For those of you not in the Greater Philadelphia Area, you might not be clued into Sunoco’s plan to sell or close their refinery facility in Marcus Hook, PA. Energy policy discussions aside, over 600 workers could lose their jobs. The local newspaper, the Delco Times, had a rather callous editorial on the subject.
Gil Spencer's editorial
Below is the copy of the letter I emailed to the Delco Times today.
I'd love to hear what you all think about my letter or the topic itself, but please realize that my data isn't cited because the newspaper does not publish citations along with letters.
For those of you scoring at home, I used the data from the New York Times budget game for my projections on tax revenue.
As Gil Spencer rather bluntly pointed out, the CEO of Sunoco is beholden to shareholders and a bottom line when making business decisions. While one cannot play amateur accountant to determine the honesty of Sunoco’s decision to abandon the Marcus Hook refinery, it is easy to see that our nation is nowhere near its end of massive energy consumption. In the event that a new owner for the refinery is not found, Governor Corbett, the PA Legislature, and the Delaware County Council would be wise to incentivize continued energy generation at that location. A depot for storage, sale, and distribution of the state’s natural gas supply would provide good paying jobs for the potentially displaced workers. A conversion of the acreage to a wind or solar farm would also have merit from both an energy generation and economic impact standpoint.
On a secondary note, this entire situation points out the imbecilic nature of our tax code. Corporations and their investors are certainly entitled to make decisions that are in the best interest of their own bottom lines. Those decisions have social impact far beyond CEO bonuses and increased stock values. Hard working American citizens will be cast into unemployment as a result of Sunoco’s decision. These workers and their families will need to rely on the taxpayer funded social safety net of unemployment payments and various medical insurance programs that need healthy funding. And for all of this trouble, Lynn L. Elsenhans and Sunoco shareholders will not be held financially accountable. Capital gains tax sits at 15%. Capital gains are income in every sense of the word. Tax them as such. The zombie lie that capital gains taxes slow economic growth has never been proven to be true. There has been zero historical correlation between capital gains taxes and economic growth. Only demand will spur economic growth. Higher capital gains taxes have never slowed investments in our nation’s large and well- established corporations. Vital programs lose countless billions of dollars every year from this low rate of taxes on capital gains. Raising the tax rate on incomes over $250,000 will also do nothing to slow economic growth. Ms. Elsenhans stands to collect some type of huge bonus for her “noble” efforts to increase the profits of Sunoco and its shareholders. If Ms. Elsenhans were to collect a $5 million bonus for her work, an increase of the top tax rate to 40% would take away $250 thousand more than she would have paid at a 35% rate. Treating capital gains as income and a return to Clinton-era tax rates for the wealthy would pump over $100 billion in revenue back into the coffers through 2015.
Corporations, and their CEOs, have the freedom to act in their own financial best interests. We The People have the ability to offset that impact through encouraging industrial transition to new technologies and holding corporate actions financially accountable for the impact of their decisions through appropriate use of the tax code.