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Since 2001, the Boeing Corporation has enjoyed a cumulative $52.5 billion in pretax U.S. profits, but it hasn’t paid a dime in federal or state income taxes over this period.
Yet Roy Conner, president of Boeing Commercial Airplains, said earlier this month the company needs to compete on a “level playing field” when discussing the future of the Export-Import Bank of the United States. Boeing is intensely lobbying Congress to renew the bank’s charter.
Setting aside debate over the merits of the Ex-Im Bank, which ceased new financing activities this month because Congress allowed its charter to expire on June 30, it’s worth noting that Boeing has been remarkably effective in leveraging the U.S. tax system to avoid anything resembling a level playing field with other American corporations.
The company has received $757 million in federal tax rebates and $55 million in state tax rebates since 2001. Put another way, the company’s has not paid a penny in federal and state income taxes for the past 14 years.
In fact, the company’s cumulative 21st century income tax rates are negative 1.4 percent in federal income taxes, and negative 0.1 percent at the state level. This astonishing record of tax avoidance came during a period in which the company was consistently profitable, never reporting less than $1 billion in annual U.S. profits over the past decade and a half.
Boeing of course is not alone in this rampant tax avoidance. Many big, profitable corporations are finding ways to pay far less than the 35 percent statutory federal corporate income tax rate. A 2014 study from Citizens for Tax Justice and the Institute on Taxation and Economic Policy found that consistently profitable Fortune 500 corporations paid an average effective tax rate of just 19.4 percent of their U.S. profits in federal income taxes over a recent five-year period, little more than half the statutory tax rate.
But Boeing has far outpaced most of corporate America in its ability to create its own “competitive advantage” through the tax system.
It is in this context that senior Boeing officials are lobbying Congress to reauthorize the Export-Import Bank, the federal agency created 70 years ago to subsidize loans for American corporations’ foreign customers. The company’s aggressive lobbying is hardly surprising; the Ex-Im bank is colloquially known as the Bank of Boeing because half the bank’s loans go to Boeing customers.
Those seeking to bury the Export-Import Bank, including Texas Sen. Ted Cruz, argued earlier this week at a press conference that the bank’s functions constitute “corporate welfare.” Unfortunately, these lawmakers haven’t applied these same principles to the generous tax breaks Boeing receives at the federal and state level that allow it to handsomely benefit from the U.S. system.