Voting, taxes and what it means to be an American

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Image: Gazettes.com

When your ballot arrives later this week, take a pause and before you vote, consider, what does it mean to be an American? As Americans, we are all in this election together. We are in this country, this economy, this culture, and this government together.

What is government? It is the comprehensive delivery of services upon which we all depend, including emergency responders to the wind storms last week, schools for our kids, health care for retired people and low-income citizens, protection from violence and terrorism, road maintenance, public utilities, food safety, the court system to protect private property and enforce contracts, and the regulation of the financial underpinnings of our economy. Literally every part of our daily lives, and of the private capitalist economy, is dependent on government services.

We don’t get these services for nothing. We pay for them, with our taxes. So let’s talk about taxes. According to the New York Times, pollsters have been asking Americans whether “it is every American’s civic duty to pay their fair share of taxes.” Every year, about nine in 10 Americans agree they should.

It is not just people’s opinions. It is their actions. Paying federal income taxes is done through a system of voluntary compliance. Sure, you might be caught by the IRS if you don’t submit your 1040. But the actual likelihood of this is so slim that some economists, weighing costs and benefits, claim that it makes sense for a “rational” person to evade taxes altogether. But we are rational people and 140 million of American households, that is, us, file our federal income taxes every year. Over four-fifths of total tax liabilities are paid on time. We do this because we all understand, intuitively, that if we want public services, we have to pay for them.

What people don’t like is tax avoidance. You pay no federal taxes, and you reap all the benefits of living in America. That’s what appears to be Donald Trump’s situation, which he terms as “smart” and we all know is just selfish.

It is also the habit of some of Washington’s largest companies. Microsoft has stashed away $124 billion in Ireland, Luxembourg, and Singapore. This maneuver enables Microsoft to avoid $39 billion in what the corporation should have contributed in federal taxes. Microsoft is joined by Pfizer, GE, and Apple as those corporations that have hidden over $100 billion each in tax havens, avoiding taxes in our country.

Compare that legal maneuvering to avoid taxes to the voting habits of Americans. Even in the face of the anti-tax rhetoric which politicians like to preach, Americans have increasingly supported taxation for government services. Thirty-five years ago, only about one in five state ballot measures to raise taxes passed. In the past decade, voters have approved half of tax-increasing measures on state ballots.

This public support for taxation increases at the local level. Last April, voters in the Everett School District approved both a levy and a bond for capital projects and technology. Last February, voters in Arlington, Edmonds, Lake Stevens, Lakewood, Mukilteo and Stanwood all approved school levies. Less than a year ago, voters in Gold Bar, Stanwood, Arlington and Warm Beach voted for property taxes to finance fire and police services, renovate fire stations, purchase equipment and fund EMS. Across the county, voters approved an increase in the sales tax to enhance Community Transit services.

These are our neighbors, our families and ourselves voting to tax ourselves so that our local governments, school districts, and fire districts can provide the fundamental services needed as foundations for our quality of life. We as citizens make the immediate connections to our shared local well-being – hence, we support schools, EMS, and fire protection.

We make the same connection with the federal government. We understand that taxes provide safety, security, education financing, regulation of food and drugs, environmental protection, disaster relief, national parks, Social Security, Medicare and Medicaid, occupational safety, negotiations with other countries, and the list goes on and on.

We get that. We as taxpayers pay for that. We are the patriotic ones. Not so for the people who avoid their taxes, or who applaud those who avoid their taxes, or the corporations which hide their money in tax-free havens in other countries. They are not patriotic. They are free riders.

Originallly published: a the Everett Herald

Lawmaker Accountability, please!

Is it unconstitutional or even criminal when our elected leaders give more of our tax money to the rich and corporations than they do in serving and protecting the health and welfare of the American people? Corporate tax breaks are already twice as much than Medicare and Social Security combined, and corporate tax breaks are ten times as much as our three main programs needy families depend upon. Whether or not we elect Clinton or Trump, the multinational corporations have bought both sides to give them more of our tax dollar.
Washington State Supreme Court is on the verge of ruling tax expenditures unconstitutional to make the legislators accountable to the people.

President Obama legacy will show that by bailing out the banks and not closing the six corporate tax loopholes resulted in the rich getting richer, and the poor getting poorer, increasing the number of children living in poverty from 18% to 22%. THIS MUST BE STOPPED.

FACT: Whether Democrat Clinton or Republican Trump, Multinationals Set to Win the Election

FACT: 2015 Corporate Tax Breaks- Expenditures $1.22 Trillion more than the US Budget – Discretionary Spending $1.11 Trillion Federal Spending: Where Does the Money Go

FACT: CORPORATE 2013 TAX BREAKS $3 Trillion dollars a year, twice as much as Social Security and Medicare. Tax Avoidance On the Rise: It’s Twice the Amount of Social Security and Medicare

FACT: The President could close Six Egregious Corporate Tax Loopholes Sanders Asks Obama to Close Six Egregious Corporate Tax Loopholes

FACT: 10 Taxpayer Handouts to the Super Rich That Will Make Your Blood Boil

FACT: Global Elite Hiding Up to $32 Trillion in Offshore Accounts

FACT: PRIVATE FOUNDATIONS ARE PART OF THE PROBLEM, NOT THE SOLUTION. The Philanthropy Hustle

TRUTH BOMB – A fact spoken in clear, easy to understand terms and without bias. https://www.facebook.com/groups/TruthBomb/

How do Finns prosper more — with so much less, ostensibly, than we have?

Imagine living in a relatively small nation, where per capita income is $11,000 less than in Washington state, and the only natural resources are timber, water and ice. People pay a 31 percent tax on personal income in excess of $82,000, a value-added tax of 14 percent on food and restaurants, and 24 percent on most other goods. How could anyone possibly do well there, much less run a business and prosper?

