According to a report released this week by Citizens for Tax Justice (PDF), Boeing recorded pretax profits of over $4.4 billion dollars in 2010, yet paid a net federal income tax of, um, negative $3 million. That’s right, Boeing’s net federal tax rate for 2010 was -0.1 percent, up slightly from its three-year average of -1.8 percent. (Yes, those are minus signs.)
So of course, that explains why Boeing Vice-President of Tax James Zrust was on Capitol Hill yesterday, testifying before the US House Ways and Means Committee, asking Congress to dramatically lower corporate tax rates:
Everyone here today is well aware that the combined US statutory tax rate is almost 15 percentage points higher than the average combined rate of other OECD member countries. It is our view that significantly reducing the corporate tax rate will improve U.S. competitiveness. We believe lowering the corporate rate would dramatically reduce tax policy pressure and rhetoric by ensuring that U.S. companies are competitive, and importantly, would not tip the scale in favor of foreign production.
So, um, unless Congress reduces Boeing’s corporate tax rate below it’s currently staggeringly uncompetitive negative 1.8 percent, the aerospace giant may be forced to move production elsewhere. Hmm. Where have I heard that threat before?
And this from a company that also benefits from billions of dollars in government contracts. Assholes.
As ThinkProgress points out, Boeing is far from the only highly profitable corporation to pay little or no federal taxes. For example, General Electric has infamously collected over $4.7 billion in tax benefits over the past three years on $7.7 billion in pretax profits. That comes to a net corporate federal tax rate of negative 61.3 percent! That’s the sort of creative accounting that makes Boeing’s Zrust look like H&R Block.
Zrust allows that “tax expenditures should be on the table if a meaningful rate reduction is considered.” But most of the “reforms” being discussed in Congress are revenue neutral at best, or would even cost the government money, increasing deficits. After all, Zrust didn’t go to the Capitol to ask Congress to raise Boeing’s taxes, did he? And with billions of dollars of untaxed profits available to fund its lobbying, we shouldn’t be surprised to see Boeing get what it wants.
They do create lots of local jobs…
We should all bow to our corporate masters and blow them. Cause jobs are kinda important.
Yes, @1 and a lot of those local jobs are directly tied to government contracts, so basically, they’re benefiting from both ends of the system.
If they want the government $$, they should contribute their fair share to the government that provides the $$ they want.
But the jobs mean money and jobs and food for the rest of us. Both sides of the blowjob should benefit right?
This seems like a great thread for a bunch of ragamuffins who’ve never seen the inside of a corporate board room to spout off a bunch of paranoid and ignorant ideas about corporations and the roles they play in society.
Wow, the same trickle-down bullshit Reagan was espousing three decades ago, but this is news apparently because it’s worked so well. Next nuclear power companies will be saying we need to loosen regulations.
you know, until we start assassinating assholes like Zrust, this shit will continue.
I wish I was wealthy enough to afford a lawyer who could manipulate the system into cutting my tax rate to zero, or negative.
A corporatocracy is what The Founders intended, after all.
You know by not paying taxes, Boeing was able to give all its line workers huge raises…. wait a minute.
Rich people don’t “create jobs”. Workers create rich people.
Representative democracy represents boeing and GE. They don’t represent the citizenry. That is the often-told, cold, cruel truth of our country. Can we do something about it? Not really. We could call our representatives, and pretty much beg them for some crumbs, but let’s be honest, we beg, corporations don’t have to, they give orders.
Sure, cut their corporate taxes, but lower their contract payments by the same $ amount.
@7
Or just join the bottom 47% who pay no income tax.
@13
Most of those people are paying payroll, sales, and often state income and other local taxes like property taxes. Any idiot would be able to understand that.
What do they do with their Federal and State tax brakes? They outsource jobs to corporations in other countries who can’t do the work correctly. I like the threat of more outsourcing in the Boeing quote. Go ahead Boeing outsource more of your product and then redo it when it hits the states. The Dreamliner is 4 or 5 years behind schedule, it must be nice to have your incompetence bankrolled by the American people.
@13
Nearly 22% of those making between $50,000 and $75,000 end up with no federal income tax liability or negative liability as do 9% of households with incomes between $75,000 and $100,000. The other 25% wish they made enough money to pay taxes.
I also don’t think it is fair for hedge fund managers to have the privilege to defer paying taxes on their earnings, and if it is taxed it is taxed as capital gains @ 15%.
The other thing @13, is I am sure you were against the bailout, but what it did was bankroll the same jackasses who derailed the economy and should be in jail. The people you defend are criminals who don’t pay enough taxes, Before you get your red white and blue Gay-lib panties in a bunch and begin the blame Obama, remember you will never have that kind of money, NEVER. Freedom is not money, corporations are not people, and not having empathy towards less fortunate people does not make you a grown up. Being a patriot and all, I am sure you would fight for your fellow American’s freedom against a foreign foe, but the less fortunate in this country who you look down on for not paying their fair share are fighting the overwhelming task of not having real representation, they have no lobbyists like Boeing, the poor have no shareholders, or golden parachutes. I am glad that you have used the opportunities this country offers, I am sure that you have had many personal challenges that you have overcome. Good for you, but if you fall on really hard times I hope that I and the rest of America are there to help you because that what being patriotic is to me.
