Washington just awarded the largest state tax subsidy in U.S. history

From the Washington Post:

With the stroke of a pen, Washington Gov. Jay Inslee (D) on Monday signed into law the largest corporate tax break any state has ever given to a single company. And it took just three days of debate in the state legislature to get the measure to Inslee’s desk.

The new law extends a business and operating tax cut for the aerospace giant through 2040, streamlines the permitting process and invests in a transportation package the company had advocated. Over the life of the package, the deal is expected to be worth $8.7 billion.

That money is part of an effort to entice Boeing to build the 777X, an extended-range version of its popular wide-body aircraft, in the Puget Sound region. Inslee called the state legislature into special session last week; both the state House and Senate returned to Olympia on Thursday and passed the incentive package by wide margins on Saturday. Despite the record incentive, Boeing hasn’t committed to building the 777X in Washington yet, though.

The deal “is notable for being the biggest package ever in history,” said Greg LeRoy, executive director of Good Jobs First, an advocacy group in the District that tracks subsidies states offer to companies.

Here‘s a framework for thinking about the equity and efficiency consequences of these policies.

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About ozidar

I'm an Assistant Professor of Economics at the University of Chicago Booth School of Business and a Faculty Research Fellow at National Bureau of Economic Research. You can follow me on twitter @omzidar. http://faculty.chicagobooth.edu/owen.zidar/index.html
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