And yet, looking at living conditions — such as education, health care, quality of life, economic dynamism and political environment — this nation actually does much better than we’re doing in the U.S. Fewer people are poor, and more people there live longer, are more productive, and are … well, happier.

This place isn’t Arendelle of the movie “Frozen.” It’s Finland. Finland has a highly industrialized, largely free-market economy. The conservative Heritage Foundation rates Finland and the U.S. 74th and 76th, respectively, in terms of “economic freedom.”

In Washington state, our per capita income is close to $50,000 per resident. By that measure, we’re a rich state. But we’re underfunding our schools from pre-K through higher education; too many people are homeless, while many more face stagnating incomes and diminishing public services; and we’re all facing more uncertain economic futures.

So how do the Finnish people prosper with so much less, ostensibly, than we have? The answer is, they make shared investments to build their kids, families and communities.

Look at the economy in terms of peoples’ lives: When a baby is born in Finland, the family gets a baby box with clothes, diapers, bedding, towels, a picture book, a teething toy and other items. Paid family leave kicks in for at least a year, at 80 percent compensation with a guarantee you can return to your job. When mom or dad decides to go back to work, the cost of day care is subsidized so the maximum monthly payment is $322.

As kids grow up, their parents can devote real time to them. Every worker gets five weeks vacation, and the family budget is enhanced with a monthly stipend of $110 for the first child. The stipend increases with each child, so the stipend for the fifth child is almost $200. Pre-kindergarten is universal and free for all children. Schools provide meals for all children. In school, children are immersed in a system focused on creativity, teacher and student autonomy, foreign languages, math and music. No surprise: 15-year-old Finns are the top in the world in education. And when a student goes to technical college or the university, there is no tuition. Instead, the student gets a living allowance!

The Finnish health care system covers everyone. A friend of mine recently had surgery which required two nights in the hospital. His total bill: $103.74, inclusive of surgery, hospitalization, care and medicines!

In retirement, people receive about 55 percent of their average earnings along with a $560 monthly housing allowance. The average pension, including the housing allowance, comes to about $29,000 a year. Full pensions start at age 63. It’s guaranteed, like our Social Security, so the Finns don’t have to worry and hope that their 401(k) performs well. They don’t need 401(k)s! How is this financed? The Finns pay 5.7 percent of their wages into the pension system, and 7.2 percent after age 53. Compare that to our 6.2 percent tax for our Social Security. Employers pay more: 23 percent.

So sure, taxes are higher in Finland. But it’s a shared investment the Finns use to build their economy. The Finns have figured out that once you provide a universal platform of educational opportunity and health and social security, then businesses can just focus on doing business, being innovative, creating new products and systems.

That is what the Finns do. It has a dynamic private sector, ranked third in the world by Grant Thornton accounting (the U.S. is ranked 12th). There are double the number of small and medium enterprises per 1,000 people in Finland compared to the U.S.

And the Finnish people don’t have to scrimp to pay $1,500 a month for child care, worry about how to take time off from work when they have a child, wonder how to pay $12,000 yearly tuition for a public university tuition, or risk bankruptcy in a medical emergency, or wonder about having enough to eat when they retire.

That means that they can grasp their future with hope. Can we?

Originally published at the Everett Herald

How conservatives promote prostitution of young women

As reported in Students seeking sugar daddies for tuition, rent, many college students turn to prostitution to pay their education debts.

Conservative opposition to taxation causes young women to turn to prostitution to pay for their education.  Why can’t American join the rest of the industrialized world and subsidize education and health care for everyone so that people don’t have to sell their bodies to survive?

A friend, Chris Tombrello, told me:

I did some consulting at the Jr. High school level in Yokohama– this was 20 years ago, some of the 9th grade girls would show off their cell phone collections– one girl had four of them, all different colors. Each phone was provided by a sugar daddy, men at least the age of their fathers. The only difference here is that the women are mostly of legal age, but really is it a good idea for 18 year olds to be selling themselves to predators? And really: what are the odds the FBI is investigating the phenomena? 100%?

Gov. Brownback is trying to turn Kansas into Washington State

From Tax cuts for the rich made Kansas broke — so now Republicans move to raise taxes on the poor:

Let’s say you’re the Governor of Kansas. The tax cuts for the rich you pushed through a couple years ago mean you’re in a world of budgetary hurt, and you’re not sure how you’re going to pay for basic expenses like roads and schools this year. What do you do? Repeal tax cuts? Absolutely not. You’re Sam Brownback. You balance your books on the backs of the poor, and cite fiscal prudence as a moral justification.

The Washington Post reports that Republican officials in Kansas are pursuing increases in sales and excise taxes – which have the ultimate effect of making it more expensive to be poor. People who have less money can’t afford to invest money like rich people; poor people have to spend their paychecks just to make it through the week. Consequently, sales taxes – as a matter of policy – proportionally punish people at the lower end of income spectrum.

Why Washington State has the Highest Class Sizes in the Nation

According to a January 2015 study of tax rates in all 50 states by the Institute on Taxation and Economic Policy, called “Who Pays”, Washington families pay among the highest state taxes in the nation – 20% above the national average. Washington families should therefore have the best funded schools and lowest class sizes in the nation. Instead, Washington’s one million children are forced to endure the highest class sizes in the nation. How can this be? In this report, we will “follow the money” to see how the Washington state legislature is robbing our schools of billions of dollars and robbing our children of their future in order to line the pockets of a few billionaires and wealthy multinational corporations.

