Re: Northrop Grumman/EADS Win USAF Tanker Award

Eeyore wrote:

Stephen Harding wrote:


Don't know if European countries have the same issues of
companies "moving out" of one state or provincial jurisdiction
to another in favor of cheaper labor, lower taxes, etc.


Yes they do.



States do this sort of thing all the time to keep up their tax base;
not in any effort to make a company more profitable per se.

A pure form of subsidy to my mind is where government gives
money (or monetary equivalent) to a company in an effort to
make it more profitable or dominant in its field.

It's a definition dependent on intent even though the effects
may be very comparable.

The entire definition of "subsidy" can get quite tricky if one
wants it to be, and I think Airbus is doing just that.


As does Boeing.

Then why is Airbus making such claims if they're the beneficiaries
of the very same type of "subsidy"?

I still regard tax breaks by a state or city to keep an industry
local as not genuine ground for subsidy complaints.

If one is going to do that, there can be all sorts of "costs"
incurred or not incurred by a company doing business in a locale
that could be extended to subsidy classification.

State/local taxes, cost of living differentials between locales,
any sort of differences in accounting laws enabling write offs,
depreciation, organized labor laws, etc., etc., etc., all defined
as "subsidy", either because there are "special considerations"
being applied.

My state of Massachusetts has given "breaks" to companies to directly
offset some negatives (usually higher taxes, but also other areas)
of doing business in the state, just to keep them from moving elsewhere.

I don't think such practices qualify as a true subsidies, but we're
obviously getting into semantics here.


SMH
.

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