Arrow-right Camera
Go to e-Edition Sign up for newsletters Customer service
Subscribe now
News >  Column

Shawn Vestal: Tax breaks are the weapon Boeing uses to mug Washington state

Washington Gov. Jay Inslee, center, adjusts his glasses as he prepares to sign legislation Nov. 11, 2013, in Seattle to help keep production of Boeing's new 777X in Washington. (Elaine Thompson / AP)
Washington Gov. Jay Inslee, center, adjusts his glasses as he prepares to sign legislation Nov. 11, 2013, in Seattle to help keep production of Boeing's new 777X in Washington. (Elaine Thompson / AP)

A mugging.

That’s how Gov. Jay Inslee now characterizes the massive tax break for Boeing that he negotiated and sold to lawmakers and the public as a “great day for Washington” six years ago.

A gun to the ribs.

“Nobody felt good about it,” is what Rueven Carlyle, who actually sponsored the tax-cut legislation, told Crosscut News recently. He describes Boeing’s tactics as “absolutely ruthless.”

In 2013, though, it was all sunshine and flowers. Carlyle praised the tax breaks as a reflection of the “authentic marriage” between Washington and Boeing.

Maybe he meant “asymmetric marriage” — a relationship where one spouse calls all the shots.

Washington state politicians have lavished gifts upon its sweetheart corporation like no other state, all in the name of protecting jobs. The $8.7 billion tax-credit package Inslee announced in 2013, after a rushed, secretive, three-day special session, was the biggest kiss any state has ever given any corporation. It secured no commitment from Boeing in return – just the hope that $8.7 billion would be the price of the company’s loyalty.

Over the next few years, Boeing eliminated around 4,000 jobs anyway.

Now that Inslee and Carlyle are speaking frankly, their earlier statements seem like confessions of the North Korean variety: forced and fake. It was surely not an easy position for them to be in, and the threat of losing Boeing — even just some of Boeing — understandably weighed heavy on their minds.

But we should hope for a smaller gulf between the public pronouncements of our leaders and their honest opinions.

“This is a great day,” Inslee said in announcing the Boeing credits in November 2013, “because what happened in Olympia the past few days allows us to continue a great Washington state tradition, and that is to lead the world in aerospace.”

Now, as he’s out trying to spark interest in his presidential run, he’s had an epiphany. On “The Daily Show with Trevor Noah” last week, he said he wasn’t happy with the Boeing deal.

“If you’ve ever been mugged, you understand what it feels like,” Inslee said. “These corporations put a gun to your ribs and say you’re going to lose 20,000 jobs unless you get (them) a tax break.”

Inslee has repeated his criticism in another form or two and made vague suggestions that we should somehow prevent corporations from being able to extract such deals from local and state governments. That would indeed be a good idea. But it would require politicians to stand up to the muggers when it’s difficult, not when it’s easy.

Boeing is not just Washington’s sweetheart. It’s going steady with the entire U.S. government. It does a lot of business with the government, and it gets a lot of subsidies and breaks from the government. This coziness may be more than a little relevant as the truth continues to emerge about the company’s role in the Ethiopian Airlines crash.

Four years ago, the Washington, D.C., policy center Good Jobs First, which tracks government subsidies, compiled a ranking of “double-dipping federal contractors” that both sell a lot of goods to the government and get a lot of subsidies from the government.

Boeing led the list. By a mile. In fiscal year 2014, it earned $18 billion on government contracts, received $457 million in federal grants, and $64 billion in federal loans and loan guarantees, the report said.

Good Jobs First also compiled a list of triple dippers – corporations who get lots of federal government business, lots of federal government assistance, and lots of state and local assistance. Boeing leads that list, too.

Naturally, this sea of cash flows both ways. Boeing gives mountains of money to candidates — $4.5 million in 2018, according to the Center for Responsive Politics. It gives to Republicans and it gives to Democrats. It gives to party PACs on both sides, and it gives out of its own PACs. It gives to incumbents and challengers all over the nation, though Washington lawmakers get a significant share.

Last year, according to federal campaign reports, Boeing gave to Sen. Maria Cantwell and Sen. Orrin Hatch, to Rep. Nancy Pelosi and Rep. Devin Nunes. It gave to Beto O’Rourke and Ted Cruz. It gave to President Donald Trump and Rep. Adam Schiff. It gave to Rep. Cathy McMorris Rodgers and to Lisa Brown.

Boeing also spent $17 million on lobbying.

And yes, it has given money to Jay Inslee, too, though hardly anything by comparison: $1,800 in 2012. (That’s the contribution from the corporation itself, not individuals or organizations associated with it). In 2016, it didn’t give him anything, according to state Public Disclosure Commission filings.

The company always points out what a large economic impact it has on the state, and that is undeniable. But the effect of tax breaks is not negligible. Washington has the most regressive tax structure in the country; the poorest residents of the state pay a much higher proportion of their income on taxes than the richest do.

And they do so in a state that has the most tax exemptions and sweetheart deals for corporations in the nation — more than 600. Greg LeRoy, the executive director of Good Jobs First, told the Washington Post at the time of the 2013 tax breaks that we have “a Swiss cheese tax code” that contributes to its regressive nature.

In other words, if Inslee is right about Boeing — now, as opposed to then — then it wasn’t just him that got mugged. It was all of us.