Why Small Class Sizes are Important
Small class sizes matter to the future of our students because small class sizes allow struggling students to get the help they need to succeed in school and succeed in life. For example, the nation’s largest study on class sizes found thatlow income students who were lucky enough to have four full years of smaller classes were much more likely to graduate than their peers who only had zero to one year in smaller class sizes:
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Source: Finn, J. D., et. al. (2005). Small Classes in the Early Grades, Academic Achievement, and Graduating From High School. Journal of Educational Psychology.
http://www.classsizematters.org/wp-content/uploads/2012/10/Small-Classes-in-the-Early-Grades-Academic-Achievement-and-Graduating-From-High-School.pdf

A 2011 study, summarizing the life academic and economic outcomes of students in smaller classes in the STAR study compared to their peers who had normal class sizes, found that “The effects of class quality fade out on test scores in later grades but gains in non-cognitive measures persist.” Put in plain English, high stakes test scores are not an accurate predictor of future student performance. However, student engagement from small class sizes is predictive of future success as an adult.

Here are just some of the adult outcomes for these students 20 years later of being in a smaller class in elementary school: Students were significantly more likely to graduate from high school, attend college, start a savings account, buy a home, get married and stay married. Students were less likely to commit a crime or go to prison. Much of this information was obtained from federal tax returns of 95% of the nearly 12,000 students involved in the STAR study.
Source: Chetty, R., Friedman, J.N., Hilger, N., Saez, E., Schanzenbach, D.W., & Yagan D. (2011). How does your kindergarten classroom affect your earnings? Evidence from Project STAR. Quarterly Journal of Economics, 126(4), 1593-1660.
http://obs.rc.fas.harvard.edu/chetty/STAR.pdf

In a separate analysis, Alan Krueger, Chair of the Council of Economic Advisers, estimated that every dollar invested in reducing class sizes yielded about $2 in long term economic benefits. https://etec511.wikispaces.com/file/view/economic+considerations+and+class+size.pdf

Smaller Classes Lead to More Successful Students
Wealthy private schools understand the importance of small class size. For example, at Lakeside Private School in Seattle, average class sizes are 16 students. If class sizes of 16 students is considered ideal for the children of the wealthy, small class sizes of 16 students should be available to all students in Washington state.

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Sadly, Washington has the Highest Class Sizes in the Nation
Unfortunately, according to the National Center for Education Statistics Schools and Staffing Survey (Table 8), Washington State has the third highest class sizes in the nation for elementary school, the second highest class sizes in the nation for middle school and the second highest class sizes in the nation for high school. http://nces.ed.gov/surveys/sass/tables/sass1112_2013314_t1s_007.asp

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This estimate of class sizes comes from a national survey of classroom teachers in which teachers are asked how many students are in their average classroom. This survey indicates that for Grades 1 through 6, the national average class size is 21 students and the average class size in Washington state is 24 students. For Grades 7 through 12, the national average class size is 27 students and the average class size in Washington state is 30 students.http://nces.ed.gov/programs/digest/d13/tables/dt13_209.30.asp

Here is a distribution of class sizes showing which states have low, average, above average or extremely high class sizes:

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However, even this survey of teachers under-reports the actual class sizes in the nation and in Washington state because it includes Special Education teachers who often have classes of under 10 students. Excluding Special Education classes, the typical or median class size in the US is likely close to 29 students and in Washington state, the typical or median class size is close to 32 students per teacher per class period.

Why Actual Class Sizes are Much Larger Than Student to Teacher Ratios
The most common mistake made when discussing class size is to confuse class sizes with Student to Teacher Ratios. The Student to Teacher Ratio is determined by dividing the total number of students in a school or a state by the total number of professional staff at the school or the state. For example, if you go to the Washington State OSPI website and click on Apportionment, then Publications, then Personnel Summary Reports, then select a year, then click on Table 46, you will get a report called “Ratio of Students to Classrooms.” This is actually the Student to Teacher Ratio. For the 2014 school year, this ratio was 18.2 students per teacher. http://k12.wa.us/safs/PUB/PER/1415/tbl46.pdf

This type of statistic might mislead one into believing that the class sizes in Washington state are only 18 students – which would mean Washington state has the lowest class sizes in the nation and in the world. Yet if you walk into any real classroom at any real school in Washington state and count the actual students, you will see about 30 students in the real classroom. Many classrooms have 35 to even 40 students!

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The OSPI state report card is also misleading. It indicates that Washington state has 1,075,107 students and 60,543 Classroom Teachers. This would lead one to believe that the average class size is 18 students in our state. Why is there such a huge difference between the Student to Teacher ratio reported by OSPI and the number of students in real classrooms? The problem is that OSPI uses an extremely broad definition for classroom teacher. Many so-called classroom teachers are actually administrators. We need administrators. But we should not be misleading parents and voters by calling them teachers. Using Student to Teacher ratios misleads the public and even legislators into thinking that class sizes are not that bad when the truth is that class sizes in Washington state are among the highest in the nation.

In fact, using a real average class size of 30 students, the actual number of classroom teachers we have is about 36,000. This means that OSPI is mis-reporting 24,000 administrators as teachers. This also means that at 10,000 additional teachers per billion dollars, it would take about $3.6 billion dollars per year to cut class sizes in half here in Washington state. This does not include the cost of support staff or building the actual schools. Nor does it include raising the pay of teachers here in Washington state to the West Coast average or eliminating the use of local levy funds for basic education. My plan to cut class sizes in half therefore includes one billion dollars for replacing levy funds, one billion for increasing teacher pay, two billion for building hundreds of new schools every year, and four billion for hiring 36,000 new teachers and 4,000 additional support staff. The total needed to cut class sizes in half is about $8 billion in additional revenue per year.

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Where can we get $8 billion per year needed to cut class sizes in Washington state in half?
Given the fact that poor and middle class families in Washington state are already paying the highest state taxes in the nation, a more accurate question is where are the money went that should have gone to our public schools? It turns out that there is no need to increase taxes at all. What we really need to do is decrease tax breaks for the wealthy. It will be impossible to lower class sizes for struggling students until we first recognize and better understand how Washington legislators real Paramount Duty has not been our public schools but rather giving away more than $30 billion in tax breaks to wealthy multinational corporations (who pay for their re-elections). Here is a graph of the increase in the number of state tax breaks since 1996:

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Here is a graph of the increase in the dollar amount of the tax breaks in billions of dollars compared to total state revenue and spending for public schools:

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Understanding the Deceptive Nature of the Washington Department of Revenue Tax Break Reports
The Washington legislature has not only approved the largest tax breaks in the US, they have approved the largest most unsustainable tax breaks in the history of the world. This is why we now have such a broken tax system.

