By Bernie Becker - 02/26/11 12:06 PM EST
An interest group with union ties is slamming Boeing for its tax-paying record, not long after the aerospace giant won a huge federal contract.
In a Friday release, Citizens for Tax Justice declared that Boeing basically did not pay any U.S. corporate income taxes between 2008 and 2010, even as it reported around $10 billion in profits.
“Throughout the competition for this lucrative federal contract, Boeing has tried to position itself as the company that supports America,” Bob McIntyre, the executive director of Citizens for Tax Justice, said in a statement. “But its shocking success in avoiding payment of U.S. corporate income taxes tells a very different story.”
In its release, which it says was based on S.E.C. filings, the group says that Boeing received a federal tax rebate in 2009, while paying 0.3 percent of its income in federal income tax in 2010 and 1.2 percent in 2008.
A Boeing spokesman said the release, which may also shed some light on the potential difficulties in passing a corporate tax reform package, was not necessarily an appropriate way to characterize the company’s tax bill.
Charles Bickers said that the company’s income tax expense rate was between 23 percent and 33 percent and 2008 and 2010, but that its actual payout may have been less due to pension payouts, IRS audit settlements and other items.
Still, news media outlets have also reported in the past that Boeing pays a relatively small tax rate. The New York Times reported earlier this month that the Chicago-headquartered company’s corporate tax bill had come to 4.5 percent over the last five years, when counting both federal and other taxes. (In all, Boeing was one of 115 companies on the Standard & Poor's 500 index that paid less than 20 percent in corporate taxes, that report stated.)
In 2009, BusinessWeek placed the company's average tax rate at 3.2 percent. Both The Times and BusinessWeek used Capital IQ, a research firm, for its figures.
In its release, Citizens for Tax Justice – which counts the presidents of UAW, AFSCME and the AFL-CIO as board members -- also referenced a 2008 Government Accountability Office report that asserted that Boeing had 38 subsidiaries in jurisdictions considered tax havens, including 16 in the U.S. Virgin Islands alone.
The group also released a report on a slew of American corporations that paid relatively little in taxes in the run-up to the 1986 tax reform push.
In the current discussion on tax reform, Washington officials on both sides of the aisle have given a general endorsement to the idea of lowering the current top corporate rate of 35 percent by broadening the tax base and eliminating breaks and loopholes.
But one potential sticking point in the push to overhaul the corporate tax code, as The Times and others have noted, is that some companies and industries actually appear to have a relative advantage under the current system.
For example, Aswath Damodaran, a professor at New York University’s business school, found that the biotechnology and pharmaceutical industries had an effective tax rate of around 5 percent, while the trucking industry paid around 30 percent.
And General Electric – whose chief executive, Jeff Immelt, heads up President Obama’s new job creation council – had paid an average effective tax rate of 3.6 percent of late, according to congressional testimony. Disney (36.5 percent) and Home Depot (35.4), meanwhile, paid roughly 10 times a higher percentage.