In performing a quick review of SEC filings of large corps with an SEC State Location Code in Nevada, I found 3 large corps with Total Core Consolidated Pretax Income of more than $3 bil each, for the most recent 12 years. Core Pretax Income is exclusive of both large Asset Impairments Charges and large Gains from Early Extinguishment of Debt.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated core pretax income, both in total for the past twelve years for each of these 3 large Nevada Corps. These 3 large Nevada Corps below had a weighted average effective state corporate income tax rate paid of 2.92%.
….……………………...............Current……………….............State
….…………………….................State.......Consolidated..Effective
….……………………............Income Tax……..Pretax…..Income Tax
….……………………..................Paid……......Income……Rate Paid
….……………….…....................(Millions of Dollars)
..3. Harrah's Entertainment..197.............3,540...........5.56%
..2. Intl Game Technology....173……........5,643…….....3.07%
..1. MGM Mirage.....................48…...........5,125…….....0.94%
Total all 3……….....................418….........14,308…….....2.92%
Only six of the 50 US States now don't have state corporate income taxes. Nevada is one of the six. The 44 US States plus Washington DC, which do have state corporate income taxes, have an average statutory Corporate State Income Tax Rate of 7.44%, which is close to the related median tax rate of 7.30%.
But let me focus on how Nevada’s Big Corps have been economically crushed in the Great Recession.
Here’s International Game Technology’s Pretax Income for the nine years from Sept 1999 to Sept 2007:
1999…..$101 mil
2000…..$245 mil
2001…..$339 mil
2002…..$409 mil
2003…..$599 mil
2004…..$654 mil
2005…..$681 mil
2006…..$747 mil
2007…..$805 mil
Now the above is an amazingly consistent uptrend. But what has happened since 2007 during the Great Recession?
2007…..$805 mil
2008…..$590 mil
2009…..$238 mil
But even more telling is just what has happened to the two large Nevada Casino Corps before and during the Great Recession?
…………………………..........1998-2007……………..2008-2009
…………………………....Core Pretax Income….Core Pretax Loss
MGM Mirage…………….....$6,079 mil……………....$(954) mil
Harrahs Entertainment…$5,283 mil……………..$(1,743) mil
So what is the best way to turn Nevada’s economic devastation around? Well, fixing the housing crisis is key. But just as important is for its customers….mostly the rest of the country, and particularly California…..to dramatically improve their dismal economic status.
Reducing the top income tax rates will do very little to help Nevada, or the dismal US economy, and the jobless recovery. What will help is something like President Obama has proposed….a combination of permanent research tax credits, 100% expensing of capital expenditures, and substantial infrastructure investments.
To make it even more effective, I would give businesses a choice….they can either get 100% expensing, or a refundable investment tax credit, for their capital expenditures, perhaps for a two-year period. This is a substantially better use of funds then simply cutting the top income tax rates, and hoping that will trickle down. Also, I would add on some energy tax credits for clearly green investments made by businesses.
And to make President's Obama economic recovery plan even more effective, I'm sure that many businesses have sound ideas for how best to fix the US jobless recovery.
Tuesday, November 30, 2010
Missouri Big Corps Have Paid Mostly Modest Amounts of State and Local Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Missouri, I found 9 large corps with Total Consolidated Pretax Income of more than $4 bil each, for the most recent 12 years.
Below here is the effective state and local corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 9 large Missouri Corps. These 9 large Missouri Corps below had a weighted average state and local corporate effective income tax rate paid of a modest 3.07%, which is a 51% discount to Missouri’s current statutory corporate income tax rate of 6.25%.
….……………………..................Current…………………......State
….……………………....................State...Consolidated..Effective
….……………………....................Tax……….Pretax………Tax Rate
….……………………....................Paid……..Income……….Paid
….……………….…....................(Millions of Dollars)
..9. Anheuser-Busch…...........1,288……..23,436……......5.50%
..8. H&R Block……………............406….......8,169……......4.97%
..7. Ameren……….....................349*…….9,872………....3.54%
..6. DST Systems.......................167……...5,225……......3.20%
..5. Leggett & Platt......................85……...4,006……......2.12%
..4. Express Scripts...................133……...6,553…….......2.03%
..3. Energizer Holdings...............78……...4,074…….......1.91%
..2. Emerson Electric…..............443…….27,558……......1.61%
..1. Monsanto............................142….....11,737……......1.21%
Total all 9………......................3,091…....100,630…….....3.07%
* Current State Tax for 2004-09 and both Current and Deferred State Tax for 1998-2003
For the most recent year, the weighted effective state and local corporate income tax rate paid by these large Missouri Corps was a much lower 1.26%. One reason for this lower effective tax rate is that Anheuser-Busch was excluded in 2009, since it was acquired earlier.
I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by drastically reducing critical state services like education and citizen protection. And particularly in Missouri’s case, I think a wisely targeted, very healthy refundable investment tax credit would be very helpful to prop up the very troubled manufacturing sector.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit, with a bonus percentage for capital expenditures made by troubled manufacturers, like many of those in Missouri.