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Since tax breaks for the wealthy are what prevent us from fully funding schools, any parent or teacher who wants to understand why Washington has the highest class sizes in the nation must take time to understand how the public is being deceived about the amount of these state tax breaks. This subject is complex. So try to be patient, take your time and read slowly.

Every four years since 1984, the Washington State Department of Revenue is required by law to release a Tax Exemption Report. Here is a quote from RCW 43.06.400 authorizing this report: “Beginning in January 1984, and in January of every fourth year thereafter, the department of revenue must submit to the legislature prior to the regular session a listing of the amount of reduction for the current and next biennium in the revenues of the state or the revenues of local government collected by the state as a result of tax exemptions. The listing must include an estimate of the revenue lost from the tax exemption, the purpose of the tax exemption, the persons, organizations, or parts of the population which benefit from the tax exemption, and whether or not the tax exemption conflicts with another state program.

It should be obvious that giving away tens of billions of dollars in tax breaks every year conflicts with the Paramount Duty of the legislature to fully fund our public schools. Every billion dollars of tax exemptions means 10,000 more teachers losing their jobs and thousands of kids forced to endure higher class sizes. This fact is not mentioned on any of the tax break reports.

In January 2016, Vikki Smith, the current Director of the Washington State Department of Revenue released the 2016 Tax Exemption Report, which she called the 2016 Tax Exemption Study. I have spent more than 8 years researching and writing analysis of the previous four versions of this report and I will briefly summarize my findings here You can download a PDF file of this 910 page study at the following link:
http://dor.wa.gov/docs/reports/2016/Tax_Exemption_Study_2016/2016_Tax_Exemption_Study_Entire_Report.pdf

The Department of Revenue currently collects about $20 billion per year in taxes but also exempts at least $30 billion per year in state taxes. The DOR Tax Exemption Study attempts to describe the $30 billion per year in lost state revenue. These $30 billion in lost state revenue are “justified” by corrupt state legislators with the false claim that they “create jobs.” In fact, history shows that in nearly every case, tax exemptions to wealthy multinational corporations like Microsoft and Boeing do not create jobs. For example, after receiving billions in tax breaks, Boeing has laid off thousands of workers and used their tax breaks to build a non-union airplane manufacturing plant in South Carolina – firing thousands of Washington workers. Microsoft used their tax breaks to build sweat shops in China – also firing thousands of Washington workers.

However, as was true of the 2012 Report, authored by the former director of the Department of Revenue, Suzan Delbene, the 2016 report has several glaring omissions:

First, the 2016 study does not include the 1997 tax break on commercial intangible property. Since this is one of the largest of all the tax breaks accounting for several billion dollars in lost revenue with these benefits going almost entirely to three of the the richest people in the world, Bill Gates, Steve Ballmer and Paul Allen, one has to question the validity of the rest of the 2016 Tax Exemption Study.

Second, this report does not mention the billion dollar per year Microsoft Business and Occupation tax break. Microsoft achieves this tax break by claiming that they are located in Nevada – when everyone including the Washington State Department of Revenue knows they are located in Redmond Washington.

Third, this report does not fully analyze revenue lost by manipulating the Business and Occupational categories that alway some businesses to pay these taxes at an extremely low rate while other businesses pay these taxes at an extremely high rate. It simply assumes the previous manipulated B & O rate was somehow fair or accurate. A more consistent way to evaluate any tax would be against a set standards such as a one percent B & O tax.

Fourth, this report low balls the amount of revenue lost through tax breaks by falsely claims that repealing all 694 tax breaks (now up to more than 700 thanks to the 2016 legislature) would only generate about $30 billion. This claim is based on another blatantly false assumption that repealing the 1931 intangible property tax break on personal property would not generate more revenue but merely shift the burden of total property taxes away from some tax payers and to other tax payers. Here is a quote from Section 1, page 3 of the study: “Repealing a property tax exemption does not increase state revenues. Removing a property tax exemption broadens the tax base, and at the same time reduces the tax rates. This reduces the property taxes for existing taxpayers, and shifts property tax to currently exempt taxpayers.”

In fact, our state constitution has a one percent tax rate on all property. If you own a $200,000 home, one percent of that is $2,000 in property taxes. But if the value of your home doubles to $400,000, then one percent of that is $4,000. The state revenue is directly related to the value of property. So if the value of property doubles, the tax burden is not merely shifted from one tax payer to another – the total state and local taxes available doubles. How Vikki gets away with such an absurd statement is because local levy rates are set by the total amount of the levy and if the total amount did not raise then the burden would just shift from one property owner to another. What Vikki is ignoring is that the total levy is almost always limited by the one percent limit rule in our state constitution. Doubling the amount of property would double the revenue available for funding public schools.

Vikki next mistakenly assumes that the value of intangible property is only $2 trillion. Intangible personal property is discussed on page 17-458 of the 2016 tax exemption report. On page 459, Vikki states that her assumption is that the value of personal intangible property exempted is $1,907 billion or about $2 trillion or about the same as the value of tangible property in Washington state. The ratio of tangible to intangible property was 50-50 in the 1990s. But there has been a dramatic rise in the value of intangible property to the point where by 2010, intangible property accounted for about two thirds of all property. In other words, since we know that tangible property in our state

What is Intangible Property?
Tangible property is property you can touch –such as homes and commercial buildings. Intangible property includes all other forms of wealth – such as stocks, bonds and computer programs. Historically, intangible property accounted for a very small percent of all property. However, with the concentration of wealth in the hands of the very rich, intangible property now account for over 70% of all property. Over 90% of intangible wealth is owned by the top one percent of our richest citizens.

