Make a Comment 0

The income (inequality) wars

Posted in: Economics   Taxes
Tags:



We began this week talking about the Buffett Rule, an attempt to make millionaires pay a tax rate of at least 30 percent. President Obama and Democratic Senate candidate Elizabeth Warren were for it; US Sen. Scott Brown was opposed, calling it a political stunt that would hurt small businesses and make the economy worse.

Brown carried the day in the Senate, where the Buffett rule was blocked on a procedural vote by a margin of 51-45. Brown and his Republican colleagues are probably right that the Buffett Rule will do little to address the deficit, but they may be missing the larger point. The Buffett Rule is less about federal tax policy and more about addressing income inequality. As events the rest of this week showed, Americans are anxious about the concentration of wealth in the hands of a relatively small group.

On Tuesday, 55 percent of the shareholders of Citigroup voted against the compensation packages of the company’s top executives, including the $25 million ($15 million salary and $10 million in retention pay) collected by CEO Vikram Pandit. The vote was nonbinding, but it was a powerful statement. US Rep. Barney Frank, who inserted the “say-on-pay” provision into a financial overhaul law, said he thinks the Citigroup vote is an indicator that shareholders have had enough of lavish salaries. “I feel very proud of it, frankly,” he tells the Herald.

Pandit’s take pales in comparison to what Liberty Mutual honcho Ted Kelly is getting paid. The Globe’s Todd Wallack, digging into state insurance filings, reported that Kelly made about $8.5 million a year in salary from 2008 to 2010 plus $40.8 million a year in “all other compensation.” Then Wallack bought a share of Liberty Mutual stock, went to the company’s annual meeting, and asked how much Kelly made in 2011. Answer: $50 million again.

Globe columnist Brian McGrory weighed in with a series of columns that captured the disgust many people feel about such high salaries. He gave Kelly credit for running Liberty Mutual well and being a good corporate citizen, but he said his compensation package was ridiculous. “It’s nothing short of obscene, more evidence of an unparalleled age of greed,” McGrory wrote, before going on to write more columns about Liberty’s five luxury jets at Hanscom Field and the way executives sit on the boards of each other’s companies and award themselves raises.

The Globe’s editorial page prodded Insurance Commissioner Joe Murphy to intervene on behalf of Liberty’s policyholders, but Murphy was reluctant. “It’s not our role to tell companies how to run their business,” he said.

Fittingly, the week ended with House Republicans in Washington approving a $46 billion tax cut targeted at small businesses. House Majority Leader Eric Cantor said the measure could create 100,000 jobs, while Democrats said the bill would be a windfall for “small business owners” such as Donald Trump and Oprah Winfrey.

                                                                                                                                            --BRUCE MOHL

BEACON HILL

An EBT fraud raid in Chinatown ratchets up the issue a few more notches.

A film tax credit scammer gets two years in prison and is ordered to pay back $4.4 million to the state. His lawyer tells CommonWealth that part of the problem was his client made “nice movies” that didn’t do well at the box office. The Cape Cod Times report is here.

MUNICIPAL MATTERS

Lowell is planning an auction of municipal tax liens, which would allow the city to collect the back taxes and the successful bidders to pocket the 16 percent interest on that money, the Lowell Sun reports.

Lenox goes to war over sandwich board signs.

NATIONAL POLITICS/WASHINGTON

Sen. Marco Rubio lines up behind the Dream Act.

The National Review calls John Edwards “loathsome,” “corrupt” and “a preening, moralizing fraud” but says he should not be prosecuted for campaign finance violations. He must be grateful for that support.

Bill Cosby talks about guns and the Trayvon Martin case and The MetroWest Daily News
agrees that guns are at the root of the issue. A Christian Science Monitor article explores whether the case will be a turning point.

ELECTION 2012

Republicans see politics at play in President Obama’s plan to lower student loan interest rates.

Rick Perry doesn’t see Mitt Romney winning in November.

BUSINESS/ECONOMY

The Hill Holliday advertising firm, which has been caught up in the corruption case against former state treasurer Tim Cahill, says it will no longer vie to handle advertising for the state lottery, an account it has held for decades.

A federal judge issued an injunction against a Quincy ordinance that mandates companies winning bids for city jobs must hire Quincy residents for 33 percent of their jobs.

Is the economy about to fall on its face for the third spring in a row?

MIT will build a $450 million research facility at Hanscom Air Base in Bedford.

EDUCATION

The University of Massachusetts board of trustees selected Divina Grossman, vice president for engagement at Florida International University, the new chancellor for UMass Dartmouth.

A priest has resigned from the Boston College board of trustees following questions about his role in supervising a former Jesuit priest alleged to have molested dozens of children.

Time examines the online petition to erase student debt, which now has 670,000 signatures.

TRANSPORTATION

The Cape Cod Times argues that the state needs to figure out what to do about the aging Sagamore and Bourne bridges.

ENERGY/ENVIRONMENT

A man called 911 in Brockton because of high gas prices.

The Environmental Protection Agency has ordered AVX Corporation to take over the cleanup of New Bedford Harbor and complete it within eight years, a dramatic acceleration of the previous 30-year timeframe.

Eleven Kingston families are seeking a cease and desist order to shut down four new wind turbines in the town because of sound pressure, shadow flicker, and potential for ice throw.

CRIMINAL JUSTICE

The Lawrence Police Department’s director of facilities and communications appears before an Essex County grand jury investigating the administration of Mayor William Lantigua, the Eagle-Tribune reports.

A 25-year-old Brockton man allegedly broke into a bar and stole the register then, when he couldn’t open it, tossed it off the roof to get it to open. It did, but it was empty, and he was arrested and placed in a cell that opens with a key.

A Lynn man who hosted an out-of-control birthday party that led to a fatal drunken-driving accident won’t have to serve any time in jail, the Salem News reports. The mother of a Salem resident who was killed in the accident asked the judge not to send the man to jail, the Lynn Item reports. “She realizes they were kids and made mistakes,” an assistant DA tells the judge.

A student at Fitchburg State University discovers a video camera that his roommate was using to secretly videotape him wearing no clothes, the Lowell Sun reports.

Bay State law enforcement and legal officials consider the impact of a recent Supreme Court ruling upholding laws allowing strip searches of visitors to prisons.

Ohio State University law professor Michelle Alexander tells The Bay State Banner that mass incarceration is the new caste system.

SPORTS

Have you heard Fenway Park is celebrating its 100th anniversary today? Yeah, they’ve tried to be low-key about it.

0 Article Comments
There are currently no comments.
Would you like to comment? You must Login or Create an Account to leave a comment.
Back to top

Login

Forgot Password?

 

* = Required
*
Username Required
*
Password Required

Create an Account Here!

Create an account with us to comment on stories and blog posts. Your account information will not be shared with third parties.

* = Required
*
First Name Required
*
Last Name Required
*
Screen Name Required
*
Email Required
*
Password Required
*
Confirm Password Required
*