Boeing, US Targets EADS “Subsidies” — Should Target Taxes


For years politicians and Boeing have been calling foul on what they say are subsidies that Airbus parent EADS receives from the European Union. Thursday, they did something about it – the US House of Representatives voted to force the Department of Defense to consider it as an unfair advantage when reviewing bids for its massive upcoming fuel tanker contract.

This is a long-standing dispute wherein Boeing claims EADS funding from the EU are illegal subsidies that allow Airbus to undercut Boeing prices while still turning a profit. Airbus counters that an excess of government contracts in effect give Boeing a leg up.

Maybe there’s another solution for Boeing proponents. EADS supporters will say it’s patently unfair, and it would definitely give Boeing an advantage in competitive negotiations, but I believe it’s honest. It is this: subtract the money the government gets back in the form of taxes when considering the true cost of one contract or another.

This could include the 35 percent Corporate tax on Boeing’s contract-related profit and taxes employees pay on their contract-related income, plus related shareholder taxes. And then there are the US companies from which Boeing might buy materials and services for the job. Subtract their related corporate, shareholder and employee taxes. Of course, the same consideration would be given to all bidders, but Boeing would likely win out against Airbus.

Hey, through taxes, the government is making this money back from these contracts. Shouldn’t that be considered?

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