Bell Helicopter wants tax breaks but can afford to pay Wall Street

[one...two...tree 2,762]

To get an idea of why people are so angry at corporate America and the political class, consider a local exchange last week. Bell Helicopter negotiated an 80 percent tax abatement for 20 years, and a Fort Worth councilman called it "a good example" of how the city can help its own.

No questions about whether Bell can afford to pay its taxes. (It earned $354 million in the first nine months of the year.) No local executives asked to justify the public contribution. And no signs of exasperation -- as in, "We hate these #@*! tax breaks, but we don't have any choice."

It might as well have been high-fives all around the table and a big wink: That's just how the 1 percent roll.

It's a bit unfair to single out Bell here, because employers big and small are constantly putting the squeeze on their communities, as though dodging taxes is the new American pastime. Since spring, local tax-break babies have included prized companies such as General Motors, General Electric, Alcon and In-N-Out Burger.

By the usual standards used to measure these things (the size of the tax break versus private investment), Bell's package is solid. It's seeking $13.5 million in abatements from the city and $4 million more from Tarrant County, and it pledges to spend $235 million on new facilities at its longtime headquarters.

Compare that with the worst deal ever: Last year, RadioShack managed to get a $10.7 million tax break in exchange for a short-term, below-market sublet in a building it already rented.

But Bell's deal arrives at a time when the Occupy Wall Street movement is capturing the frustrations of many Americans. In dozens of cities including Fort Worth and Dallas, protesters have complained about a surge in inequality and about the way the rich and powerful play by their own rules. While the most elite citizens collect most of the benefits of the economy, protesters say everyone else has to deal with rising unemployment, declining income and a lower standard of living.

"We are the 99 percent that will no longer tolerate the greed and corruption of the 1 percent," the group declares on its website.

View the Bell proposal through that prism, and it's pretty clear which side of the divide the company falls on. Bell's argument is pretty simple: It's putting big money into east Fort Worth and agreeing to keep at least 4,500 workers here for the rest of the decade.

That's great for the local economy, even if it merely moves people from one part of the city to another, rather than create jobs. If consolidating around a new headquarters helps Bell be more competitive and win more contracts, it's even better. But I asked Bell's lead man on the deal, "What does that have to do with paying your fair share of taxes?"

He said that Bell generated $7.6 billion in economic impact in the state, including almost 40,000 direct and indirect jobs.

"That's the fair share that Bell brings to this community," said Robert Hastings, senior vice president of communications. "You've got to look at the whole picture."

This sounds a lot like the stalemate over tax policy in Washington. Should those who make more pay more -- or should they get a break because they're already paying far more than anyone else?

Warren Buffett and Mark Cuban have entered the national debate. They say it's a privilege to pay higher taxes, an obligation that comes with great success.

When Bob Simpson and XTO Energy renovated several important buildings in downtown Fort Worth, they never asked for a tax break.

They're the exception. Most see tax breaks as one more item on the financial checklist. City staffers and even elected officials don't have much leverage in these discussions. In theory, Bell could choose to improve facilities across the county line, the kind of threat that the chamber of commerce always cites, no matter how hollow it is.

But if companies play hardball -- RadioShack convened a meeting of competing cities to drive home its intentions -- who's going to blink?

The state limits tax abatements to 10 years, as if to protect communities from themselves. So Tarrant County proposes a 70 percent abatement for 10 years on Bell's improvements. But Fort Worth is using a loophole, a so-called 380 agreement, so it can offer an 80 percent abatement for two decades.

Officials spent six months negotiating the tax breaks down to that, so imagine where Bell's consultants started.

It's notable that Bell CEO John Garrison hasn't met with city officials about the incentives. Maybe he'll appear when the City Council votes on Bell's request this month. Hastings, who joined Bell in April 2010, less than a year after Garrison, led the initiative.

Have they been around here long enough to be embarrassed by putting the touch on the city? Heck, are any execs anywhere embarrassed by such things?

Hastings is proud to say that Bell isn't asking for an abatement on school taxes. They're usually much tougher to get, but Hastings said Bell passed because education faces so many fiscal problems.

True enough. But Fort Worth has also had a budget crunch in recent years. It laid off workers, closed swimming pools and took other measures. And there isn't a lot of money at stake here for Bell.

Over 20 years, all the incentives total $17.8 million. Calculate the net present value and Bell's tax rate (because municipal taxes are deductible), and the number is closer to $10 million.

How crucial is that to a company that generated $2.5 billion in sales and $354 million in operating profit through three quarters? Hastings said it's plenty important, noting that Bell recently lost a major contract because a rival's costs were $2 less per hour.

Every business is cutthroat these days. Despite those pressures, Bell's parent, Textron Corp., paid out $22 million in dividends last year, $21 million the year before, and $284 million in 2008.

Maybe Bell really can't afford to pay all its taxes to Fort Worth. But it's paying Wall Street.

