Despite reporting $5.9 billion of pre-tax profits in 2013, Boeing paid no federal income tax and claimed $82 million in federal tax refunds- an effective tax rate of negative 1.4 percent. Although Boeing did pay state income taxes, they amounted to just $11 million- a tax rate of just 0.2 percent. Boeing received 4.4 percent of all federal government contracts which amounted to $20 billion in sales. That a company as large as Boeing can pay no income tax, and actually get money back, while taxpayers and smaller businesses pay higher rates is a sign of an absurd and broken tax code.
“When any large corporation makes tens of billions of profits and pays nothing in taxes, it is scandalous. When a company that draws its lifeblood from taxpayer-funded contracts pays nothing to support the government it claims to serve, it is time to change the rules that allow such behavior to continue unchecked.”
Michael LaFaive at the Mackinac Center notes that tax policy is correlated with population migration out of Michigan.
Mackinac Center research focused on Michigan has found for every 10 percent increase in personal taxes an additional 4,900 people leave the Great Lake State annually. So for example, an 11.5 percent individual income tax in 2007 has driven around 29,000 of our citizens away so far – and that’s a conservative estimate.
James Huffman, a fellow at the Hoover Institution, discusses the fairness of providing favorable tax treatment to particular companies over others. The government is not very good at picking winners and losers and, like a bad dinner date, the American taxpayer gets stuck with the bill:
Imagine that one of America’s state legislatures enacts a law exempting a particular company from the state’s corporate income tax. Or imagine that a city within that state adopts an ordinance exempting a particular company from land use regulations and building code requirements.
Close (apparently close means nearly 40 miles) to a SUNY campus? Can your business theoretically contribute to the educational mission of the surrounding colleges that are “near” you? Well, New York has a proposal just for you — no taxes! Check it out below:
The program, introduced two weeks ago during a promotional tour throughout New York state by Cuomo and legislative leaders, would allow for businesses within 200,000 feet of SUNY campuses to live, breath and work completely tax-free for years.
Jason Stverak from Real Clear Policy has recently written the following article about the future of the internet sales tax, how it is linked with crony capitalism, and how it threatens the future of online small entrepreneurs.
The Internet is the great frontier of American free enterprise. While government subjects small businesses to an ever-growing list of regulations, the Internet has become the closest thing to a truly global free market […]. But by pushing an Internet sales tax in the name of “marketplace fairness,” Congress threatens to restrict consumer choice and bury small online retailers under a mountain of costs and regulations.
[…] businesses pushing for the “fairness” of an Internet sales tax are corporate giants that already operate in the majority of states, and thus are already required to collect sales taxes from most of their customers. The new law would barely affect these big corporations, but would drive Main Street businesses from the online market, reducing competition and driving up prices for consumers.
Mark Newgent at the Maryland Watchdog Wire writes about a new tax in Maryland that will tax…rain?
In 2010, the U.S. Environmental Protection Agency ordered Maryland to raise money to reduce storm water runoff in order to reduce phosphorus and nitrogen levels in the Chesapeake Bay. In response the Maryland General Assembly passed HB 987 mandating that the state’s 10 largest counties generate the revenue through taxing “impervious surfaces” (roofs, driveways, patios, parking lots) in order to pay for storm water management. Beginning in July, property owners will now see a new line item on their tax bills based on the amount of impervious surface on their property.
A Wall Street Journal article highlights a specific tax break for…television program?
Empire State Governor Andrew Cuomo and the legislature have helped to grease the show’s eastward move with a special new tax credit available only to big-budget television programs that relocate to New York. According to the state’s new budget the credit is aimed at “a television production that is a talk or variety program that filmed at least five seasons outside the state prior to its first relocated season.” Oh, and the show has to be filmed in front of a studio audience of 200 or more and spend at least $30 million in annual production costs in New York. How’s that for a very specific special interest?
Ezra Klein at the Washington Post writes about the staffers of a prominent politician, and how his position of authority has lead to his staffers becoming lobbyists:
…the point of hiring Baucus’s former aides isn’t that they can seamlessly insert any language they want into the final legislation. It’s that they have a direct line to Baucus, and to the people around Baucus, and that gives them a huge advantage. The fact is that human beings are more likely to find arguments convincing when they’re coming from friends rather than strangers or enemies.
That’s the key to most of the lobbying in Washington. It’s not about leveraging bribes so much as it’s about leveraging relationships — and that makes it harder to stamp out.
Angela Longomasini from OpenMarket.org has written the following article asking questions about those who benefit from alcohol taxes. The issue according to the article is that the main advocacy groups that seek tax increases on alcohol are not really concerned about the public health impacts of these taxes, but rather they are concerned with inserting earmarks in the tax code to favor their organizations.
While there appears to be no acceptable level of alcohol consumption to participants at the Alcohol Policy 16Conference, which met last week in Arlington, Virginia, they certainly don’t mind profiting from people who do drink. During a discussion on alcohol tax policy, these “public health advocates” discussed ways to hike the rates as much as possible and earmark the funds to their own organizations.
Rebecca Ramirez of the Bloomberg School of Public Health at Johns Hopkins University presented her qualitative research on the framing of pro-tax messaging for use in lobbying campaigns. […]. One disability advocacy group, she noted, told her flat out that they simply didn’t care about the public health impacts of taxes. They were in the game solely to get some of the tax revenue earmarked to their organization.
Matthew Mitchell and Christopher Koopman of the Mercatus Center wrote an article in US News about the tax preferences that benefits college athletic programs:
So why do politicians continue to hand out these privileges? One answer is that sports teams are well-connected and well-organized, giving them an inherent lobbying advantage over a multitude of unorganized taxpayers. Another explanation is that people love sports – especially their home team – and politicians are eager to associate themselves with anything popular.
This same explanation accounts for why politicians have gone out of their way in recent years to privilege another popular industry: Film production. The vast majority of states now offer a spate of tax credits, exemptions, and subsidies to production companies that film on location.