Seattle University's Socialist Econ Professor / Candidate

An article in the Seattle Times talks about a lawsuit by Kshama Sawant. She filed to run in the 43rd L.D. position 1 and was endorsed as a write in candidate for the 43rd L.D. position 2. She finished 2nd in both primaries but can only be on the ballot in one race. So she picked position 2. State law says a write in candidate can't show the political party. Ms. Sawant is a member of the Alternative Soclialist Party. Ms. Sawant also does not think the current rules should apply to her and wants the party affiliation listed on the ballot and has sued. Now I will skip all discussion on the sanity of someone thinking that listing Alternative Socialist Party on the ballot will actually help them because, well it is Seattle after all so maybe it would help.

Here is my issue with the story. Ms. Sawant is an econ professor at South Seattle C.C. and Seattle University. The Alternative Socialist Party candidate is an econ professor at Seattle University, the school where I earned my degrees. OK, whatever, as long as I guess you understand econ and is not promoting some wacky ideas, like privatizing successful businesses that have created substantial wealth in the area...

•Break the power of Wall Street and Corporate America! Take the giant corporations that dominate Washington state such as Boeing, Microsoft, and Amazon, into public ownership under democratic workers' control to be run for public good, not private profit.

Oops... guess not.

Is Jay Inslee a Tax Cheat?

Jay Inslee released his tax returns... and by released, I mean he let accredited reporters see some documents, not the voting public.

What the reporters have permitted us to learn was that Jay Inslee does not appear to be much of a manager of his own money. While reporting a household income of $237,000 in 2011, putting him in the top 2% of households in the country, he had to borrow from an IRA to replace his roof. Anyone who has an IRA knows that withdrawing money early from an IRA incurs a penalty. So Mr. Inlsee withdrew $45,000 and paid a penalty of $10,000 as a result. Seems like someone who is 60+, an attorney, has been bringing in a significant amount of income for a number of years should have other ways to come up with the money. Especially when it was used to replace a roof, an expense that is almost always anticipated many years in advance. But poor money management by someone who wants to run for Governor of the state of Washington is not the point of this post. Also included in the Seattle Times article is a mention of a loss incurred on a membership in a country club.

They also reported a loss on a membership in the Wing Point Golf and Country Club on Bainbridge Island. The tax returns show the couple acquired the membership in 1988 and sold it in 2009, reporting a $5,500 loss.

Now I am not a tax attorney but I am curious why exactly would a loss on a country club membership need to be included on a tax return? Did they take a deduction from the loss? If so, the question is under what circumstances would a loss from a sale of a country club membership qualify as a legitimate write off? If it was for personal use, I can't imagine that it would be allowed. I called the Inslee office but nobody has got back to me. I emailed the Seattle Times reporter but no answer. Its impossible for me to know the answers to my question since the tax records that were "released" are not available to the voting public.

Update: The Seattle Times reporter replied that he had to go to get a copy of the return and did not know of any restrictions on what he could do with the copy. He had not scanned what he has as of yet. Has not had the time to look into anything regarding the country club loss.

Update2: I called the country club and asked about membership and they only have equity memberships. To join you buy an existing share and pay an initiation fee. I was told there are a number of current members selling shares at no cost. Initiation fee is $5500, which of course is the same amount listed as the loss on the tax form. Which makes you wonder if the amount listed as the loss was on the stock, which just happens to match the initiation fee, or if it was in fact the initiation fee. If they are claiming a loss on an initiation fee, then that would raise even more questions as it should have been clear that was not an amount they would ever receive back and would in no way be seen as a capital loss. As I have said, I am not a tax attorney, I don't know the answers to these questions. I do think they are legitimate questions that should be answered.

