The Warped US Tax System: Taxpayers Subsidize Their Own Destruction

[Omaha Steve]

http://www.thenation.com/blog/160129/warped-us-tax-system-taxpayers-subsidize-their-own-destruction

Allison Kilkenny
April 24, 2011

One of the more interesting battles being waged right now is between labor and Boeing, the aerospace and defense corporation. The Nation Labor Relations Board accuses the company of illegally retaliating against its largest union when it decided in 2009 to put a second 787 Dreamliner assembly line in a nonunion plant in South Carolina.

Originally, Boeing intended to construct the Dreamliner in Washington, but only if the state approved a 20-year, $3.2 billion package of tax credits. Officials ultimately conceded, but Boeing took its toys and went to play elsewhere anyway when South Carolina lured it across state lines with the promise of a whopping $900 million subsidy package AKA taxpayer dollars, and a nonunion plant to set up shop in.

Boeing also happens to be one of the shining examples of government-subsidized businesses that pay meager amounts of state and local taxes. In 2010, Boeing received a net tax refund of $137 million from state and local governments despite earning more than $4 billion in pretax profits.

The company has always defended these kinds of practices by claiming it’s a great jobs generator. Of course, one need only glance at South Carolina’s jobless statistics, which are well above the national average, to see that claim stands on shaky legs. In a state that provides some of the least generous jobless benefits in the union, it’s difficult to see just how shelling out massive subsidies to an anti-union company like Boeing provides for a majority of South Carolinians.

FULL story at link.

[xchrom]

1. recommend

[Scuba]

2. I'll bet Jim DeMint defends it. n/t

[msongs]

3. the "dreamliner" has turned into boeing's nightmare nt

[Spoon]

4. Yet another reason why taxing of corporations is downright ridiculous.

It leads to the manipulation of said tax policy by politicians eager to play favorites with large donor corporations and/or perceived big voting blocks.

Not to mention, corporations do not pay what taxes they wind up being responsible for. They pass the cost to the end user, i.e. you and me, in the form of higher prices.

Instead, increase taxes on investment income, if you really want to hit the stock and bond holders of said corporations. Also while you're at it, get rid of the gas tax, and implement a modest national sales tax instead.

[Lorien]

5. Those GOP talking points don't fly

If corporations are "people" then they must pay their fair share of taxes. Once they are forced to pay taxes, then they'll need to come up with ways of finding tax breaks; by spending. They'll expand and hire to reduce their tax burden. I'm a small business owner, and I buy equipment and sub contract because both expenses are tax deductible. Corporations will not "pass the expense on to the consumer" in a free market system where competition exists...and least that's been the popular GOP theory for years, except when they argue against taxing their beloved corporations.