@15
“The people you defend are criminals who don’t pay enough taxes”
I’m paying more than 35% of my income in taxes. To me, that’s too much. But you seem to know how much is enough.
Please tell me.
How much is enough?
@16
You are not a billionaire, that is who I was referring to. If you can make a 25-50 million or a couple of billion you can pay less it seems. Maybe if we enforced tax laws and made corporations pay the freight they really owe you could pay less.
Why don’t you tell me how it should all work? Who should pay taxes and how much?
@17
I’ll tell you how I think it should work, but you get to fill in the amounts since you’re the one who knows how much enough is. Okay?
First. Scrap the whole un-holy mess. Then:
For individuals:
Set a bench mark of how much a household can spend per person tax free per year and index that to inflation. Then tax all non-charity, non-healthcare, non-investment spending above that amount at the same set rate. (In other words, tax individuals on spending above a set limit).
For businesses:
Set a bench mark of how much a business can put into cash reserves, savings or other non-capital investments per employee per year and index that to inflation. Then tax all liquidity above that amount at the same set rate. (In other words, tax businesses on savings above a set limit).
No refunds, credits or subsidies for anyone or anything.
This will encourage individuals to earn and save (and tax those earnings when their spent) and businesses to hire and spend on capital improvements (which are areas of business spending that enable individuals to earn and save).
Now you just tell me the bench marks and the tax rates (how much enough is) and we’re done.
they’re not thier
OK you got me, I don’t know what the tax rates should be, but by your post either do you. You have a frame work of principles which I probably agree with most of, but no numbers. Reforming the tax code is a fantasy under current government structure. When our elected Representatives no longer have to solicit campaign contributions and lobbyist money is illegal we will have an easier time seeing what are paying for and what we need to run the country.
What I don’t understand is how Exxon and GE pay no taxes or get refunds and subsidies but your problem is with the poor? Wall Street needs a 750 billion dollar bail out and the poor are your scape goat. I admit that Government is more complicated than I can imagine and I believe subsides for some programs or industries are needed for the greater good of our society. I am assuming as a Libertarian you don’t really care about the Greater Good, just the bottom line in your bank balance. I being a liberal I think roads and schools (even though I have no kids) healthcare and regulations are important. I would prefer to not have to hold up in my residence with a sidearm and intermittent electricity waiting for daylight to forage for food. I also think that most Libertarians were Bush Republicans and see lower taxes and anti-government as a religion. As long as some suit tells them they will lower taxes and make government smaller they will vote for that candidate. It is funny to me how quickly the libertarians I have encountered distance themselves from Bush until the wars come up and then they are all over the booger eater cod piece from Kennebunkport.
Go ahead and bask in the glory of smiting a liberal “You Gotta”. It must suck to have all the answers but everyone else is crazy and won’t listen.
@20
“Reforming the tax code is a fantasy under current government structure. When our elected Representatives no longer have to solicit campaign contributions and lobbyist money is illegal we will have an easier time seeing what are paying for and what we need to run the country.”
I totally agree.
I got a fix for that too… Term limits.
Campaign finance reform. http://www.washclean.org/
And, @20, I don’t take issue with the very poor not paying taxes, and I do take issue with the very rich not paying taxes. I also take issue with ANYONE that doesn’t pay taxes collecting a tax refund (WTF!?!?) and coming out with a negative rate of taxation.
What does irritate me is someone saying that someone else is not doing “enough” but then cannot say what “enough” is. That seems lazy.
I don’t see the common good and individual good as being incompatible, in fact I don’t believe you can have one without the other but I believe that you cannot have either without individual liberty. I also believe that the primary method of any Government’s function is to eat away at individual liberty, and that like cancer, allowed to spread at it’s own will, Government will consume it’s host. One of the accusations we leveled at King George in the Declaration of Independence was that “He has erected a multitude of New Offices, and sent hither swarms of Officers to harrass our people, and eat out their substance” I see this in every new Czar appointed, Agency formed and regulation dictated.
I find that at core my biggest conflict with Liberals is that we disagree on the benevolence of government and bureaucracy. I tend to distrust ambition, political ambition most of all, and no one rises to high office without hyper ambition.
Also, for the record, I opposed the bailouts at the time and still think they were bad policy and Bush was never “my man” (though given a choice between him and Gore or him and Kerry or McCain and Obama I reluctantly held my nose and voted Republican). As to what you refer to as “points of religion”, the day the Democrats run a convincing small government low tax liberal, I’ll vote for him regardless of his other positions. You are right in that that is my litmus test.
@22
Throw in term limits and treat Union money the same way you treat Corporate money and you have a deal.