Update3: Dori Monson covers the story. Thanks to Orbusmax for letting me know and for the link. Mr. Inslee's spokesperson seems to be confused between the concept of a country club membership and what Mr. Inslee has, an equity membership. Some country clubs are equity clubs. When you buy a membership, you are buying ownership, stock, in the club. Some clubs are non equity, your membership does not include any ownership. Some clubs have both membership options. Mr. Inslee's club is an equity club. As I stated previously, those current members who are selling their stock are doing so today for $0. As I also mentioned, for this club, to buy stock, you also need to pay an initiation fee to the club which is currently $5500. The amount of the loss Mr. Inslee stated on his tax return... wait for it... $5500. Sure, it could be a coincidence but it seems like there is a reasonable chance that Mr. Inslee deducted his initiation fee from his taxes and not a loss in his equity ownership stock. So once again, I am not a tax attorney but my best guess regarding the probability of legitimately deducting an initiation fee from your taxes is somewhere between 0 and 0. Now if the loss really was from an equity ownership, the probability in my opinion of that being a legit deduction on personal taxes would be approximately 0.

Andrew Breitbart

He inspired me to stick up for what I believe. It was a shock to hear this morning of his passing. This afternoon I was dropping off a package at UPS here in Seattle when another customer was ranting to the help about how it was "the bankers" who were behind all of the global financial problems. And by "bankers", I am fairly certain what he meant was "the Jews". And I said nothing. After I was out the door, on the way back to the office, I thought what I should have said was..."well maybe what we should do is find all of those "bankers" who held a gun to everyones head and forced them to borrow money... oh that's right, none of them did." And I felt horrible that I did not have the guts to confront him and ridicule him in public like he deserved. Because I did not want to put myself out there. Never again do I want to feel that way.

Never again, Andrew, never again.

You will be missed.

1000 Days Without a Budget

I noticed this morning that this was day 1000 without a budget for the U.S. government. Later I saw a video of Senator Kent Conrad, D-ND, chair of the Senate Budget Committee claiming to correct the falsehood that we have not had a budget for 1000 days. His reasoning is the Budget Control Act of 2011 is a budget. Click here to watch for yourself.

Now you may be asking yourself, "The Budget Control Act of 2011? What exactly is that?" Well its S. 365, also know as the law that came out of the debt ceiling debate we had in August that led to the infamous debt super committee right before we were downgraded... or as my Congressman Jay Inslee said, which helped us avoid a downgrade. Wrong again Jay.

I called the Senate Budget committee asking where I could see the budget that Senator Conrad insists was passed. Got a call back and was told they would send me a link to the actual budget and that yes indeed it was an actual budget, not a continuing resolution. Great, can't wait. Here is the link. The link is to S. 365, "an act to provide for budget control". In addition to allegedly containing the entire U.S. budget, it also covers:

1) 10 year discretionary caps
2) Vote on balanced budget amendment
3) Debt ceiling process
4) Deficit reduction
5) Pell grant and student loan

Seems like a lot for 28 pages. Seems to me that the U.S. budget alone would take more than 28 pages.

So I took a quick look at the document to see how much money we were going to spend on the Department of Education. No mention. The word Education comes up 4 times in reference to the Higher Education Act of 1965. What about the Department of the Interior. The word Interior does not appear. What about Health and Human Services. 1 reference where it states that "If a bill or joint resolution making appropriations for the fiscal year is enacted that specifies an amount for the health care fraud abuse control program at the Department of Health and Human Services...", then it goes on to set caps for the amount that can be included in the bill or joint resolution. It does not budget anything for HHS, just caps the amount that can be spent on HHS' fraud abuse control program.

So I replied back to Director of Planning and Outreach for the Senate Budget Committee asking where exactly is the budget part in this budget. Where does it specify how much is going to be spent on what? I am awaiting a reply.

I also called the local office of Senator Patty Murray who is on the budget committee and asked where I could see the budget and I was told they would have to research that and let me know.

Jay Inslee Says His Vote Avoided A Downgrade

I called my Representative, Jay Inslee, about 6 weeks ago asking about his involvement in the debt ceiling talks. I received a reply yesterday.

Rep. Inslee says his vote avoided a downgrade and then goes on to let me know about the additional spending he was able to save or increase as part of the debt deal.

