Washblog

Washington Tax Fairness Coalition: "Hold Big Oil Accountable!"

Unfair to the middle class, the poor, and to businesses
Washington State has the most regressive tax system in the nation. (Institute on Taxation and Economic Policy, 2003).  That means that the poor, the middle class, and businesses are paying much more than their fair share.  And with our shrinking tax base, we're all getting less back for our investments.  It's a situation that just can't go on.  But it does --- decade after decade.  Washington's history of tax woes takes up 15 pages on History Link.  In 2006, we're still struggling for basic tax fairness -- just like the Washington State Grange and other reformers were back in the 1890s.

When I'm out doorbelling, I meet some tired looking people, people who work too hard and worry too much about money.  I know that people in poor and middle class neighborhoods pay a significantly higher share of property taxes than people in wealthy neighborhoods. I believe that our unfair tax system is a major source of political trouble in Washington, affecting health, the environment, infrastructure, security, and our ability to work out our problems together.  So when I learned recently that Washington Tax Fairness Coalition had hired Barbara Flye as its new Executive Director and was gearing up for a renewed effort, it was good news to me.  

Last year, I had heard Barbara neatly dismantle pro-I-330 arguments in a debate at my church. And I had come away from that experience with admiration for her quiet, focused, and unflappable presence. Many people had expected I-330, which limited injured patients' right to sue, to be voted in. But it lost 43% to 57%. I had little doubt that Barbara's leadership on that difficult and high-stakes campaign played a large part in our victory. Last week I met with Barbara and Juan Martinez, WTFC's new Organizer, for coffee.   Where's the Tax Fairness Coalition headed, I asked? Their answer: a "Campaign to Hold Big Oil Accountable".  YES!

Oil Companies Reap Obscene Profits in WA
Five oil companies, BP, Royal Dutch/Shell, Conoco, and Tesoro, have refineries located in Washington state that produce close to 600,000 barrels of petroleum products a day.  They make about $20 in profits for each barrel.  That's $12 million per day, in profits alone, leaving our state.  Profits for the major oil companies in 2005 were nearly three times greater than their 2002 profits.  

"Washington citizens and businesses are paying historically high prices for gasoline while the major oil companies are reaping windfall profits.  As a result, hundreds of millions of dollars are being taken from the budgets of families and businesses and exported out of our state every week....Washington state has the authority to create policy to capture some of the windfall profits of oil companies, invest these profits in renewable energy, and regulate gasoline prices."

Sources: Regulating the Oil Industry and Corralling Oil Industry Profits, John Burbank, Economic Opportunity Institute, February, 2006; "The Campaign to Hold Big Oil Accountable": Fact sheet, Washington Tax Fairness Coalition

 Fuel Prices Force WA Families out of Business
I'm Alex MacGregor.  Mr. Secretary, Representative McMorris.  I'm proud of a remarkable bastion of family business, the men and women who, with their families, farm 97 percent of the arable acres in the Pacific Northwest.  Yet, I've never seen spirits as low as they are today...

Senator Roberts of Kansas described these times as a category 5 hurricane of fuel and fertilizer prices.  We're losing three or four farm families in many of our communities this winter.  Slowing the exodus, providing some hope has to be job number one.  

Some growers have had to pledge the cash value of their life insurance to get an operating line of credit.  Families have seen for the first time since the Great Depression a bushel of grain worth less than a gallon of fuel...  Emergency energy assistance is urgently needed....

From testimony at the Washington State Farm Bill Forum in Cheney, Washington, 2005

What will we accomplish by holding big oil accountable?  Well, a victory for basic fairness, first of all.  Of more immediate relevance for our daily lives, WTFC tells us that we can secure over $600 million a year to help schools, hospitals, and local governments meet rising energy costs.  And we can invest further in developing renewable energy resources to bring our state more jobs, more economic independence, and cleaner air. The Economic Opportunity Institute cites other possible benefits, including the reduction of business and occupation taxes across the board and reduced gas prices.

Barbara and Juan - with the backing of the 74 member organizations in their coalition, are well suited to lead this new campaign.  Before heading up the No On I-330 campaign, Barbara was the Executive Director of Washington Citizen Action.  She's been organizing for 16 years, starting with a gig managing a successful long-shot campaign for a state Representative straight out of college and moving on next to direct, on-the-ground action with ACORN.   Juan was a congressional staffer specializing in housing, homelessness, and consumer affairs with Representative McDermott, a case manager with DSHS in Belltown, and President of Local 843, WFSE, AFL-CIO.

The tax fairness movement, Barbara explained, must be driven by grassroots citizen action. To be successful, we must go beyond those organizations and people who have been traditionally been involved -- and engage the whole range of citizens who are affected. Holding big oil accountable is a natural first step.  It is not difficult for any of us going broke on our fuel bills while oil companies make record profits -- to see that this is unfair.

In this time of political turmoil, it is also right to ask when Washington citizens are going to learn to work together to take charge of our common destiny. When are we going to work together to protect our families, businesses, and environment? Surely, we're not going to continue to fight about ideology forever as we struggle with increasingly challenging issues. The Economic Opportunity Institutes' recent report,  Regulating the Oil Industry and Corraling Oil Industry Profits, invokes our citizen authority to take matters into hand:

Washington state has the authority to create policy to capture some of the windfall profits of oil companies, invest these profits in renewable energy, and regulate gasoline prices.

Some resources

  • Unintended Consequences, Donald Hopps, Ph.D., Institute for Washington's Future.  This editorial is a good backgrounder on how our chaotic tax reform dynamic perpetuates our tax misery.
  • The 2002 study commissioned by our state legislature, Tax Alternatives for Washington State (AKA Gates Study), concluded:  "... our current system is fundamentally inequitable to low- and middle-income people, unfair to many businesses, and subject to sharp fluctuations in revenue. "
  • The Institute on Taxation and Economic Policy in its 2003 study, Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, concluded that Washington had the most unfair tax system in the nation and that it was soaking the poor and middle class and sparing the rich.
  • Economic Opportunity's 2005 report: Reforming Washington's Tax System: Where Do We Go From Here?, by Marilyn P. Watkins:  People in the lowest one-fifth of the state's population pay 18% of their   in state and local taxes, the middle class pays 11%, while the richest 1% pay just 3%.

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Noemie,

Great post, hadn't heard of this coalition, but they've got great backing.  Barb Flye is excellent and the steering committee is very strong as well.  

The links were great too, this description of why sales tax is so regressive is amazing.

http://www.itepnet.org/wp2000/text.pdf (which is a comparison of the tax structures of all 50 states)

Sales and excise taxes are the most regressive element in most state and local tax systems. Because sales taxes are levied at a flat rate, and because spending as a share of income falls as income rises, sales taxes inevitably take a larger share of income from low- and middle-income families than they take from the rich.5 Thus, while a flat-rate general

sales tax may appear on its face to be neither progressive nor regressive, that is not its practical impact. Unlike an income tax, which generally applies to most income, the sales tax applies only to a portion of income that is spent--and exempts income that is saved. Since the rich are able to save a much