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Why Apple Can Blackmail Arizona

BEGIN TRANSCRIPT

RUSH: Jim in Gilbert, Arizona.  Great to have you.  I'm glad you waited, sir.  Welcome to the Rush Limbaugh program.  Hi.

CALLER:  Hi, Rush.  Nice to talk to you.

RUSH:  Thank you, sir.

CALLER:  I just wanted to bring up the hypocrisy about Apple.  I live in Gilbert.  I'm in one of the districts that Apple got benefits from as far as tax breaks, and that's the reason they're coming to Arizona, and now they're talking about... You know, the left talks about the politics of the rich and how they don't pay their fair share, et cetera, et cetera.  Apple got up to 75 and 80% tax breaks from the surrounding municipalities -- the cities, the school districts -- to create a foreign trade zone in Mesa so they didn't have to pay these taxes.

RUSH:  Well, actually, I understand. That's not really uncommon, and I find it... Take Apple out of this equation for a second and just look at what is necessary to attract business.  Look at what's necessary to get people hired.  Look what works: Lower taxes. You know, forget it's Apple for a minute. Forget this issue you got going out there.  Forget all that and let's look at the economics. 

You lower people's taxes, you make it more probable so that profit will be earned, and they'll come in there and they'll hire 2,000 people, and they are still gonna be paying a lot of tax.  They are still gonna be supporting a lot of infrastructure.  The current level of taxation was too high, and it was unattractive.  In order for this to be attractive to a company to come in, they had to make some adjustments.  It's not unusual. 

It ought to be a lesson learned, and it ought to be something that just naturally happens.  Tax rates ought to be lowered across the board.  That is how you compete and attract businesses.  It is how you expand the tax base, and it's how you actually increase the amount of revenue that you get as a locality, as a community.  It works every time it's tried.  It's called the supply-side, trickle-down theory -- and it works. 

Now, as to the specifics, what old Jim here is saying is, "Hey, it's a little hypocritical, 'cause Apple said they weren't gonna go there unless they got the tax breaks, and then they got the tax breaks, and now they're there, and now they're claiming that they're gonna leave if..." I don't know if they're doing that, but they're expressing their dissatisfaction with the governor and what she might or might not do with this bill. 

You know, old Jim here is thinking, "Hey, wait a minute! You know, who are you?  You guys come in and you get 75% tax break and then you threaten us if we don't do something you politically demand and so forth?"  Well, I think governments bring all this on themselves. They make themselves blackmail-able.  If the level of taxation were normally what it was to attract Apple, if that's what it was in the first place, Apple might have still come in and demanded favorable treatment.

But the tax level is so high that it's keeping businesses out, and one of the ways that  a locality could limit its blackmail profile is to simply lower these regulations and tax rates. Get it to some sense of normalcy and then it's, "Katie, bar the door."  To me, it's standard common sense.  But these leftists, it's like in the private sector. You've heard the old saw about competition or other market circumstances that exist in the airline industry.

They will cut fares in order to increase passengers.  But the New York subway system, if they experience a decrease in ridership, will raise subway fares to try to make up the loss.  It's just cockamamie backwards.  But this is part and parcel of the left, and how they are.  Now, I think that part and parcel here of Apple's deal... In fact, "Arizona lawmakers are proposing another new tax break for Apple Inc. and its manufacturing plant in Mesa.

"All told, Apple could receive tens of millions of dollars in state breaks and other incentives if the latest and other tax measures are approved by the Arizona Legislature. The latest proposal offers a $5 million state income tax credit for a manufacturing plant fueled by an adjacent renewable energy source." 

So, look at what is required in order to attract a business.  Now, you could say, "Okay, the business, Rush, they're blackmailing the locality, 'cause they can go anywhere they want," and, true. But I'm saying that if it level of taxation were not punitive and outrageous everywhere, then this kind of thing would be less effective. 

END TRANSCRIPT

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