Sunday, May 13, 2012

All the News That Fits

What’s Wrong With the New York Times?

Last week’s and today’s New York Times were lacking a feature. What’s wrong with the Times?

The Times on Sunday, April 21 ran a 3 page article on Wal-Mart bribing its way to success in Mexico. 20% of Wal-Mart’s stores are in Mexico. Wal-Mart paid top dollar, apparently adding up perhaps to $24 million, to expedite the permitting of new stores in Mexico.

Investigations, shareholder derivative suits, the re-energizing of Wal-Marts opponents ensued.

The Times on the next Sunday took on Apple because of its ingenious, and legal, use of tax dodges to minimize taxes. Imagine that, a company uses the best tax attorneys to maximize deductions allowed by the complex U.S. Tax Code. One assumes that the New York Times does the same.

The paper was upset because Apple’s tactics cost governments money, continuing the belief that earned money should belong to the government except to the extent that the government lets you keep it. The Times related the story of how Steve Jobs responded to a Cupertino councilwoman, who questioned the amount of taxes Apple was paying in Cupertino, that Apple could always move its headquarters out of the city.

Steve Jobs, as a true American, hated paying taxes. He understood the wise words of Judge Learned Hand: “Anyone may arrange his affairs so that his taxes shall be a slow as possible. He is not bound to choose the pattern which best pays the treasury. There is not even a patriotic duty to increase one’s taxes.”

He added “Nobody owes any public duty to pay more than the law demands.” Amen.

The impression was building that the New York Times was trying to boost circulation through investigative reporting. The Gray Lady might be ushering in a new Muckraker Era.

I looked eagerly to last Sunday, hoping for an expose on Warren Buffett’s hypocrisy when it comes to paying taxes, how he is fighting between $500 million and a billion in back taxes, going back to 2002 to Uncle Sam.

Not a peep from the Times about the real Buffett Rule.

I thought maybe today with the Times’ concerns over successful Silicon Valley companies dodging taxes it might write about Facebook. The Facebook elite have established 8 “grantor-retained annuity trusts,” holding 22 million shares, resulting at current Facebook’s estimated value of $31.50/share in tax savings of $200 million.

And then there’s Eduardo Savarin, one of Facebook’s four founders. He’s the one in The Social Network who was eased out of the company and sued. He still owns about 5% of the company’s stock. Eduardo moved to Singapore in 2009 and in September 2011 renounced his United States citizenship, joining a small but growing number of expatriates who renounce their citizenship to save taxes.

The New York Times had given Warren Buffett and Facebook a pass and also dropped the front page attacks on American success stories.

The paper has attacked Rupert Murdock over the British hacking scandal, seeking his removal. These attacks though may be based on journalistic self-interest. Murdock’s New York Post outsells the New York Times in New York City.

All the news that fits.

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