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Tax cut strategies lead to massive income inequality

As two of our county commissioners prepare to make another fact free policy decision and award property tax abatement to a foreign corporation it should be noted that income inequality has grown astronomically as a result of tax cuts. David Cay Johnston reports the 74 people in the US making more than $50M a year saw their wages increase from $91.2 million in 2008 to $518.8 million in 2009.

…We have created a tax system that changes continually as politicians manipulate it to extract campaign donations. We have enabled ‘‘free trade’’ that is nothing of the sort, but rather tax-subsidized mechanisms that encourage American manufacturers to close their domestic factories, fire workers, and then use cheap labor in China for products they send right back to the United States. This has created enormous downward pressure on wages, and not just for factory workers.

Meanwhile, the rest of us have seen our paychecks dwindle to about $500 per week compared to the $10M per week of the top 74 wage earners in the US.

Despite admitting they have no idea how the improvements will be valuated by the Oregon Dept of Revenue, two of our commissioners, Nikki Whitty and Kevin Stufflebean (Mr Uncredible), believe granting favors to ORC, at taxpayer expense is a good idea.

What is in it for the taxpayer? Not jobs, Dan Smith already publicly bragged they pay higher wages because the Operating Engineers Union requires it. It isn’t to draw ORC here, they have to be here for the ore. It isn’t the $60,000 annual payment Nikki negotiated because that doesn’t even cover the full cost of operating a new deputy AND they admit they really have no idea how much they are giving up in annual tax. Further, we have no idea if ORC will be in business long enough to ever pay taxes.

So why are two of our county commissioners giving favors to a foreign strip mining company?

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Avatar of magix Posted by on October 25, 2010. Filed under Coos County,Local,National,Oregon. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

3 Responses to Tax cut strategies lead to massive income inequality

  1. Avatar of den

    den Reply

    October 26, 2010 at 10:25 pm

    North Bend City council did a work session on the topic, and then in the regular meeting just passed it without discussion.

    Coos Bay in their regular meeting had a discussion, but no public comment.

    The Port, when on their agenda, had a question, and held off for a Friday phone hookup decision where they approved it.

    So where is the public comment? All this goes so fast. There was no notification of the meeting when Nikki represented the citizens of the County and cut a deal. There was a notice somewhere?

    Most people do not know that Gene Melton is on the Board of the Enterprise Zone that is brokering the deal for ORC, even-though they say they are not their agent. And Gene sits on the CB Council and votes to accept.

    Since the Cites sold out their citizens, the word is out. Where is our voice. A public hearing was requested to be held by the County, after the fact of the other 3 groups made their decisions. It did not happen at the first meeting of the County Commissioners, you know the one where one of the Commissioners just did not understand the concept, and had to be educated. Now, a political Move? they are going to hold a public hearing.

    Do you think there may be someone there who receives services from the taxing districts that ORC will pay taxes to, to say I would rather receive the service from the Library or from SWOCC, or the schools, instead of letting ORC stock holders benefit from a tax break at the expense of the citizens of the County, that includes the Cities in the County that are involved in the Enterprise Zone.

    Our Representative are allowed to make too many decisions that effect its citizens without public comment. I realize public input cuts into their spending plans.

  2. Avatar of magix

    magix Reply

    October 26, 2010 at 9:20 pm

    Alas, fred, many people concerned about this issue do not read every agenda item of every council or commission. For better or worse, the BOC are the final arbiters in this debate and therefore, the heat is on them.

    Generally speaking I am opposed to the enterprise zones entirely. Multiple studies indicate enterprise zones fail to meet the stated goals, period. They do not work.

    Johnston’s latest articles, both of which are linked on this blog, provide statistical analysis that tax cuts don’t stimulate the economy. The Bush tax cuts failed every single stated goal.

    Tax cuts have widened income disparity to the benefit of a very few and the detriment of millions and the economy as a whole.

    As regards ORC, if their business plan is so thin as to fail to provide for the potential to pay property taxes then something is wrong with their model. Further, if their model is this shaky what guarantee is there they will still be in business when the abatement ends? Why can’t ORC manage its business without taxpayer assistance? Nikki and Kevin are promoting socialism for an Australian owned company.

    Finally, why should the taxpayer share in the risk of their business when they will not partake in the profits? Why should the taxpayer have to pay for jobs?

  3. Avatar of fredkirby

    fredkirby Reply

    October 26, 2010 at 7:28 pm

    Why me LORD? I know there are folks out there reading this stuff. We certainly don’t all agree – frankly I doubt that most folks reading these pages and I would agree on much – why your silence. Maybe your lumbego has flared up and you can’t type this week.

    I read David Cay Johnsons’ book, and his other great books, including his writing about the IRS – an organization that should be abolished. It’s been a while, but I recall that he wrote two chapters on Bandon Dunes and the tax breaks that they received from the Coos County commissioners (including Whitty – it was pre Stufflebean) – although they did not request same – they did not need same – they would have employed as many folks – and they are a nmost profitable private venture. Maybe Ms. Whitty can explain why in terms that we all can understand why the relief to the Dunes and why it’s a good idea to give away to ORC.

    Second, ORC is not a foreign company. They are a US company. However, they are owned completely by an Australian company. And neither has much operating capital. Tax relief would do only one good thing – help to assure us that in two years time, ORC will still be here searching for and extracting minerals and contributing to the local economy.

    ORC is here for the minerals. They must believe that their serach will be a most profitable venture or they would not be here. To date they have bettered our unskilled county negotiators and have a sweetheart royalty deal going. They did not request tax relief before they arrived. They will be here doing the same function regardless if they receive tax breaks or not.

    What I don’t understand is why the pressure on Whitty and Stufflebean – other than they are the last hope to stop the tax giveaway. The port voted yes, Coss Bay city voted yes, North Bend city voted yes. Where was the protest before or during that vote. If any, The World paper who enjoy covering such matters, and generally not very well, has been silent.

    OK, why should we oppose tax relief?

    Semper Fi

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