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Q. How could the U.S. government justify its decision to offer a subsidy to a profitable and successful business?
Answer: It could indicate that this $10 million pump-priming expenditure results in a profit of $110 million. If Boeing paid a subsidiary income tax of 20% this would net the government $55 million which is in excess of 5 times the original subsidy thus that the decision may be justified not only in terms of benefit/cost considerations however even in terms of pure budgetary terms.
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