Boeing gets the best tax breaks given to a company among the states. Is it a good deal? Please vote in the Friday poll — stay for the links and haiku.
The Seattle Times recently revealed that Boeing saved $305 million on state taxes last year alone as part of the massive incentives given to the company.
Boeing officials point out that the company spent $13 billion in 2015, making it a good deal. Critics say the tax breaks are happening even as Boeing is drawing down employment here. From a high of more than 86,700 in November 2012, Boeing employed 77,671 as of March. Additional reductions are expected later this year.
Washington first gave incentives in 2003, then extended them in a hurry in 2013 to win the 777X. Running through 2040, the breaks are estimated at $8.7 billion. That makes them the biggest such incentives extended by a state.
What do I think? These deals inevitably pick winners and losers. This one helps Washington keep one of the world’s most coveted high-end economic assets.
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Until companies are penalized or prohibited for setting states against each other in the incentives game, Washington is getting a good deal. A requirement for job creation would be nice, but the suits in Chicago probably wouldn’t go for it. Boeing has tremendous talent and sunk costs here. But that doesn’t mean that the company wouldn’t have built airplanes elsewhere without the tax deal.
Boeing is also the foundation of Washington as an export powerhouse. On the other hand, the state tax system was crafted for an old-style manufacturing economy, which doesn’t exist anymore. Revenues and needs are out of whack. And no matter how much Boeing spends here, that doesn’t pay for public goods such as schools and infrastructure.
What do you think?
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This Week’s Links:
• Inside today’s March unemployment report | Jared Bernstein
• Nike’s Phil Knight confused his net worth with U.S. economic growth | The Intercept
• One million manufacturing jobs was not a ridiculous goal | Beat the Press
• The mythology of Trump’s ‘working class’ support | FiveThirtyEight
• Falling job tenure | Tim Taylor
• Raise wages, kill jobs? | The Big Picture
Today’s Econ Haiku:
Visiting our state
A critic of today’s trade
Will that trump passions?