To: CWOJackson
The simple answer is for the fed to collect a tariff on AirBus sales here in the US and lower Boeing's corporate taxes. Then when Boeing competes with AirBus elsewhere in the world the fed funds the gap to match AirBus from the tariffs they collected on previous US sales. After the sale is won the fed collects a tax on the overall deal as compensation for helping them get the sale they would have otherwise lost, effectively lowering the overall "subsidy". This also encourages them to make a better cheaper product for future deals and not rely on the fed.
Also remember these planes can be in use for 20yrs, think of the profits that are made on parts and repair. The fed could forgo the "deal tax" and collect incrementally over the life of the aircraft instead.
The idea is to allow Boeing the ability to compete dollar for euro and win the contract based on product quailty. The other option is to walk away simply walk away from the sale and let the Europeans pick up the tab.
To: RockyMtnMan; CWOJackson
Rocky also mentioned a key component to tariffs: lowering domestic taxes. Crucial part.
To: RockyMtnMan
The scenario you present is an interesting one. On the other hand, a case like the Airbus one illustrates why France is always going to come out on the losing end by subsidizing Airbus.
If U.S. airlines buy subsidized aircraft from Airbus, then the French taxpayer is effectively subsidizing either the U.S. airlines directly (through reduced capital costs) or U.S. air passengers indirectly (through lower air fares than they would have had with "more expensive" Boeing aircraft). If I'm the French taxpayer, you can bet I'd be asking myself why I'm paying 50% of my salary in income taxes and $4 per gallon for gasoline just so Americans can fly to Disney World on a regular basis.
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