One of the largest recipients of federal government contracts paid nothing in taxes last year, according to an analysis from the Center for Effective Government, a left-leaning think tank.
Boeing reported an $82 million tax refund last year, but made $5.9 billion in U.S. pre-tax profits during the same period, the analysis of the company’s recent government filings found. That means Boeing paid a federal tax rate of -1.4 percent. At the same time, the company won 4.4 percent of all federal contracts last year, according to the report.
“Companies that live by the taxpayer purse should be contributing to the welfare of the states and paying their taxes,” said Scott Klinger, the author of the report. “The fact that we have major federal contractors that are consistently not doing that should raise questions for our legislators about how this could be.”
The company has a history of using loopholes to lower its tax bill, according to Matt Gardner, the executive director of the Institute on Taxation and Economic Policy. The report found that Boeing paid a tax rate of -0.4 percent over the past five years.
Boeing makes an interesting argument. Tax breaks for corporations really are quid pro quo arrangements. The State gives them tax breaks and, in return, they are expected to provide jobs. Boeing fulfilled its end of the bargain so why criticize them? On the other hand, one could make a legitimate argument that these tax incentives are far too generous especially when we wind up owing them money.
Arguments for it are firmly rooted in trickle-down economic theory so how many years of individual income tax receipts derived from these new workers/positions would it take to break even with, let alone surpass, the $82 million we purchased the jobs for? Decades? Centuries? Seems to me the way things are results in a net loss in tax revenue.