Read more: http://www.mcclatchydc.com/2011/11/13/129537/commentary-bell-helicopter-wants.html#storylink=omni_popular#ixzz1db9egcnQ

[Gary and Alla 3,694]

No business of any type should ever pay ANY tax. This problem goes away, the US becomes the largest tax haven for business, we have millions of new jobs (and wage earners to pay taxes)

Taxes applied to business are paid by either employees, stockholders or customers. Bsiness merely COLLECT tax, they do not pay tax. All tax payments come from individuals.

We need to END income tax of all forms and eliminate this class warfare shell game where we decieve people into believing they are "getting something" and that "someone else" is paying for it.

Eliminating income tax will eliminate "tax breaks".

The revenue system of our country needs to be protected from people who use it to play political games.

[Ban Hammer 13,502]

it's really more like choice a or b for ft worth.

a. give them tax breaks so they'll be around and provide some taxes in the years to come.

b. don't give them tax breaks and watch them move to another city/state that will do so, along with that future tax revenue.

[scandal 951]

it's really more like choice a or b for ft worth.

a. give them tax breaks so they'll be around and provide some taxes in the years to come.

b. don't give them tax breaks and watch them move to another city/state that will do so, along with that future tax revenue.

We've got the same going on in Illinois, with tax breaks to high profile firms like Caterpillar, Sears, CME and CBOE to keep them from fleeing to other states, particularly Indiana.

[Danno 1,228]

<<<Warren Buffett and Mark Cuban have entered the national debate. They say it's a privilege to pay higher taxes, an obligation that comes with great success.

>>>

Wait a minute... if paying taxes is such a privilege, why does Buffets Secretary pay more taxes than he does?

Why would Buffet be taxing all his tax breaks to avoid this privilege?

[lostinblue 1,989]

We are the 99 percent that will no longer tolerate the greed and corruption of the 1 percent," the group declares on its website.

So the one percent is a corporation made up of tens of thousands of shareholders or a single person (CEO)like buffet? Every town and city in this country offers a tax subsidy for businesses. An example would be any new building gets 10 years before you pay property taxes. Why all the empty malls in the country.Build a new mall and skip paying taxes on the property. By building a new mall you employ hundreds of union workers. ...WOW a tax subsidy for union workers. Why does Steve hate unions so much.

[Mr. Big Dog 10,747]

No business of any type should ever pay ANY tax.

Businesses are people and people pay taxes. Simple concept, really.

This problem goes away, the US becomes the largest tax haven for business, we have millions of new jobs (and wage earners to pay taxes)

Yep, worked awesomely for Ireland. Oh, wait, it didn't. The higher tax countries of the EU had to rush the poor little island nation's rescue and bail out the very nation that worked so hard to lure business away from them with their low-corporate tax policy. They're in worse shape than any of the other northern European countries despite - or perhaps because of - their low corporate tax policies. It's a failed strategy.

[웃 910]

No business of any type should ever pay ANY tax. This problem goes away, the US becomes the largest tax haven for business, we have millions of new jobs (and wage earners to pay taxes)

Problem solved, that easy! You deserve another Nobel Prize. Forwarded straight to NobelPrize.org

Taxes applied to business are paid by either employees, stockholders or customers.

Send tax bills to the stockholders. Buffet, you are the largest shareholder, here, pay a million of their taxes

[slim 1,530]

Cut from the post - "He said that Bell generated $7.6 billion in economic impact in the state, including almost 40,000 direct and indirect jobs. "That's the fair share that Bell brings to this community," said Robert Hastings, senior vice president of communications. "You've got to look at the whole picture."

You'd think a government could operate with the money generated from income tax alone on 40,000 workers. Why they need more money I'll never understand. Why some of you want to give the government more money I'll never understand either.

[Obama 2012 1,714]

No one here is 'upset' at all in the tax breaks for Bell, Radio Shack, etc..

At the end of the day they have been here for a long time, provide thousands of jobs here and across the country, and have been good to the community overall.

The city has its budget issues thanks to BS spending over the years on things that aren't necessary. Pension plans eating away at them (Public employees should NEVER have pensions off tax payers backs), and of course money thrown into the wrong areas as well that benefitted certain neighborhoods that didn't need it, etc... Not to mention wasting money on our useless/power abusive police force.

The biggest problem with Fort Worth's budget is we were the fastest growing city in the country from like 2002-2007 and still have a relatively fast growth rate. The city looked at that increased revenue in '02-'07 and when the economy started going down hill with less people coming in, they didn't plan right... They overbudgeted themselves based on what was happening, versus looking at the reality of what could/should happen. Typical political BS.

Either way, this is a great city to live in. Cost of living is CHEAP here. Anyone who is living here and complaining about ####### (other than the amount of transplants... ugh... and illegals who can't speak a bit of English.. ugh..) should get the hell out and not let the door hit them on the way out.