Economy: Spreading the wealth, or not
To quote famed philosopher Mel Brooks, "It's good to be king."
Except, we don't have kings in the United States. No, in America, "It's good to be rich."
How good? Well, check out The Times this week for some examples.
Let's start with the uber rich -- oil companies -- and work our way down.
In "Senate Republicans block action on oil tax breaks," The Times' Richard Simon shows that when it comes to big money, Big Oil takes a back seat to nobody.
Senate Republicans on Tuesday blocked a Democratic effort to scale back oil industry tax breaks, underscoring the difficulty of getting Congress to agree to any significant measures aimed at bringing down gas prices.
All but two Republicans -- along with three Democrats -- voted against bringing the repeal measure up for debate, even though the $2 billion a year in additional tax revenue from five major oil companies would have been steered into reducing the federal budget deficit, a Republican priority…
The oil and gas industries receive $16 billion a year in federal subsidies, according to the watchdog Taxpayers for Common Sense. The bill targeted about $2 billion a year in tax breaks to Exxon Mobil, Chevron, Shell, ConocoPhillips and BP.
And how, you wonder, can we afford such tax breaks to companies making record profits, and as gasoline prices remain above $4 a gallon?
Well, here's where the rich show how they're different from you and me. We buy gas; they buy senators:
Republicans contend that the tax breaks are necessary to encourage domestic production. The repeal effort also was opposed by the oil and gas industries, which contributed more than $21 million to House and Senate candidates -- about three-fourths of which went to Republicans -- in the last election cycle, according to the nonpartisan Center for Responsive Politics.
Yes, oil companies need to be "encouraged" with tax breaks to search for a product that they then turn around and sell at great profit. It may be just me, but I'm not sure how much more of this "encouragement" we can afford.
Of course, there's a flip side to taxes. Take California.
Remember the recession? Remember all the unemployment?
Well, you may be worse off, but it seems the rich in California are getting richer, at least if tax revenues are any indication.
In "Brown releases revised budget plan with $6.6 billion windfall" and in a news analysis, "California’s revenue surge might stymie efforts to stabilize finances," The Times finds that there's still gold in the Golden State.
State finance officials attribute the revenue windfall -- achieved despite the state's high unemployment and stagnant wages -- to a sharp increase in earnings of the wealthy, who pay tax rates much higher than those of average earners. California's financial health has long been tied to the fortunes of high earners.
"It looks like the upper-income taxpayers are having a greater gain in their income than previously anticipated," said Brown's budget director, Ana Matosantos. Soaring investment profits played a role; capital gains tax collections are on track to rise 60% for 2010 and 45% for this year, according to the governor's budget.
Now, it wouldn't be fair to bash people who are paying their fair share, and more, of taxes. You could ask, though, why they're not out creating jobs, as the trickle-down economic theory predicts. But then again, it looks like they may be: They're creating jobs for stockbrokers!
And speaking of taxpayers, there's that public servant, Samuel Downing. In "Public hospital official got nearly $1 million in severance on top of $3.9-million retirement payout," The Times reported:
A Salinas public hospital district, already under fire for granting its outgoing chief executive $3.9 million in retirement payments, also doled out nearly $1 million to the executive as part of an unusual severance agreement, according to records obtained by The Times.
The Salinas Valley Memorial Healthcare District board gave its CEO, Samuel Downing, a cash payment of $947,594 in 2008, according to a hospital report on his compensation. …
Downing retired last month, taking with him that payment, a series of other supplemental retirement benefits totaling $3.9 million and a regular pension of $150,000 a year. He earned about $670,000 in base salary during his final years of employment, along with other benefits such as a car allowance and paid time off.
And what did Downing say?
In an interview Monday, Downing said he felt he deserved the pay after a long and successful career at the hospital, where he started in 1972.
"It sounds like a lot of money to everybody ... but I know what the industry is and I know the board did an independent study," he said. "The board did an excellent job. They made sure we had competitive salaries."
In other words, "It's good to be rich."
-- Paul Whitefield
Photo: Gov. Jerry Brown points to a chart as he introduces his revised 2011-2012 fiscal year budget proposal at the State Capitol in Sacramento on Monday. Credit: Ken James / Bloomberg