Boeing Paid No Federal Income Tax Last Year: Analysis

[HenryChinaski]

It's a rigged game for sure. Boeing Paid No Federal Income Tax Last Year: Analysis

 

[Thom Paine]

It's a rigged game for sure. Boeing Paid No Federal Income Tax Last Year: Analysis

Boeing is not the bad guy; they didn't write the tax code. There is only one tax code applicable to all individuals and businesses.
It does seem amusing that "average Joe" deserves to take every advantage and properly use the tax code, to avoid tax fees, but businesses are the bad guys when they follow the same laws.
Take it up with Congress.

Logic is often elusive to some

Thom Paine

 

[American]

It's a rigged game for sure. Boeing Paid No Federal Income Tax Last Year: Analysis

I guess they should bend over and take it in the ass right?

 

[Carjosse]

Boeing is not the bad guy; they didn't write the tax code. There is only one tax code applicable to all individuals and businesses.
It does seem amusing that "average Joe" deserves to take every advantage and properly use the tax code, to avoid tax fees, but businesses are the bad guys when they follow the same laws.
Take it up with Congress.

Logic is often elusive to some

Thom Paine

The last time I checked most small businesses and your average joe don't have the ability to off-shore money or other massive tax saving loopholes and take advantage of things only a large team of corporate tax accountants could do. What they they are doing could very well be illegal.

 

[specklebang]

It's a rigged game for sure. Boeing Paid No Federal Income Tax Last Year: Analysis

From the article:

Boeing disputes the report’s findings, saying its federal tax rate was actually 26.4 percent last year. Chaz Bickers, a Boeing spokesman, said the analysis ignores a crucial part of the company's tax expense. When the Boeing decides to embark on building a new aircraft, its taxes are deferred to encourage investment that could take decades to materialize a profit. But once they actually deliver the aircraft, those deferred taxes turn into current ones.

Boeing is the employer of 170,000 workers in the US. Generally, their wages seem to be at least $20-$30 per hour, which won't get you into the Country Club but allows a modest middle class lifestyle.

Now, do these huge corporations have tax laws passed that are convenient for them? Sure. Our politicians will do anything for money. But I don't care if they pay taxes IF they are hiring American workers.

IMHO, I would like to see the outsourcers pay double the taxes and the domestic employers pay none. That might just bring some fairness back to the situation.

 

[Thom Paine]

From the article:


Boeing is the employer of 170,000 workers in the US. Generally, their wages seem to be at least $20-$30 per hour, which won't get you into the Country Club but allows a modest middle class lifestyle.

Now, do these huge corporations have tax laws passed that are convenient for them? Sure. Our politicians will do anything for money. But I don't care if they pay taxes IF they are hiring American workers.

IMHO, I would like to see the outsourcers pay double the taxes and the domestic employers pay none. That might just bring some fairness back to the situation.

The taxes do in fact become payable; much like the re-capture of depreciation.

Howdy Spec

Thom Paine

 

[Quag]

changing the tax rate but leaving all the loopholes open will have no effect.

 

[Carjosse]

From the article:


Boeing is the employer of 170,000 workers in the US. Generally, their wages seem to be at least $20-$30 per hour, which won't get you into the Country Club but allows a modest middle class lifestyle.

Now, do these huge corporations have tax laws passed that are convenient for them? Sure. Our politicians will do anything for money. But I don't care if they pay taxes IF they are hiring American workers.

IMHO, I would like to see the outsourcers pay double the taxes and the domestic employers pay none. That might just bring some fairness back to the situation.

Well building aircraft is hard to outsource as it it is not unskilled labour, it is usually high skill and some kind post-secondary education is required, it is how the modern economy works. Bombardier does the same thing here but they do pay taxes.

 

[newpublius]

changing the tax rate but leaving all the loopholes open will have no effect.

It should just be eliminated altogether though. There already exist two pass thru entities in the US, the S Corp and the LLC, why do we make C Corps so unattractive. In this particular circumstance, Boeing simply gets to defer taxes so that their current liability is less than 0. The loophole here is actually an activity that the US Government wants Boeing to engage in. This isn't quite a loophole, what's happening here is that the government is saying, "Hey, Boeing, if you want you can pay what the law requires and that'll be the end of it, OR, if you do what we want you to do, we'll let you defer taxes"

And sure enough Boeing took them up on the offer because now that investment became more attractive to undertake.

 

[Quag]

It should just be eliminated altogether though. There already exist two pass thru entities in the US, the S Corp and the LLC, why do we make C Corps so unattractive. In this particular circumstance, Boeing simply gets to defer taxes so that their current liability is less than 0. The loophole here is actually an activity that the US Government wants Boeing to engage in. This isn't quite a loophole, what's happening here is that the government is saying, "Hey, Boeing, if you want you can pay what the law requires and that'll be the end of it, OR, if you do what we want you to do, we'll let you defer taxes"

And sure enough Boeing took them up on the offer because now that investment became more attractive to undertake.