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Due to a rapid rise in the concentration of wealth in the hands of the richest one percent, and with nearly all of this wealth being in the form of intangible property, the amount of lost revenue due to this tax exemption has skyrocketed since 1997 to the point where it is now causing a loss of state funding of more than $4 billion per year.

It is no mere coincidence that our State has been short changing our public schools by billions of dollars a year ever since. As a direct result of this massive and unwise State tax give away, as well as the federal tax cuts since then, the wealth of the richest one percent of our population has DOUBLED in the past 20 years from 20% of our total wealth to 40% of our total wealth. This single exemption was responsible for $7 billion in state tax breaks per biennium or $3.5 billion in state tax breaks per year in 2008. This makes this single tax break much larger than any other tax break. The law allowing for this tax break is RCW 84.36.070. http://apps.leg.wa.gov/rcw/default.aspx?cite=84.36.070

This massive 1997 tax loop hole has given billions of dollars in tax breaks to our richest citizens every year during the past 18 years by exempting over one trillion dollars of “intangible property” from our State property tax. It is the single largest tax break in the history of our state and bigger than the Billion Dollar Per Year Boeing Tax Break and the Billion Dollar Per Year Microsoft Tax Break combined!

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A Billion Dollar Shift in Property Tax Burden from Investors to Homeowners
One mechanism that led to this loss of state revenue was that wealthyinvestors suddenly had a huge financial incentive to mis-classify their commercial tangible property as intangible property. This is what many investors did – causing a huge shift in property tax burden from investors to homeowners. Here is a graph of this shift:

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Source: Washington State Department of Revenue http://dor.wa.gov/docs/reports/wa_tax_system_11_17_2004.pdf

The property tax burden on middle class homeowners has skyrocketed in the past 14 years as the ratio of commercial to residential tangible property has shifted from about 50-50 in 1997 to 66% residential to 33% commercial by 2006. When $100 billion dollars of commercial property is exempted from property taxes, residential property taxes must go up even if State and local spending remains the same.

As a consequence of these tax break for millionaires, and tax shifts to our middle class, our middle class now pay much more than the national average in State taxes while millionaires in our State pay much less than the national average. Working families see their tax bills go through the roof and they naturally assume that State spending is “Out of control.” But what is really out of control is tax breaks for billionaires.

We Can Cut Class Sizes in Half Just by Rolling Back Tax Breaks to 1996
In 1996, we had 400 tax breaks costing $20 billion. We now have more than 700 tax breaks for the rich costing our schools $30 billion. This includes the 1997 Intangible Property tax break that is so unfair and so costly that the Department of Revenue and the state legislature do not even want you to know about. It also includes most of the Boeing tax breaks and the Microsoft tax break.

So the question is what is more important? Helping Bill Gates and Paul Allen buy another private jet? Or helping one million students in Washington state get the education they need and deserve to succeed in school and succeed in life? If I am elected, I will file a motion for summary judgment immediately to declare every tax break passed since 1996 to be illegal, null and void and that the resulting $10 billion per year in additional state revenue be put in an account controlled by the Superintendent of Public Instruction. We could have full school funding restored in as little as 6 months.

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You now know why class sizes in our state are the highest in the nation. The fact is I am the only candidate even talking about the real cause of our massive class sizes. All of the other candidates like to talk about their “great relationships” with the very bandits who are robbing our schools of funding and our kids of their future. They perpetuate the myth that some how the legislature will suddenly come clean and start funding our schools “next year.” But all that will come out of Olympia next year is the same thing that came out of Olympia this year and last year and the year before that – more excuses and more lies. Did you know that 4 years after the Supreme Court McCleary ruling, we have 30,000 more kids – but 1,000 fewer teachers? All we got since McCleary was another fake committee and another hundred tax breaks for the rich!

This is why we need completely new leadership, more honest leadership, in Olympia. This is exactly what I will provide – real solutions – not merely marketing slogans. I therefore hope you will share this important article with every teacher and parent you know. Together, we can win this election and give our kids the education they deserve.

Originally published at SpringForPublicSchools.org

Litzow's mistatement, and can Eastside Democratic legislators support progressive taxation?

Saturday I attended the 41st Legislative District town hall, where Rep. Judy Clibborn (D – Mercer Island — left, below), Rep. Tana Senn (D – Mercer Island), and Senator Steve Litzow (R – Mercer Island) answered questions about tolling of I-405, charter schools, taxes, and Puget Sound Energy’s plan to install new high-power lines (Energize Eastside and http://cense.org).

41LD Town Hall, Feb 20, 2016

Citing the will of the people, Litzow justified his vote to support Senate Joint Resolution 8211, which would amend the constitution to require a two-thirds super-majority of legislators to raise taxes. The vote was along party lines. The resolution failed to get the 2/3rds needed in the Senate to pass.

Litzow said that Eastside residents supported Eyman’s super-majority initiative I-1366. But according to the Secretary of State’s data, over 61% of King County residents voted No on I-1366. Furthermore [added 2016/02/22], Andrew Villeneuve of the Northwest Progressive Institute informed me that on the Eastside I-1366 was rejected (click the first tab of the spreadsheet).

Steve Litzow conveniently failed to mention that I-1366 FAILED in the 41st Legislative District. It also failed in the 45th and the 48th. The only Eastside LD it passed in was the 5th. The numbers:

Legislative District 45 (Andy Hill, Roger Goodman, Larry Springer)
14,904 Yes
16,878 No

Legislative District 48 (Cyrus Habib, Patty Kuderer, Joan McBride)
11,999 Yes
15,910 No

Legislative District 41 (Steve Litzow, Tana Senn, Judy Clibborn)
14,381 Yes
19,427 No

Legislative District 5 (Mark Mullet, Jay Rodne, Chad Magendanz)
17,263 Yes
13,964 No

Litzow disagreed with arguments  — repeated in a comment by former Representative Marcie Maxwell — that a 2/3 super-majority threshold would make it almost impossible to pass any revenue increases. Litzow cited the overwhelming bipartisan support last year for the transportation package, which raised the (regressive) gas tax.

