The Washington State Revenue Council just released their revised revenue forecast admitting for the first time that State revenue will only be $30.3 billion – a $1.4 billion decline from their prior forecast in June of $31.7 billion.
But here’s the REAL Washington State Budget…Billions of Tax Payer Dollars are diverted every year to Out of Control corporate tax breaks for some of the richest corporations in the history of our planet! Over two hundreds million dollars a year is given away in corporate welfare to Boeing – and another one billion a year is given away in tax breaks to Microsoft!
As a consequence of these massive tax breaks, school funding in Washington State is now at its lowest level, as a percent of income, in the past 30 years… and near the lowest in the entire nation!
Despite diverting more than $2 billion dollars away from our public schools in the past two year, the budget shortfall for this coming year is going to be billions of dollars more than has been reported to the media… Learn why our State is heading for a financial meltdown… and what you can do to stop it!
What the corporate media failed to point out is that tax breaks for wealthy corporations have skyrocketed from $20 billion per year in 2000 to $50 billion per year in 2010.
10 Year of Out of Control Corporate Tax Breaks
State Revenue compared to Tax Exemptions (to nearest Billion)
Washington State OFM, 10 Year Financial Trends, Schedule 5: Near General Fund. Annual Tax Breaks extrapolated from DOR Tax Exemption Reports. See also http://leap.leg.wa.gov/leap/Oversight/histongf.pdf
Tax breaks for major corporations in our state have skyrocketed 250% during the past 10 years (from $22 billion per year in 2000 to $50 billion by 2010): Over 90% of these tax exemptions benefit the richest one percent, with much of this wealth being shipped out of State and even out of the country, creating jobs overseas instead of here in Washington State.
In shifting the tax burden to our middle class, and causing the firing of thousands of public servants, these massive tax exemptions for billionaires do not create jobs. Instead, they cost jobs. None of these billions in tax breaks resulted in any jobs. Instead corporations used these windfall profits to outsource jobs out of Washington State.
This past year, Microsoft recorded a record profit of $20 billion dollars on record sales of $60 billion dollars. Had they paid a normal 1.5% Gross Receipts Business Tax like any other business in our State, they would have paid about $1 billion in State taxes. This entire amount could have been deducted from their federal taxes – meaning they still would have recorded nearly $20 billion in profits – the greatest profit in the history of our planet.
However, because Microsoft millionaires dominate Olympia, Microsoft was not required to pay their fair share of State taxes. According to Representative Orcutt, Microsoft should not be required to pay taxes because they are “struggling to put people back to work.”
In fact, of Microsoft’s 60,000 employees, less than 1,000 are actually from the State of Washington. So we are giving them $1 million in tax breaks for every person they hire from our State. If this is not insanity, I do not know what is.
Microsoft is not alone in experiencing record profits. With second-quarter earnings largely in the books (99% of S&P 500 companies have reported for Q2 2011), today’s chart provides some long-term perspective to the current earnings environment by focusing on 12-month, as reported S&P 500 earnings. http://www.chartoftheday.com/20110916.htm?A
Since its Q1 2009 low, S&P 500 earnings have surged (up over 1000%) and currently come in at a level that is greater than what occurred at the peak of the dot-com bubble and very near what occurred at the peak of the credit bubble. It is interesting to note that the original run up in real earnings from Great Depression lows to credit bubble highs took over 78 years. The current spike has taken 26 months.
For more information, see Washington State Revenue Declines by another $1.4 billion and visit Real Washington State Budget Info (http://realwashingtonstatebudget.info/)