We all feel it when gas prices spike. It's a pattern every four years that coincides with elections. Israel threatens to strike Iran, Iran threatens to block oil shipments and presidential candidates spew inflammatory rhetoric.
Suddenly, oil companies see a windfall opportunity with prices spiking — a dollar per-gallon in the last month alone.
What is different this time is that as a result of our economy, a lot of people have lost their jobs, and those who still have a job haven't seen a raise in years. In fact, they've most likely endured pay cuts. So when oil prices spike this time, it's the middle- and low-income Americans who get fleeced yet again, and it hurts. It comes at the expense of other household expenses.
Keep your eye out as the oil companies announce record earnings in the billions of dollars in the next several quarters. Remember that on election day, because that is your money. Also remember that these companies are probably paying very little in taxes, much like Mitt Romney only paid 15% last year, while regular families paid more than twice that amount. Keep this in mind as you file your income taxes in April. It's a clear signs we need a major overhaul of our taxation system.
But I guess we're not getting fleeced enough. On the ballot in November, you could see several initiatives that will be proposing tax increases, including one being pushed by Gov. Jerry Brown. While some may be tempted to support such initiatives, I urge caution. Brown's initiative would increase state income taxes for those making $250,000 or more and increase the sales tax. A second initiative would tax millionaires. A third initiative would increase taxes for everyone.
We should be wary of any tax increase initiatives. People I know work hard for their money and I see the pain and strain this economy is causing, with families struggling to make ends meet. I don't see the same pain and strain being felt in state government. I hear the talk about it, but I'm not convinced our elected representatives have tried hard enough in Sacramento.
There isn't adequate financial accountability on a central level, whether we look at the state or federal government. In fact, what they have succeeded in doing is making more pain felt in cities. They have reduced funding coming back to our cities, the one place where we are more likely to see tangible benefits because we have some level of control on how the money is spent.
What reason have they given us to believe them when they say, “Trust me, give us your money, and we'll send it back to you with all these benefits”?
Brown's initiative is being bankrolled by corporate and Indian gaming interests, something they often do to either pay back favors to the governor's office or to gain support for another issue of interest to them.
Molly Munger, the daughter of billionaire Warren Buffet's partner Charles Munger, is bankrolling her own initiative, trying to tax you and me while she sits on a mountain of cash at home. They should all know that we, the voters, are not giving up any more cash into central coffers. They're just going to have to get more innovative on how they devise a central budget.
The sponsors of these initiatives should also realize at this point that our “extra” money they would like to get their hands on just got taken by the oil companies. Maybe state officials should go meet with the chief executives of ConocoPhillips, ExxonMobil, Shell, Valero and others to ask for donations.
The governor could tell them we'll give them a tax deduction for their generous donations. But wait, lest we forget, they don't pay taxes anyway.
ZANKU ARMENIAN is a Glendale resident and a corporate communications professional. He can be reached at email@example.com.