In response to a question, Litzow justified his vote to fire State DOT director Lynn Peterson, citing failed projects and cost overruns.  When Clibborn responded, she was openly angry about the Republicans’ partisan move. The Republican decision to fire Peterson was strange given that only last year Senate Transportation Committee Chairman Curtis King, R-Yakima had told Peterson: “I want to thank you for the job you have done over the past two and half years, and I can’t say thank you enough to the staff that you have behind you.”

On charter schools, Litzow repeatedly mentioned that such schools would help economically disadvantaged kids.  Charter schools aren’t needed in Bellevue, he agreed.

Though the state Supreme Court ruled that state funding of charter schools is unconstitutional, Senate Republicans found a loophole and passed SB 6194, of which Litzow is a prime sponsor. SB 6194 passed the Senate on Jan 20. There was a hearing in the House on Friday, Feb. 19.  Marcie Maxwell testified against SB 6194, and she repeated parts of her testimony at the town hall.

Maxwell said that charter schools are largely unaccountable, being un-elected.

She said that there are many highly innovative public schools — e.g., in Renton.   If the state fully funded K-12 basic education there’d be more innovation — “instead of struggling to figure out which custodian to cut.”

The most problematical part of SB 6194 is its trigger conversion section, which allows a majority of teachers or parents in a school to trigger conversion to a charter school.  Since most taxpayers paying for schools are neither teachers nor parents of students in a given school, trigger conversion would threaten public support for education.

In the business community, charter schools are viewed as a big investment opportunity — a way to milk taxpayers for private profit.  See, for example, CNBC’s Invest in Public Charter Schools?.

Maxwell and others argued that we should first fund public schools (McCleary) before supporting private enterprises.

Litzow said that charter schools now cost the state $14 million per year, just  0.1% of the what the state pays for public education. (Litzow incorrectly said “1/1000th percent.”)   The state spent $15.1 billion from the General Fund on K-12 education in 2014.

I heard from others that Litzow and fellow Republicans were refusing to bring House bills to a vote unless the Democrats agreed to fund charter schools. When I asked him about this, he denied it, saying they already passed school funding bills.

After the town hall, I asked Tana Senn whether there’s any chance SB 6194 (including trigger conversion) would pass the House. She said that if it came up for a floor vote, it would likely pass.  I presume all Republicans would support it, and a few Democrats would go along. But she thinks it’s unlikely the Democratic leadership will allow SB 6194 to come up for a vote.    She agreed that it’s possible, though, that SB 6194 will pass in a trade for some other measure desired by Democrats.

Please contact your legislator and ask them to oppose SB 6194.

According to the state Supreme Court’s McCleary decision, the state must lessen its reliance on local levies for funding education.  Specifically, local levies can be used for enrichment, but not for “Basic Education.” Local levies are one reason Bellevue schools are so good:  local taxes support local schools and directly affect housing prices.

Changes mandated by the Supreme Court could harm Eastside communities. For example, if the state collects taxes and redistributes them statewide, that would result in a net transfer of money from wealthy areas, such as Bellevue, to poorer areas.  Specifically, King County would be subsidizing Eastern Washington — where Republican legislators hold a majority of seats.

The situation is ironic. Republican voters (who are the beneficiaries of high taxes) oppose taxes.   If non-rich Republican voters realize that they’ve been voting against their own self-interest, they might turn into Democrats.

During the discussion of raising taxes, Tana Senn twice assured the assembled crowd that she would fight any tax plan that resulted in a net loss of revenue for Bellevue schools.  Yet in general Senn is a strong Democrat who supports public schools, public transportation, an adequate social safety net and fair taxes.

Eastside legislators are in a bind when it comes to certain Democratic-friendly policies.  There are a lot of wealthy people on the Eastside and a lot of car drivers.  Democrats risk losing elections if they move too far to the left.  I presume this is the same game played nationally: Hillary supporters claim that she’s more electable than Sanders (though polls show Sanders defeating Trump or Cruz more handily than Clinton would).

Likewise, at previous town halls, our 41st LD legislators were unanimous in opposing tolling of I-90, although we live in some of the wealthiest communities. Granted, some elderly people on Mercer Island pay high property taxes, have low income, and are dependent on cars. But, still, people in poorer communities are even less well off on average, and cars are noxious.

Discussing finding additional revenue to fund McCleary (the state Supreme Court decision mandating full funding of education), Clibborn said, so far, the legislature has submitted “a plan for a plan” to fund education. It’s unclear whether the Supreme Court will accept that plan.  Tana Senn said that a capital gains tax could work (and Clibborn says she agrees).  Republicans have opposed new revenue and have claimed that cuts can be made to social services or money can be found via efficiencies.

Someone mentioned that when the legislators were discussing ways to help to help indigent students pay for meals, one Republican suggested that teachers volunteer to buy food for the poor kids.

This is The Big Battle of American politics:  can and should we fund government to provide various services?   As even Litzow mentioned, there are some Republican legislators from the eastern part of the state who will oppose any revenue increase. (Litzow generally votes with his caucus.) Such Republicans are ideologically opposed to all government spending.  The long arc of history is towards government providing education and basic health care, at a minimum.

Concerning Puget Sound Energy’s Energize Eastside, the legislators pointed out that the legislature has little control over the issue: it’s mostly a city and county issue.

