Saturday, April 2, 2011

Boeing - Another Corporate Tax Cheat

If politicians get corporate money to elect them, how can we ever expect the politicians to change the tax code to make corporations pay their fair share of taxes? The Republicans claim the corporate tax rate is too high, and wants to lower it. But if corporate taxes aren't being paid at all because of all the loopholes in the tax code, what difference does it make what percent the corporate tax rate is?

Economist Martin Sullivan explains how U.S. corporations are shifting their profits overseas. Sullivan knows tax policy, having worked in the the Treasury and on the staff of the Joint Finance Committee. He is also an advocate for a fairer, simpler, and more economically efficient tax system.

Too many major U.S. corporations have not paid their fair share of taxes, but the Republicans want us to think that a local school teacher in Wisconsin is at the heart of all our government's budget woes.

American taxpayers have been subsidizing major American corporations for years for HUGE profits to enrich the very few on their company's Board of Directors*. So, just like GM, by de facto, aren't these big businesses already nationalized?

* Boeing's CEO Jim McNerney had a total compensation package last year of $19.7 million, but as personal income (capital gains on stock-options) he paid a lower tax rate than someone mopping the floor in the high school gym. And the company he runs (Boeing) paid no taxes at all. Why is that?

Maybe Boeing has had a problem with frivolous lawsuits from their employees. They donated $100,000 to the Committee for Workers’ Compensation Reform. And Boeing also donate $75,000.00 to an organization called "Defeat 1098", an state income tax initiative where their corporate headquarters was located in Seattle, Washington (before they moved to Chicago, Illinois to get better tax breaks.) Corporations always pit local governments against one another to woe them to their state.

Illinois agreed to provide Boeing with up to $41 million in tax breaks and various state grants over 20 years, while the city of Chicago offered an additional $19 million in property-tax relief over a similar period and a $2 million grant. More corporate welfare. I can just envision Boeing's CEO on the street with his hand out, begging like a pauper...when the REAL impoverished Americans - those that are unemployed and on food stamps - are having their income taxes paid to Boeing.

Despite reporting nearly $10 billion in domestic pre-tax profits between 2008 and 2010, the Boeing Corporation, which was granted a contract worth as much as $35 billion to build airplanes for the federal government earlier this week, did not pay a dime of U.S. federal corporate income taxes during this three-year period.

But still, Boeing complains: About their tax breaks, their employees being hurt on the job, and having to pay state taxes to help maintain the infrastructure of their local community.

Boeing has 158,000 employees on 5 continents, in 70 countries - - - so we're not talking about a small mom-and-pop start-up business that needs a small business loan from the SBA - so that they can realize the American Dream. We're talking about billions of dollars in government hand-outs to an already successful multi-national conglomerate that's been in business for almost a century!

And because Boeing is so diverse, they spread their campaign contributions around between the Republicans and the Democrats, so political support for any legislation, tax breaks, and government contracts will most likely be favorable for them.

Citizens for Tax Justice (which counts the presidents of UAW, AFSCME and the AFL-CIO as board members) also referenced a 2008 Government Accountability Office report that asserted that Boeing had 38 subsidiaries in jurisdictions considered tax havens, including 16 in the U.S. Virgin Islands alone.

Now Boeing is using the "global assembly method" (outsourcing) to build its new 787 Dreamliner to compete with the European Union's Airbus, but a major problem was not just the assembly from parts built around the world, but the actual design. The 787 is the first jet in Boeing's 91-year history designed largely by other companies.

Boeing received at least $5.3 billion in subsidies from taxpayers to develop its 787 Dreamliner and other jet models using research and development grants provided by NASA and the Pentagon (paid for by taxpayers) which contributed substantially to the technologies used in building the 787, Boeing’s latest flagship aircraft.

Just several weeks ago, the United States Defense Department rewarded Boeing a $35 billion contract to supply the Air Force with new aerial refueling tankers. The $35 billion could end up being a first installment on a $100 billion deal if the Air Force decides to purchase more aircraft. Boeing has spent $5 million on print advertising to promote its version of the tanker.

Single-aisle jets such as the 787 Dreamliner are expected to represent more than half of the roughly $3.6 trillion in anticipated new aircraft sales over the next 20 years, according to industry estimates.

How are those Bush Tax Cuts helping average American's budgets? How are our federal and state deficits doing these days? How many jobs has Boeing created in America during the Great Recession? This is what the GOP (and Tea Party) is all about - corporate interests, not the people's interests.

But the Republicans (and the Koch brothers) want to blame it all on a local Wisconsin school teacher.


UPDATE: Again, as usual, it takes taxpayer's money to fund corporate enterprises. Is this the "free market" and capitalism we hear so much about from our politicians? Or are these "state-sponsored investments" really Socialism?

"The broker, Morgan Stanley, believes that increasing gas prices and promises of governmental support for alternative fuel vehicles may help launch Tesla to global success as America's fourth automaker." SOURCE

I wonder if the taxpayers will get the same "deal" that they got with all the other corporate and bank bailouts.

Where's all that money on the "sidelines" (what is it now, $2 trillion?) that the wealthy aren't investing and creating jobs with because of "uncertainty in the market"? Are the taxpayers supposed to be much bolder with THEIR money? Do THEY get to take turns globe-trotting around the world in the company jet? With our federal deficit already in the tank, how can we afford more corporate welfare at the expense of people who need food stamps just to eat?

Maybe GE would like to invest in this new car...they don't pay taxes either and have lots of extra cash spend.

3 comments:

  1. Deal could settle Boeing plant fight

    http://www.politico.com/news/stories/1111/69477.html

    ReplyDelete
  2. UPDATE:

    NEW YORK TIMES: "When the Boeing Company announced its far-reaching, precedent-setting agreement with the machinists’ union last week, all the talk was about the ushering in of a new era of labor peace between a company and union that were long known for their horrendous labor relations record."

    http://economix.blogs.nytimes.com/2011/12/05/the-search-for-an-era-of-labor-peace/

    ReplyDelete
  3. Dow member Boeing Co. announced that Abu Dhabi-based Etihad Airways, the national airline of the United Arab Emirates, ordered

    10 of BA's 787-9 Dreamliners and two of its 777 Freighters. The deal is valued at a combined $2.8 billion at current list prices, making

    Etihad the world's largest airline customer of the 787-9 aircraft.

    ReplyDelete