Golden State Billionaires Hoard Cash

By Seth Sandronsky

It’s the largest. California has the biggest state economy in the US. ($2 trillion in gross domestic output last year, or about 13% of the nation’s GDP).

Yet California state government is cash-strapped.

At least that shortage of state cash is the official narrative. Meanwhile, 90 of the world’s 1,210 billionaires live in California, according to Forbes magazine.

Let us take a look, briefly, at the wealthiest Californian and number five over-all globally. Meet Larry Ellison, head of Oracle Corp., the software giant. He lives in Woodside, and is worth $39.5 billion. Two others from the Golden State on the recent Forbes’ list are search titan Google co-owners Larry Page and Sergey Brin of Palo Alto and San Francisco, respectively. Page and Brin share the 24th spot on the Forbes’ list of world billionaires. Each man has a net worth of $19.8 billion. Their combined $39.6 billion surpasses Ellison’s riches. Facebook founder Mark Zuckerberg, with a net worth of $13.5 billion, trails Ellison, Page and Brin.

Silicon Valley sprouted with US taxpayer dollars through the military-industrial complex (that GOP President Dwight Eisenhower warned of in his White House farewell) to create the Internet.

For California’s quartet of top billionaires, however, the return on this past public investment is private.

In fact, such government intervention has paid off handsomely for the state’s leading billionaires, a foursome of the world’s wealthiest men. Meanwhile, the Golden State’s working majority faces austerity measures now. Like most other US states after the bubble of home prices burst and led to Wall St. credit market meltdowns, California is losing tax revenue.

Less state taxpayer revenue means a decline in state funding for public programs and services.

They range from health and human services to higher education and parks.

To bridge the funding gap, politicians are raising state fees for working-class patients, college and university students and park users.  

In the received wisdom of both political parties in Washington, D.C., now, government spending is harming the economy, and not the lack of jobs and poverty. Instead, the federal budget debt and deficits are Public Enemy Number One. This view accords in part with states such as California. Its constitution does require a balanced budget for revenues and expenditures.

It does not, however, follow from this constitutional fact, that California’s 90 billionaires should remain off the table as new sources of government revenue. So what needs to happen in California?

My policy proposal is simple.

Simply increase corporate tax and personal income tax on the state’s 90 billionaires until incoming state revenue match outgoing expenses.

Call it a payback.

After all, Silicon Valley’s thriving computer industry, thanks to taxpayer dollars, is the bedrock infrastructure upon which rests the top four California billionaires, with a net worth of $92.6 billion that exceeds the state’s 2011 – 2012 general fund budget of $85.9 billion, down 6.1% from the previous year. Such billionaire-friendly policy priorities and public austerity ignore an obvious remedy.

The dynamic to alter a super rich status quo in a progressive way will have to flow from the capacities of ordinary Californians seeing their living standards decline as the state’s ultra rich live large. There’s a word for such a grassroots’ movement. It’s called democracy.

Seth Sandronsky writes in Sacramento. Email

From The Progressive Populist, October 15, 2011

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