of a corporation is to provide health care for the employees, free Wi-Fi for the community where the corporation is, and unlimited money for governments to spend irresponsibly. That’s what they think the purpose of a corporation is. And it’s not.
The purpose of a corporation is not to have jobs in the community. It’s not to have health care for people. That’s not why they exist. There isn’t one person that started a business because he thought his community needed jobs or because he thought people in his town needed health care. That’s not why people start businesses. Corporations are people. People work there. Stockholders own shares of stock. Who is it that’s paying these taxes? It’s people. Apple’s employees pay taxes. Apple pays withholding taxes. It’s absurd. I use that word a lot. It’s absurd to believe, as the New York Times wants, to think that corporations don’t pay their fair share.