Bankers grow fat as teachers are laid off

By Mike Andrew

Seventy-five people – including Ohio Congressman Dennis Kucinich – protested in front of the Chase Bank in Seattle’s Wallingford district May 21.

The protest was called by the Seattle Education Association, Social Equality Educators, and Martin Luther King County Jobs with Justice. It was supported by the Service Employees’ State Council, Working Washington, Washington Citizen Action Network, US Uncut, the Fellowship of Reconciliation, and SNOW.

Chase was targeted because corporate tax loopholes exempt it from many state taxes at a time when the state legislature is cutting essential services to close a $5 billion revenue shortfall. Chase pays no state taxes whatsoever on its mortgage interest income thanks to a loophole that allows banks based in Washington to avoid these taxes.

Chase is based in New York, but Washington Mutual, which Chase acquired in September 2008,was Washington-based, enabling Chase to apply their tax credit to its earnings. Had Chase paid its fair share, it would have added nearly $100 million per year to the state’s revenue.

As part of the federal bailout, Chase was loaned billions of dollars at zero percent interest, money that they are now loaning back to the federal government at 5% interest – actually making money off taxpayers.

Last year, Chase compensated CEO Jamie Dimon with a $1 million base salary, a $5 million bonus, over $6 million in options, and nearly $8 million worth of stock. The $20.8 million total was a 1,500 percent increase over his 2009 income. The average U.S. household income for 2010, in contrast, was just $49,777

On April 16, Bank of America was also the target of a protest picketline. For 2008 and 2009, the banking giant paid no federal income taxes at all and actually received tax refunds of $3 billion. Its CEO, Brian Moynihan, lost money in 2010, when his pay was cut to $1.9 million. Early this year he did get a $9 million bonus, however.

Bonuses paid to executives at the nation's six largest banks totaled $140 billion in 2009, a sum equivalent to the total of all state budget deficits combined.

Meanwhile, 70 Seattle teachers in Seattle are facing layoff as the state tries to fill the $5 billion hole in its budget with cuts rather than raising new revenue.

The legislature is also considering an across-the-board pay freeze for teachers. Funding to reduce class size in schools has taken a 70 percent cut, college tuition has increased, and public library hours are being reduced. Some 40,000 people have lost their Basic Health coverage. More cuts are projected for city, county, and state services.

This is not a spending crisis. It’s a revenue crisis, caused when corporations like Chase pay little to no taxes on their huge earnings. Working people who had no part in creating the crisis are being made to pay for it.

The money to pay for social services is there, enriching banks and bankers. It just needs to be tapped to meet the needs of the people.