The Stand

Boeing ♥s Ryan’s tax cuts, as long as no job strings attached

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By JOHN BURBANK


EVERETT (August 24, 2017) — House Speaker Paul Ryan will come to Everett on Thursday to tour the Boeing factory here and make a case for lighter taxes on corporations. “Lighter taxes on multinational corporations will mean more jobs,” he’ll say, smugly pursing his thin lips.

Only problem: Boeing gets huge tax breaks in Washington already. And it’s hemorrhaging jobs. Taxpayers are basically paying Boeing to lay people off.

Paul Ryan is like the Big Bad Wolf trying to convince the Three Little Pigs that investing in a slaughterhouse will turn their fortunes around.

It’s bad enough that Boeing cowered as other corporations pulled out of Trump’s Manufacturing Jobs Initiative over his racist and anti-Semitic cheer-leading. The leaders of Intel, 3M, Merck, Under Armour, the AFL-CIO, and the Alliance for American Manufacturing all said they could not continue in good conscience as Trump sided with neo-Nazis. But not Boeing. Boeing was silent.

Boeing is very cozy with Trump. Boeing CEO Dennis Muilenburg has regularly travelled to Mar-a-Lago and Trump Tower for private meetings with Trump and they’ve spoken on the phone dozens of times. After 100 days in office, Boeing took out full page ads in The Washington Post, The New York Times and The Wall Street Journal, praising Trump’s commitment to business interests.

Boeing continues to reap the rewards of sucking up to Trump. A fancier word would be sycophancy, servile and self-seeking flattery.

But never mind. Boeing’s stock price has increased from $159 on Inauguration Day in January to $235 this week. Boeing is leading the Wall Street boom, with 5,700 planes on back order and its first half-year net earnings exceeding $3.2 billion. The Trump administration has set aside $1.1 billion in the federal budget for 14 Boeing Super Hornet fight jets and is contracting with Boeing for new Air Force One jets. Low interest rates are encouraging air carriers to order new fuel-efficient planes for their fleets.

So Boeing doesn’t want to offend the president. And Boeing certainly doesn’t want to mess up any relations they have with elected leaders in South Carolina, where Boeing has built a new airplane manufacturing facility. Before 2013, South Carolina’s employment numbers were just a blip in Boeing’s totals. Now employment in that state exceeds 7,000.

That’s great for South Carolina, but Washington has given Boeing tons of tax breaks. Where are our jobs?

Boeing employed 104,000 workers in Washington in 1998, and then we started giving them more tax incentives. The Legislature gave a $3.7 billion tax exemption to Boeing in 2003, and then piled on with an $8.2 billion tax exemption in 2013. Now, Boeing employs a fraction of what they used to — 67,000 — and is shedding about 6,000 jobs a year.

Boeing used this $12 billion in Washington state tax breaks to invest in South Carolina. In 2009, Boeing broke ground on the new, 1.2 million-square-foot 787 Dreamliner final assembly and delivery line facility. In 2014, Boeing broke ground on a new state-of-the-art, 256,000-square-foot painting facility. That opened in late 2016. Now the company can take away more jobs and production of the 787 from Everett, without losing a beat.

This is Boeing’s corporate citizenry. Grab billions from the state of Washington, and ship that money out of state or into the hands of investors.

At the federal level, Boeing receives the eighth largest tax subsidies of any corporation. In nine of the last 15 years, Boeing has a negative tax rate. In 2013, the U.S. government wound up owing the company $199 million. In 2003, Boeing’s negative federal tax bill was $1.7 billion! That’s yuge!

Paul Ryan wants to cut the tax rate on corporations, saying that it will bring jobs. But our history with Boeing shows that is anything but true. We’re giving up our livelihoods for corporate welfare and bigger stock returns.

Let Paul Ryan come here and huff and puff over false projections of job growth. But don’t let him blow our house down.


burbank-john

John Burbank is the executive director and founder of the Economic Opportunity Institute in Seattle. John can be reached at john@eoionline.org.

Short URL: http://www.thestand.org/?p=59991

Posted by on Aug 24 2017. Filed under OPINION. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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