Machinist strike raises question: Why are Boeing taxes so low?

Tim Wheeler/PW

RENTON, Washington—“You guys are heroes,” I said as I passed out copies of the Retiree Advocate (RA) to the Boeing strikers standing on their picket lines at the gates of the giant aircraft plant where they build the Boeing 737 airplane.

The 33,000 machinists rejected the proposed contract and voted 96% to strike, walking out at midnight Sept. 12. The RA had my story on the front page of the interviews with the strikers at this very gate on Logan Ave at 3:30 a.m. the night they went on strike. More than three weeks later, the picketing workers are still standing strong.

“Imagine,” I said. “Elon Musk is on his way to becoming a trillionaire while all the rest of us struggle just to scrape by.”

A young worker nodded. “One take-away after another. Boeing took away our defined pension in 2008. Now they want to take away our annual bonus.” He pointed at his handmade sign: “NO PENSION. NO CONTRACT.”

A tall older man, the picket captain, added, “I think this strike sends a message to the entire labor movement: Time to fight back.”

Then my niece, Karen, drove me to strike headquarters at International Association of Machinists District 751 in South Seattle, the office crowded with IAM picket captains preparing to head out to picket lines in Renton, South Seattle, Everett. They eagerly accepted the RA as I poured out praise for their courage. “I think this strike can be summed up in a few words,” said one of the young picket captains. “The working class against the greedy corporations.”

Up and down Logan Avenue, MAGA Republicans struck in the dead of night, erecting four yard signs urging voter approval of the four ballot initiatives in the Nov. 5 election authored by millionaire hedge fund hustler Brian Heywood. The main aim of the initiatives is to heap more tax giveaways on Washington State’s 12 billionaires by repealing the state capital gains tax, the Climate Commitment Act, the Long Term Care Act, and a measure to reduce natural gas in home construction.

Washington State has no personal income tax and no corporate tax so education, school construction, and all other vital services are funded from a regressive 9.38% sales tax and from regressive property taxes and fees. As a result low and middle income households pay 15.7% of sales, property and excise taxes while the wealthiest pay 4.4% in the same taxes—the second worst state for overtaxing low and middle income wage earners..

Four of the Heywood signs were planted, literally, right under the feet of the Boeing pickets with the MAGA message “Vote Yes! Pay less.” One of the pickets commented, “We know what that means. Boeing will pay less. We will pay more.”

Ironically, no one would benefit more from the repeal of the Washington State capital gains tax than Boeing and its millionaire CEO, Robert “Kelly” Ortberg. The tax, first imposed in 2023, raised nearly $900 million earmarked for school construction, early childhood learning and childcare.

The 7% tax is levied on the sale of stocks and bonds and exempts the first $250,000 in profits from these sales. Only 8,200 households in Washington State had income high enough to be subject to the tax. (The RAI distributed had two major articles about the labor-led “get-out-the-vote” effort with the call, “VOTE NO ON ALL FOUR”).

Shifting the burden

The success of Boeing, and billionaires like Amazon CEO Jeff Bezos in shifting the tax burden from themselves to low income people has made Washington one of the most attractive states in the nation for these high rollers. Yet enactment by the legislature of the capital gains tax and the three other progressive measures enraged billionaire Bezos who moved to Florida. None of these tax cheats is greedier than Boeing.

Boeing reported a total $62 billion in profits since 2002 but paid a pitiful $2 billion in cumulative Federal taxes, an average tax rate of 3.2%. Boeing paid zero Federal taxes in 2013 and claimed $82 million in tax refunds despite reporting $5.9 billion in profits.

Boeing has engaged in nonstop corporate hanky-panky to improve their profitability. They merged with McDonnell-Douglas. They moved their headquarters from Seattle to Chicago. Then in 2009 the moved to Charleston, S.C., into an existing aircraft plant once owned by the U.S. Air Force. Boeing was lured by $1 billion in “incentives” by the State of South Carolina which showered the company with an outright gift of $270 million plus $356 million in forgiven property taxes, $47.5 million in forgiven corporate taxes, and $33 million to pay for workforce training.

An additional $100 million in forgiven property taxes was granted to persuade Boeing to build the ”Dreamliner” at their Charleston plant.

Gov. Nikki Haley and other state authorities were so menacing in their enforcement of the state’s “Right-to-Work” (for less) unionbusting law, that the International Association of Machinists cancelled attempts to organize the 6,000 workers.

Airlines that buy the aircraft built by the non-union workers are charging “shoddy workmanship,” so sloppy that they are at risk of falling apart in midair.

In November, 2013, Gov. Jay Inslee called the Washington State legislature into special session to approve what turned out to be the largest corporate tax cut in history, a giveaway to Boeing worth $8.7 billion through the year 2040.

This package of “incentives” was aimed at persuading Boeing to build its next plane, the Boeing 777X, at its unionized plant in Everett.

The giveaway was so extreme that the World Trade Organization branded it an “illegal subsidy.” Boeing is among the biggest Pentagon contractors building bombs, missiles, spacecraft, fighter and cargo jets reaping tens of billions in profits at the public trough. Boeing has been on the public dole since it was founded.

The federal government built the complex of aircraft plants in Everett, Renton and South Seattle at taxpayer expense during World War II then turned it over to Boeing after the war. Boeing claims it bought the Renton plant from the Pentagon but does not tell how much—or how little—it paid.

And right now, Boeing is crying poverty, that it cannot pay the 40% wage increase over the four-year contract. Yet within hours of the walkout, Boeing sweetened its offer announcing that it was raising the new proposed wage to 30% but remaining silent on its proposal to strip out the 4% annual bonus.

Heywood moved here from California to enjoy the scenery and zero income taxes. He founded “Lets Go Washington,” pouring $7,000,000 of his own fortune into hiring signature gatherers to put the four reactionary initiatives on the November 5 ballot.

PSARA (Puget Sound Advocates for Retirement Action) which publishes the Retiree Advocate, has distributed many thousands of “get-out-the-vote” palm cards that proclaim, “A weird billionaire wants to keep Washington from having what we need: A healthy climate; Funding for Schools; Taxes on the uber rich; Long term health care; Well paid union jobs…VOTE NO on his ballot initiatives! NO on I-2066! NO on I-2109! NO on I-2117! NO on I-2124!”

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CONTRIBUTOR

Tim Wheeler

Tim Wheeler has written over 10,000 news reports, exposés, op-eds, and commentaries in his half-century as a journalist for the Worker, Daily World, and People’s World. Tim also served as editor of the People’s Weekly World newspaper.  His book News for the 99% is a selection of his writings over the last 50 years representing a history of the nation and the world from a working-class point of view. After residing in Baltimore for many years, Tim now lives in Sequim, Wash.