Tax breaks for Boeing have helped send jobs out of state

Here’s a headline that should make us happy: “Trump, Battered in Washington, Is Buoyed at Boeing Rally.” That was from the New York Times, last Friday.

But the funny thing is, there was no Boeing rally in our state, where the vast majority of Boeing workers live and work, making the vast majority of Boeing’s airplanes. And it wasn’t “fake news.” Trump just decamped to Charleston, South Carolina, to have a love fest with Boeing management. Those are the same people who funded and masterminded an all-out multi-million-dollar anti-union campaign to blackmail workers in South Carolina not to join the Machinists union.

The backdrop for this love fest between the billionaire and the mere millionaires of Boeing’s management was the latest new Boeing 787-10 Dreamliner in production in South Carolina. South Carolina wasn’t even called out in Boeing’s employment statistics in 2012. Now it is touted as the jewel in the crown. Is something wrong with this picture? A lot of things.

How did Boeing get all the billions of dollars to invest in South Carolina? Well, it could be seen as a direct transfer of tax money from our state, to Boeing, to South Carolina. Just in 2014 and 2015, Boeing got more than $521 million in tax breaks from the state of Washington. Did that go to ramping up Boeing employment in our state? No, employment has actually fallen, from 87,000 in October 2012 to 71,000 now. That is a loss of 16,000 jobs, or almost 1 out of 5 jobs disappeared.

Adding up the tax exemptions that Boeing rammed through the Legislature in 2003 ($3.2 billion) and 2013 ($8.7 billion) and even a top executive can figure out that’s how to invest in South Carolina. Which Boeing has done, to the tune of at least $2 billion, so far. These tax breaks have also enabled Boeing to pay over $41 million in fines in 2014 and 2015 for falsifying claims for the maintenance of military aircraft. No skin off Boeing’s profits!

Why is Boeing so anxious to rob the state of Washington and starve education funding, with these tax breaks? Is it because the workers in Washington, organized together in the Machinists Union and SPEEA, saved Boeing from its disastrous outsourcing of initial production of the 787 to other state, countries and companies? Is it because the 737 plant is going full-tilt as Boeing’s cash cow in Renton? Is it because we have the biggest concentration of aerospace-related production, manufacturing, and brain power in the world right here. Is it because the state of Washington has invested in community college workforce training and degrees tailored specifically to “supply” skilled workers for Boeing?

OK, so none of these reasons makes sense. How about this one: Washington workers are organized into unions at Boeing. Because of this, they don’t have to forfeit their constitutional rights when they walk into the plant. They get some respect from the company. They have some power to negotiate with the company to determine their wages and benefits. They cannot be fired at the arbitrary whim of a supervisor. They cannot be fired by Donald Trump, like he loved to do on “The Apprentice.”

Are there ways to stop the hemorrhaging of Boeing jobs from our state? Last year, state Rep. June Robinson, D-Everett, proposed a simple equation: Boeing, if you want your tax break, you keep jobs in Washington; if you reduce employment by 5,000 jobs or more, you lose your tax break and that money goes into education funding.

Really, what do we have to lose? Our state is just getting played by Boeing. We give Boeing tax breaks, they invest in other states and countries. We don’t, and Boeing invests in other states and countries, but they will have less money to do so. And of course, whenever these Boeing off-sites like the joint Boeing-Russian operation for titanium machining in the Ural Mountains of Russia, or the Charleston, South Carolina, site for the 787-E or the Boeing technology center in Moscow, whenever any one of them fail the exact quality assurance we all need for aircraft, Boeing will always fall back on the workers, the machinists, the engineers and the aerospace infrastructure of Washington state. So rather than encouraging Boeing to go, let’s just tell them they should stay!

Originally published at

Quickie link: All Income Growth is Going to the Richest 1 Percent of Washingtonians

According to All Income Growth is Going to the Richest 1 Percent of Washingtonians :

It’s time for policymakers in Washington state to take steps to reverse decades of widening economic disparities that threaten broad prosperity, now that it has again been shown that all income growth since 2009 continues to flow to the wealthiest Washingtonians.

An updated report from the Economic Policy Institute (EPI) shows that the richest 1 percent of households – those making over $388,000 a year – captured all of the new income generated in Washington state between 2009 and 2013 (see graph). By contrast, and in a stark reversal from past decades, average incomes among the remaining 99 percent of Washingtonians declined during this period, causing far too many hardworking families to fall even further behind.

All Income Growth is Going to the Richest 1 Percent of Washingtonians

Voting, taxes and what it means to be an American



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


TRUTH BOMB – A fact spoken in clear, easy to understand terms and without bias.

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:

Source: Finn, J. D., et. al. (2005). Small Classes in the Early Grades, Academic Achievement, and Graduating From High School. Journal of Educational Psychology.

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.

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.

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.


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.

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.

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


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.

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!

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.


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:


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:


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.


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:

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.


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.

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!


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:

Source: Washington State Department of Revenue

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.


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