When Marcie asked a question about regressive taxes,  I held up a version of the following graph that shows the dramatic decrease in General Fund state revenue as a percentage of state personal income:

Washington Revenue as a percentage of personal income

Litzow said that the state is spending a record amount in its budget.  Yes, but the state population has increased 16% between 2000 (6.2 million) and 2014 (7.1 million).

Washington State is said to have the most regressive state tax system among the 50 states.  The poor and the middle class pay over 10% of their income in state taxes; the rich pay under 3%.  Hence Senate Bill 6093, which would extend property taxes to intangible property such as stocks and bonds. That would add some needed fairness and uniformity to our tax code.

Litzow said that Democrats controlled both houses of the legislature and the governorship for many years but didn’t act to fix our regressive taxes. I said that’s because of the centrist “Road Kill Dems” (including Clibborn, by the way). Still, the Republicans political message is all about “Vote for me. I’ll lower your taxes.”  The culprits are conservatives, not just Republicans.

After the town hall Litzow was saying that he agrees that Citizens United was probably a bad decision. He thought both corporations and unions shouldn’t be able to spend money on campaigns.

According to Tax Policy Center’s State and Local Tax Revenue as a Percentage of Personal Income, state revenue as a percentage of Personal Income has been on the decline in Washington State and nationwide.   For Washington State, the percentage has fallen from a high of 10.78% in 1997 to 8.39% in 2013 (the last year for which data is available).

In Washington, state and local taxes per $1000 of personal income has fallen from $125 in 1999 to under $93 in 2013.  We’re now ranked 35th of all states.

Washington State spent $10,682 per pupil in 2012; nationwide, the national state average was $11,254.

Nationwide, corporate income taxes as share of GDP was over 6% in 1954 and declined to under 2% in 2012:

Corporate Income Tax as a Percentage of GDP

Evidence that conservatives view charter schools as a money-making opportunity:

Forbes cover: education is a trillion dollar opportunity

Judy Clibborn mentioned that she had gotten many “vile” emails from constituents angry about gun legislation — presumably from gun rights advocates.  Gun control advocates can be passionate and pleading, but I doubt their emails would be “vile.”

Please email or phone your legislators.  They listen to their constituents!

 

At the end of the meeting, several Chinese Americans expressed concern about the planned opening of a marijuana store on Factoria Blvd in Bellevue.  The store would be within a couple thousand feet of Newport High School (one of the best schools in the state, and a main draw for Asian families). The Chinese Americans are concerned that their children may be tempted to smoke marijuana.

A hundred or so Chinese Americans meet at a local church on Sundays. A main topic of discussion is their children’s education. The good schools in Bellevue are a main reason for high housing prices.

On the local social network, there was likewise a discussion among local residents concerned about what sort of people a marijuana store would likely attract.

I said that I don’t smoke marijuana and I think it’s not healthy to do so, but I said it’s clearly safer than alcohol.   A Chinese woman said that that’s the argument she had heard from others.

Alcohol causes people to get into fights, beat their wives, ignore their kids, and kill others with high-speed driving. At worst, marijuana makes people lazy, happy, and hungry.

The Chinese woman was sitting next to me during the town hall. When the legislators discussed charter schools, she turned to me and whispered, “What are charter schools?” I said, briefly, that they are private schools.   After the town hall, Marcie Maxwell was explaining to several Chinese Americans about charter schools. They invited her to speak to them about it at their church meeting.

Whether Chinese Americans would support progressive taxation is an open question.  If it resulted in a transfer of money away from Bellevue schools, they may oppose it.

Chinese Americans should be encouraged to participate in party politics.  This is especially true in Bellevue.  According to the city’s webpage on demographics, the percent of Asians in Bellevue increased from 9.9% in 1990 to 17.4% in 2000 and then to 27.5% in 2010. (I bet the percent is over 30 now.)   I’m not sure what proportion of Bellevue Asians are American citizens, but they’re obviously an important constituency that should be nurtured.  They are likely to support public education.

Is the 2016 Washington State Legislature the Most Corrupt Legislature in History?

When one uses the term “corruption” one is likely to think of big states like Texas or Florida or Illinois with all of their bribery and kickback schemes. In this article, we will provide a few examples of why the Washington state legislature may be not only one of the most corrupt legislatures in the nation – but one of the most corrupt legislatures in the history of our nation.

Exhibit #1: The only state legislature in history to repeatedly ignore a Contempt Citation from their State Supreme Court
Both New Jersey and Arizona Supreme Courts found their legislatures had failed to comply with their state constitutions to fund public schools. In both cases, the legislatures acted by actually increasing funding for schools. However, the Washington state legislature has basically told our Washington Supreme Court to “shove it.”

Here are the facts. In September, 2014, for the first time in the history of Washington state, the Washington State Supreme Court held the Washington State legislature in “contempt of court” for failing to comply with our State Constitutional Paramount Duty” to fully fund our public schools. The 2015 legislature responded by adding back nearly one billion dollars in funding they had cut a couple of years earlier. The legislature had the audacity to call restoring these funds an “increase” in school funding. In August, 2015, our Supreme Court was not amused by this false claim and began “fining” the State legislature for failing to fund our public schools. However, the 2016 Washington State legislature has not even been willing to discuss funding public schools. Instead, they have once again decided to kick the can down the road by forming a committee to study the issue – making this the seventh Education Funding committee in the past 20 years! This alone ought to be enough to call the Washington State legislature the most corrupt legislature in history. But there is more. Sadly, there is much more.

Exhibit #2: Despite having one of the strongest economies in the nation, Washington State has among the lowest school funding and highest class sizes in the nation.
In January 2016, Business Insider rated Washington state as having the strongest economy in the nation.
http://www.businessinsider.com/state-economy-ranking-q4-2015-2016-1

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This was mainly because Washington state has a very high per capita income. What the article failed to mention is that most of the income in Washington state goes to a few billionaires. The article also failed to mention that Washington state has among the lowest school funding and highest class sizes in the nation. We will get to the reasons behind this lack of school funding in the next three Exhibits confirming the corruption in Olympia.