And how will increasing the tax rate have any effect on that?

 

[Quag]

Well building aircraft is hard to outsource as it it is not unskilled labour, it is usually high skill and some kind post-secondary education is required, it is how the modern economy works. Bombardier does the same thing here but they do pay taxes.

Bombardier does get a lot of subsidies though

 

[Thom Paine]

The last time I checked most small businesses and your average joe don't have the ability to off-shore money and take advantage of things only a large team of corporate tax accountants could do. What they they are doing could very well be illegal.

:mrgreen: Smart ass question... Have you checked U.S tax info in the last 70 years?

All persons can establish off shore accounts. Some regs do not take effect until certain income and investment levels are achieved.
Many are grossly ignorant of tax regs. ergo they do not obey the tax code/law to their own benefit.

Obey traffic laws equal zero tickets; Obey all tax laws equal maybe zero taxes.

Easy Peasy ( h/t to Ste Maggie)

eace

Thom Paine

 

[newpublius]

And how will increasing the tax rate have any effect on that?

I say eliminate it of course. Increasing the tax rate actually makes any offers to defer taxation potentially more lucrative. The best example is a 401(k), while you're not a corporation, the same principle applies, you contribute to a 401(k) and as a result you can defer payment of income taxes on those funds. To the extent that you earn income in the higher marginal brackets, the more attractive the scheme potentially becomes since you'll likely be withdrawing them when you're income is lower.

 

[specklebang]

The taxes do in fact become payable; much like the re-capture of depreciation.

Howdy Spec

Thom Paine

They can probably defer taxes for decades. Yes, very much like recapture of depreciation. Interestingly, depreciation is not an option. I tried to have my CPA not depreciate my rentals because I have some large tax credits and the depreciation doesn't benefit me. You MUST take the depreciation. I was trying to keep the capitalization up so my heirs would have the higher amount as the original value. My CPA said that the houses capitalization will be based on market value at the time of my death, not on the actual original investment. But I was still stunned that it was MANDATORY for these deductions to be taken.

So Boeing is actually following the law. Go figure.

 

[specklebang]

changing the tax rate but leaving all the loopholes open will have no effect.

The issue of the OP is not the tax rate. It is the taxable amount. Our corporate rates are relatively high.

It should just be eliminated altogether though. There already exist two pass thru entities in the US, the S Corp and the LLC, why do we make C Corps so unattractive. In this particular circumstance, Boeing simply gets to defer taxes so that their current liability is less than 0. The loophole here is actually an activity that the US Government wants Boeing to engage in. This isn't quite a loophole, what's happening here is that the government is saying, "Hey, Boeing, if you want you can pay what the law requires and that'll be the end of it, OR, if you do what we want you to do, we'll let you defer taxes"

And sure enough Boeing took them up on the offer because now that investment became more attractive to undertake.

C Corps are more attractive, not less. How would you pass through current income to the shareholders?

And how will increasing the tax rate have any effect on that?

It won't.

I say eliminate it of course. Increasing the tax rate actually makes any offers to defer taxation potentially more lucrative. The best example is a 401(k), while you're not a corporation, the same principle applies, you contribute to a 401(k) and as a result you can defer payment of income taxes on those funds. To the extent that you earn income in the higher marginal brackets, the more attractive the scheme potentially becomes since you'll likely be withdrawing them when you're income is lower.

Comparing Boeing's tax liability to your 401K is invalid unless you are making more than I can imagine.

As for "Increasing the tax rate actually makes any offers to defer taxation potentially more lucrative" isn't that the objective? It is an incentive to invest in R&D.

 

[Quag]

Thread title is: But but..the corporate tax rate is too high!

 

[Carjosse]

:mrgreen: Smart ass question... Have you checked U.S tax info in the last 70 years?

All persons can establish off shore accounts. Some regs do not take effect until certain income and investment levels are achieved.
Many are grossly ignorant of tax regs. ergo they do not obey the tax code/law to their own benefit.

Obey traffic laws equal zero tickets; Obey all tax laws equal maybe zero taxes.

Easy Peasy ( h/t to Ste Maggie)

eace

Thom Paine

If you obey all the tax laws you would party an average amount of tax money, if you wanted to pay zero dollars you would need a fairly large army of accountants. If an individual by themselves tried to offshore cash it might actually cost more.

 

[Carjosse]

Bombardier does get a lot of subsidies though

I'm sure they do but they also pay taxes, and I was comparing the two companies, they are both located where they are for the primary reason of the high skill requirements of the jobs.

 

[Quag]

I'm sure they do but they also pay taxes, and I was comparing the two companies, they are both located where they are for the primary reason of the high skill requirements of the jobs.

