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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.

Budget 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."

ALSO:

California's broken budgeting process

California budget: Sticking it to the GOP

Make state government more efficient, less expensive

Got taxes? Let communities collect revenue that California won't

-- 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

 

Comments () | Archives (5)

The comments to this entry are closed.

Turnaround

Stop the multi-billion dollar gifts of our tax money to the robber baron oil companies -- today!

We pay enough at the pump. We don't need to give them a chunk of our paychecks too!

bozak

http://ibozak.wordpress.com/2011/05/18/anti-american-deviant-thieves-list/

Mitchell Young

Sure, sure, the oil companies are Evil, what with their being founded and still run WASPs and employing a lot of sweaty, working class whites just a generation away from the double-wide.

Then again, even 'progressive' companies whose fresh-face, multi-cultural workforces favors skinny jeans, black rimmed classes and miniature fedoras seem to want to avoid taxes. Google, for example, engages in activities that sound like they might have been popular in the swinging 70s (the 'Dutch Sandwich', the 'Double Irish') but are in fact tax dodges.

http://www.bloomberg.com/news/2010-10-21/google-2-4-rate-shows-how-60-billion-u-s-revenue-lost-to-tax-loopholes.html

And, in deference to Santa Anna's law, there is also the massive fact of massive immigration. I suspect a lot of the 'tickle down' is now going to housekeepers, gardeners, handymen etc. that are of dubious immigration status and that get paid under the table. Considerably more so than 20-30 years ago.

lois eisenberg

The oil company's have the Republicans in their back pocket, and continue to
grease their already greasy hands.

Simpson Conner

The Secretary of Energy lied to Congress.

It's up to us to set the record straight!
Let Congress know we need them to help stop the misinformation coming out of DOE in order to protect special interest friends of the DOE staff. Stop the privatization of our government by nuclear and oil friends (Who hate hydrogen and fuel cells because they compete with them) of the staff. GAO investigations have already proven DOE favoritism in published reports. We need new leadership at DOE!

This week, DOE Secretary Steven Chu appeared in front of the Senate Energy and Water Development Subcommittee to face questions about the President's FY2012 energy budget. The first question out of the gate from Committee Chair Diane Feinstein, who pre-arranged the question/response with Chu, was about Sec. Chu's "current view on hydrogen technology and whether it can be successful or not."

Sec. Chu gave incorrect information on hydrogen that contradicts real world data as well as numerous DOE studies and reports. He claimed that hydrogen obtained from natural gas had "no benefit" in terms of carbon elimination. Yet, DOE-funded research has shown that the most clean and efficient use of natural gas for transportation is to use it to create hydrogen to power a fuel cell electric vehicle. Chu also said hydrogen storage was a problem due to high pressure. What's the problem Sec. Chu? These tanks have logged nearly 3 million miles, had more than 27,000 fill ups, and managed to fuel vehicles for more than 114,000 hours of operation.

We need you to tell Congress that the DOE should stop giving misleading information - it is up to DOE to fairly represent the current state of the technology. Right now, they aren't doing that. We need critical decisions on our energy future made based on fact!

The time is now to redouble our efforts to ensure that fuel cells and hydrogen energy are included in any clean energy strategy.

We need Congress to know that the head of the Energy Department is not giving the White House and the rest of the country the facts on how robust fuel cell and hydrogen technologies have become. We are asking for fairness. The DOE owes the President and the country that much.

Thank you for your continued commitment to our campaign.

Sincerely,

Fuel Cell and Hydrogen Energy Association


American Clean Energy Association


National Green Power Campaign


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