Originally published Friday, September 4, 2009 at 3:11 PM
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So just how much has Boeing collected in Washington state tax breaks?
The $3.3 billion figure for the tax breaks granted to Boeing and more than 200 aerospace contractors in 2003 by the state of Washington is an estimate over 20 years. So far, in six years, Boeing and the others have benefited by about $278 million.
"WE already gave Boeing $3.3 billion," is heard from many quarters. It is part of an argument to dismiss the threat that Boeing will start a second 787 assembly line outside Washington.
The $3.3 billion is not what it seems.
It was not a payment. It was an estimate of what tax cuts would cost the state over 20 years. Estimators were comparing the revenue at different rates on airplanes they pretended would be assembled in Washington in any case — and at the higher rate some of those airplanes weren't going to be assembled here.
Most of the cost was from a 40-percent cut in the gross receipts tax. The cut applied to all aerospace contractors — more than 200 — though Boeing probably got more than three-quarters of the savings. The tax cut is a favor, but not the only one. Lumber producers have a 30-percent break from the usual tax on manufacturers, and processors of meat, seafood, wheat, canola and soy have a 72-percent break.
How much has the aerospace industry's tax break cost Washington? Through fiscal 2008 it was $278 million. That's not chicken feed, but it's less than one-tenth of the $3.3 billion figure that gets bandied about.
Boeing is not asking for further tax breaks. It is asking for concessions from labor — and that is another issue. But let's keep the tax breaks in perspective.
Copyright © The Seattle Times Company
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