Exhibit #3: Washington state has the most unfair state tax system in the nation
A 2015 national study found that while the poor and middle class in Washington state pay on average 12% of more in state taxes, billionaires in Washington state pay only 2% in state taxes. The richer you are in Washington State, the less you pay in taxes:

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http://www.itep.org/whopays/states/washington.php

Exhibit #4: Some claim that the Boeing $9 billion tax break is the largest tax give away in the history of the planet.

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Ironically, despite being given $9 billion in no strings attached payoffs, Boeing has continued to ship thousands of jobs out of Washington state.

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Exhibit #5: The hidden Microsoft Tax Break is actually bigger than the Boeing Tax break
Time for a quiz question: Where is Microsoft located? Raise your hand if you think they are located in Redmond Washington. Despite making more than $20 billion per year in profits, Microsoft has avoided paying Washington state taxes by claiming that they are located in Reno Nevada.

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Washington state has a one percent Business and Occupation tax on gross receipts that Microsoft is dodging. One percent of $100 billion in gross sales is $1 billion per year. Multiple this times the past 10 years and Microsoft owes the children of Washington state at least $10 billion in back taxes. Like Boeing, Microsoft has been laying off people instead of hiring them. So this is a one two punch against both our schools and our economy.

Exhibit #6: Despite giving away billions of dollars every year to billionaires and wealthy multinational corporations, the Washington State legislature cannot seem to find any money to fund our public schools.
It would take more than $3 billion per year in additional funding just to restore school funding and class sizes in Washington state to the national average. This is why the Supreme Court is fining the state legislature. But despite this huge shortfall, and the court order, the 2016 Washington state legislature is not even holding hearings on funding our public schools. Instead, only one bill has been submitted in the Washington state legislature in the past two years that would actually provide the billions of dollars needed to fully fund our public schools. That bill was Senate Bill 6093 by Senators Chase and McAuliffe which would raise about $4 billion per year by repealing a tax break for billionaires. Olympia is so corrupt that this bill has not even gotten a hearing.

Exhibit #7: Washington State legislature ignores a $22 billion school construction backlog
Washington state has one of the highest percentages of “unhoused students” in the nation with more than 10% of all Washington students (more than 100,000 students) forced to spend their school days in unhealthy particle board boxes. Also, over half of all schools in Washington state are more than 50 years old and do not meet health standards or earthquake standards. In the event of a major earthquake, as many as 500,000 students could be killed or injured. Yet, unlike Oregon and British Columbia – which have started to address this problem, the Washington state legislature has refused to do anything to address the school construction backlog. Instead, the legislature has shifted nearly the entire burden for building schools onto the backs of local homeowners through sky high local property taxes.

Exhibit #8: The Washington State legislature has actually passed bills to increase child homelessness and child poverty.
On February 2 2016, Washington State OSPI announced that the number of homeless students in Washington state continues to rise at a rate of 20% per year. For the 2014-2015 school year, more than 35,000 Washington state students did not have a permanent place to sleep at night.

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Continuing this 20% rise for the current school year means that the number of homeless students has doubled from about 20,000 to about 40,000 in just 8 short years. Only half of these homeless students manage to graduate from high school. Equally appalling is the dramatic rise in the percentage of students living at or near the poverty level in Washington State. Just 16 years ago, only 30% of Washington students lived near poverty. Today, nearly half of all Washington students live near poverty. This is an increase of 200,000 students living near poverty in our state in just the past 16 years.

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Part of the problem of child poverty and homelessness is that their parents do not have jobs (and the legislature has done nothing to create jobs). But the other part of the problem is that the Washington legislature has actually gutted programs designed to train parents so that they can go out and get a good paying job.

Exhibit #9 Washington state legislature guts Working Connections Program
In 2011, while the Washington legislature was approving massive tax breaks for billionaires, Microsoft and Boeing, they were also gutting the Working Connections program. This program provided low income children with child care and a place to live while their parents learned job training skills. The legislature gutted $100 million from this program resulting in about 30,000 families being tossed out onto the streets. Tens of thousands of children lost their only source of income – all so that billionaires could buy bigger boats.

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Exhibit #10: Washington State Legislature Refuses to Allow Struggling Low Income Students to have access to a Fair High School Equivalency Test
In January 2014, a for profit corporation called Pearson took over the GED High School Equivalency test and made it so hard that not even college professors or members of our state legislature could pass it. This resulted in the number of students receiving a GED in Washington state falling from a previous average of more than 13,000 graduates per year to less than 3,000 graduates per year.

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Because a High School Equivalency Certificate is needed to get a good paying job or go to college, the lack of a fair GED test has destroyed the lives of more than 10,000 students per year or about 200 students per week ever since January 2014. But despite this devastating harm to low income young adults, our State legislature has refused to allow students in our state to have access to either of two fairer options – the HiSET and TASC. Meanwhile 27 other less corrupt states have acted or are in the process of acting to allow their struggling low income students access to a fairer test (see map).

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Ironically, failing to offer struggling low income students a fair high school equivalency test will ultimately cost our state hundreds of millions of additional dollars in prison costs and the lack of a high school equivalency certificate increases the chances of a person committing a major crime by about 10 percent. So depriving 10,000 students per year of a High School Equivalency certificate will eventually increase our prison population by about 1,000 inmates per year.

Conclusion… Is the 2016 Washington State Legislature the most corrupt legislature ever?
If forcing one million students to attend over-crowded, unsafe and unhealthy classrooms just so a few billionaires can get bigger tax breaks is not a sign of extreme corruption, then I do not know what is.

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The only good news in this report is that 2016 is an election year. I am hoping some parents and teachers will finally say “enough is enough” to the corrupt clowns in Olympia and run for office to replace all of them. As always, I look forward to your questions and comments.