Here is the letter:

August 23, 2011

Dr. Mr. XXXXXXXXX

Thank you for contacting me with your concerns over the agreement reached to raise the statutory federal debt limit. I appreciate hearing from you.

On August 1st, I voted in favor of S.365, the Budget Control Act of 2011 to prevent an economic disaster. This bill was unfortunately an unbalanced proposal that doesn't meet the expectations that the American people have for solutions to the debt problem. But because passage was necessary to avoid serious harm to our economy and because this bill takes steps to reduce our deficit, while protecting Social Security, Medicaid, Medicare and education, the right solution was to move forward.

This legislation will allow increases to the statutory federal debt limit estimated to last until 2013 while directing more than $2.1 trillion in cuts to federal spending over the next ten years. House leaders from both parties were able to come together with President Obama on an agreement that has averted a predicted downgrade of U.S. bond ratings and other harmful economic effects associated with the inability of the Treasury Department to provide funds for Congressionally-ordered expenses. I think from this point forward we must focus on growing the economy and creating jobs to put our fiscal house in order.

It is unfortunate that such decisions are being made during this difficult time for the American people. Our economic challenges can only be solved by a balanced and fair approach, which is why I voted against extending the Bush tax cuts for the wealthy. We must also look to responsibly downsize our federal budget without putting our most vulnerable citizens at risk, which is why I support our social safety programs and education that will aid our economic recovery.

I am dedicated to preserving the solvency of Social Security, Medicaid and Medicare. Social Security is one of the most successful poverty reduction programs in United States history. Fewer than 12 percent of older Americans today fall below the poverty line, without Social Security that number would be nearly 50 percent. I believe we have an obligation to provide both current and future retirees with public retirement benefits that they have paid into through hard work over their lifetimes.

You may be interested to know that during the debates on health reform legislation, I fought hard to include language in the final package that will help correct the geographic inequities in Medicare reimbursement rates that have long hurt both Medicare enrollees and caregivers in Washington state. The agreement, negotiated with Speaker Pelosi and the White House, will provide $800 million to providers and hospitals that are currently under-reimbursed in Medicare yet perform high-quality care. I also supported H.R. 2, the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) which seeks to enroll 4.1 million new children in the Children's Health Insurance Program (CHIP) and Medicaid, bringing the total number of children covered by the program to over 11 million.I also strongly believe that we must adequately fund our education priorities because our children's education is too important of an investment to underfund. With regard to concerns about student aid, I want you to know that I am a strong supporter of the Pell Grant program and this agreement includes enough new funding to maintain the maximum Pell Grant at its current level, despite increases in student enrollment.

Education is one of my top priorities in Congress and I will continue to do everything I can to improve learning environments for students, teachers and administrators in our schools. Like you, I believe that we must address pressing issues in our education system. The federal government has a responsibility to act as a partner to the states and local school districts in order to provide the funds necessary to meet our children's educational needs. You can be sure that I will fight to make sure our students have the tools they need to succeed in school.

Our short term economic crisis and long-term debt problem should be about bringing people together in an honest and transparent debate about how best to marry our principles with economic reality. I will continue to work across the aisle to accomplish these goals.

Again, thank you for taking the time to contact me about such an important issue. For news on current federal legislative issues, please visit my website at www.house.gov/inslee, where you can also sign up to receive my e-newsletter. My office is here to serve you, so please feel free to contact us in Shoreline at 206-361-0233 or in Washington, D.C. at 202-225-6311 for assistance.

Very truly yours,
JAY INSLEE

Beyond the fact that my Representative seems unaware that we were downgraded, my biggest issue with the letter is calling social security a successful poverty reduction program. Anyone who is willing to spend a few minutes to understand how social security works would know that the only ones who really benefit from it are those who would not have been responsible enough to save for their own retirement at all if not forced into this ponzi scheme of a retirement plan. The average senior citizen would have been substantially better off if they would have invested the money in any reasonable secure investment instead of having the money taken to give to current retirees.

And those of us who are responsible are forced to pay into this system and suffer as a result.