Pretty sure Bombardier is located in Quebec mainly because thats where Mr. Bombardier started with his snowmobiles.

 

[specklebang]

Well building aircraft is hard to outsource as it it is not unskilled labour, it is usually high skill and some kind post-secondary education is required, it is how the modern economy works. Bombardier does the same thing here but they do pay taxes.

Theoretically, they (Bombardier and Boeing) follow the same tax codes.

By investment, we are already outsourcing aircraft construction to Europe. But you are correct in that these are the types of companies that manufacture domestically and that they present opportunity to those who have invested in education. Unskilled labor is becoming increasingly obsolete.

 

[newpublius]

The issue of the OP is not the tax rate. It is the taxable amount. Our corporate rates are relatively high.

Yes, I got that, the poster was trying to poke fun at what many complain to be a high rate, but, when applied to Boeing amounts to nothing. I got it..

C Corps are more attractive, not less. How would you pass through current income to the shareholders?

Well C Corps are only attractive if you want to go public, ie. if you absolutely need to be a C Corp, until then the C Corp is the absolute worst tax structure to be in in the US. I'm not sure how this question even makes sense. I mean you're asking, "How can shareholders be shareholders without a corporation to be a shareholder of?"

Sure, I mean, they would be unit holders in an LLC or shareholders in an S Corp and I can assure you there are methods of ensuring that the money earned in an LLC or S Corp can flow to the shareholders/unit holders/managing members/owners, whatever you want to call them.

Comparing Boeing's tax liability to your 401K is invalid unless you are making more than I can imagine.

No its very apt actually. Many people contribute to the 401(k) with the express intent of deferring taxes on the funds places into the 401(k). The government created a tax vehicle which creates positive incentives to do this and sure enough people do it. People don't say, "Gee, Richie Rich paid less taxes because he took advantage of the 401(k) loopholes". The same logic underpins Boeings actions. The government wants Boeing to make these investment and creates tax incentives, in this case a similar deferral scheme, for them to do so. Shocker, they do and now people are complaining that their current tax liability is zero. All I can say is that they should then remove it and find out if Boeing still finds the activity lucrative enough to engage in.

As for "Increasing the tax rate actually makes any offers to defer taxation potentially more lucrative" isn't that the objective? It is an incentive to invest in R&D.

Well, its the objective if you think a soft command economy is the way to go. It isn't. The corporate income tax shouldn't exist and given that it does the deferral shouldn't either. BUT, the fact is it does exist, so when the government does create the equivalent of subsidies don't be surprised when people take them up on it. But make no mistake about it, what you have is a ridiculous distortion of how our scarce resources should be allocated.

 

[Carjosse]

Theoretically, they (Bombardier and Boeing) follow the same tax codes.

By investment, we are already outsourcing aircraft construction to Europe. But you are correct in that these are the types of companies that manufacture domestically and that they present opportunity to those who have invested in education. Unskilled labor is becoming increasingly obsolete.

What some fail to realize is that there is still manufacturing in North America it is just high-skill now. Bombardier has a Quebec layer to it, Quebec is rather, unique.

 

[ludin]

funny that they still have to pay the taxes just not now. they pay them later after the plane is built. obama has passed that bill multiple times along with a wide swathe of people.

 

[Thom Paine]

If you obey all the tax laws you would party an average amount of tax money, if you wanted to pay zero dollars you would need a fairly large army of accountants. If an individual by themselves tried to offshore cash it might actually cost more.

A person or small business need only a CPA who properly knows his job and applicable tax codes for the payer's financial situation. You're generally correct about off shore banking; for until certain income and investment levels are achieved offshore is of questionable value; again tho regs allowing such are in the legislated tax code which makes them fitting, proper and legal for all.

Good eve to you Carjosse

Thom Paine

 

[newpublius]

If you obey all the tax laws you would party an average amount of tax money, if you wanted to pay zero dollars you would need a fairly large army of accountants. If an individual by themselves tried to offshore cash it might actually cost more.

I have a Bahamas IBC and a BVI IBC and a Delaware LLC and a NJ S Corp. With respect to my business operations in the US where I am 'doing business' in the United States, I have to be registered here of course. It doesn't make any sense to offshore the cash so to speak because once I make it, I've paid taxes here, now the money is here, this is where I want it.

Now, the other two I'm NOT conducting business in the United States, I remain PERSONALLY subject to taxation on worldwide income, BUT I just leave the money IN THE CORPORATE FORM (and there are no corporate taxes there).

That's why I do it.

Earning money here as a worker, getting a W-2 or 1099, paying tax on it. There's little reason to "offshore the money!"

You don't offshore the money, you OFFSHORE THE PROFITS! That's how you avoid taxation (avoidance is legal, evasion is illegal)