Boeing’s Bad Behavior Stretches from Safety Lapses to Overpaying Execs While Paying No Taxes

Yet again, a corporation's harmful actions are tied back to unmitigated corporate greed.

After a door panel blew off a Boeing plane in midair last month—a terrifying near-disaster that follows two crashes by Boeing planes in 2018 and 2019 that killed a total of nearly 350 people—leaders on Capitol Hill demanded a congressional investigation of the company. Such a probe is certainly called for, but the investigators should broaden their scope to include all destructive behaviors demonstrated by the company.

The harm corporations can cause can be shocking and visible–like part of a plane falling off–but it can also be insidious and easier to hide. Boeing’s record on taxes and executive pay are examples of the latter.

Boeing is among the top 100 U.S. corporations by revenue ($67 billion in 2022), and as of late January had a stock market value of about $120 billion. Despite this, Boeing not only didn’t pay any federal income taxes between 2019 and 2022, it actually got refunds each of those years. If a company is operating at a loss and getting a refund from the government, one might expect that organization’s executives would also take a pay hit. On the contrary, in 2019 alone, Boeing sent a total of $7.3 billion to its stockholders in the form of stock buybacks and dividends, and paid its top executives and members of its board a total of $61 million.

Paying too much to their executives and board members, while paying too little in taxes (or paying negative amounts–that is, getting refunds) is an issue that deserves attention and correction. Though the danger of ignoring the problem is not as immediate, American taxpayers have just as much long-range interest in seeing Boeing’s tax dodging addressed as the flying public has in seeing the company’s safety record improved. 

First of all, when huge firms like Boeing fail to pay their fair share of taxes, it results in one (or some combination) of three bad outcomes: working families pay more; vital public services are cut; federal debt goes up. Moreover, one of Boeing’s biggest sources of revenue is the American taxpayer. The aerospace giant is among the biggest federal contractors, getting more than $120 billion in government orders over a recent five-year span. The United States government provided one of every three dollars deposited in the corporate till over that stretch. But while the company is an expert at extracting money from the national treasury, it does not similarly contribute.

How could a multibillion dollar corporation owe no income taxes for four years and in fact get money back from the federal government? It’s because under tax-accounting rules, the corporate giant lost money each of those four years, and only profitable companies pay income taxes. But in several of those years, it was generous corporate tax breaks that contributed to paper losses—breaks without which Boeing would have turned a profit and owed taxes. 

One of those breaks is called “depreciation”: an annual deduction that’s supposed to reflect the gradual loss of value of plant and equipment. But the tax code has for years let firms write off the value of their big-ticket purchases much faster than they actually wear out. And for the first five years after enactment of the 2017 Trump-GOP tax law—in four of those years Boeing was getting refunds instead of paying taxes—corporations could write off in the year of purchase the entire cost of capital investments that might in fact last for decades. 

In those five years, Boeing took almost $10 billion in deductions for depreciation and amortization (a related concept of gradual expense write-downs), whittling away at its reported income and thereby avoiding huge amounts of taxes. The Trump law also increased the amount of interest companies could deduct, another corporate handout Boeing used to dodge its tax obligations. 

Yet as we mentioned, in 2019, the first year of the recent four in which Boeing claimed such poor financial condition that it couldn’t pay federal income taxes, it somehow had plenty of money to richly reward its already wealthy executives, board members and shareowners. In 2020, a second consecutive tax-free year, Boeing still found the funds to pay over a billion dollars in dividends to its overwhelmingly wealthy shareholders and give its top brass almost $45 million in compensation. 

Over the five years 2018-22, Boeing paid its top executives and board members almost $300 million—more than one-third of which, or over $100 million, went to the company’s chief executive officer alone. The firm’s CEO was paid almost 150 times more than the average Boeing employee over that period. 

Even in one of the rare recent years in which Boeing actually paid a federal tax bill—2018—it paid shareholders seven times more in buybacks and dividends than it did the government in taxes. And it’s worth remembering that corporate shareholders are almost exclusively rich: the wealthiest 10% own 93% of all stock. 

If Congress determines Boeing was somehow cutting corners on safety, the reason would presumably be the same as its reason for dodging taxes and overpaying the highest company officials: to preserve and create as much income as possible for the owners and top managers of the corporation. When the safety and general well-being of the American people are threatened, it’s time for the people’s representatives to step in.