Below here is the effective state and local corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 9 large Missouri Corps. These 9 large Missouri Corps below had a weighted average state and local corporate effective income tax rate paid of a modest 3.07%, which is a 51% discount to Missouri’s current statutory corporate income tax rate of 6.25%.
….……………………..................Current…………………......State
….……………………....................State...Consolidated..Effective
….……………………....................Tax……….Pretax………Tax Rate
….……………………....................Paid……..Income……….Paid
….……………….…....................(Millions of Dollars)
..9. Anheuser-Busch…...........1,288……..23,436……......5.50%
..8. H&R Block……………............406….......8,169……......4.97%
..7. Ameren……….....................349*…….9,872………....3.54%
..6. DST Systems.......................167……...5,225……......3.20%
..5. Leggett & Platt......................85……...4,006……......2.12%
..4. Express Scripts...................133……...6,553…….......2.03%
..3. Energizer Holdings...............78……...4,074…….......1.91%
..2. Emerson Electric…..............443…….27,558……......1.61%
..1. Monsanto............................142….....11,737……......1.21%
Total all 9………......................3,091…....100,630…….....3.07%
* Current State Tax for 2004-09 and both Current and Deferred State Tax for 1998-2003
For the most recent year, the weighted effective state and local corporate income tax rate paid by these large Missouri Corps was a much lower 1.26%. One reason for this lower effective tax rate is that Anheuser-Busch was excluded in 2009, since it was acquired earlier.
I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by drastically reducing critical state services like education and citizen protection. And particularly in Missouri’s case, I think a wisely targeted, very healthy refundable investment tax credit would be very helpful to prop up the very troubled manufacturing sector.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit, with a bonus percentage for capital expenditures made by troubled manufacturers, like many of those in Missouri.
Monday, November 29, 2010
Washington State Big Corps Have Wide Variance in Amounts of State and Local Corporate Income Taxes Paid
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Washington, I found 9 large corps with Total Consolidated Pretax Income of more than $4 bil each, for the most recent 12 years.
Below here is the effective state and local corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 9 large Washington Corps. These 9 large Washington Corps below had a weighted average effective state and local corporate income tax rate paid of a modest 1.90%.
….……………………...............Current……………….......State & Local
….……………………..........State & Local..Consolidated..Effective
….……………………...........Income Tax………Pretax…..Income Tax
….……………………..................Paid……......Income……Rate Paid
….……………….…....................(Millions of Dollars)
..9. Starbucks......................443……….....7,197…….....6.16%
..8. Nordstrom………............375……….....6,790………..5.52%
..7. Costco...........................782………...17,413…….....4.49%
..6. Washington Mutual……1,531....……..39,487…….....3.88%
..5. Weyerhaeuser...............309..............8,025(3)......3.85%
..4. Paccar............................185………....12,596…….....1.47%
..3. Boeing............................449............34,831...........1.29%
..2. Microsoft….................2,094(1)…….192,455…….....1.09%
..1. Safeco................................0(2)….......5,591(3)…….0.00%
Total all 9……….................6,168…........324,385…….....1.90%
(1) The earlier four year amounts were estimated based upon more recent percentage mix trends, since there was no separate disclosure of Current State and Local Income Tax Paid for these four years
(2) No State Income Tax disclosures, therefore I assumed none were paid
(3) Exclusive of large Asset Impairment Charges
For the most recent 6 years, the weighted effective state and local corporate income tax rate paid by these 9 large Washington Corps was an even lower 1.59%.
As you can see from the above list, Washington’s retailers have substantially higher effective state and local corporate income tax rates paid than does the giant Microsoft. Frankly, it just doesn’t seem fair to me to have all of these US citizens hurting so much economically and, at the same time, for huge Corps like Microsoft to be paying such an incredibly low effective state and local corporate income tax rate.
Only six of the 50 US States now don't have state corporate income taxes. Washington is one of the six. However, as you can see from the above list, many Washington Corps still pay Corporate State and Local Income Taxes to other states. These 44 US States plus Washington DC, which do have state corporate income taxes, have an average Corporate State Income Tax Rate of 7.44%, which is close to the related median tax rate of 7.30%.
In these very troubled economic times, it seems to me that one really good argument for Washington to now adopt a State Corporate Income Tax is that when Microsoft repatriates any of its massive amounts of presently Unremitted Foreign Earnings, the State of Washington’s financial coffers would be demonstrably enhanced.
At June 30, 2010, Microsoft had $29.5 bil of Unremitted Foreign Earnings, up $11.5 bil from $18.0 bil at June 30, 2009, which were up another $10.5 bil from the $7.5 bil at June 30, 2008. Now that is what I call huge growth. Just think what Microsoft’s Unremitted Foreign Earnings will be down the road.
When you think about it, the Seattle area is a hotbed that attracts very bright, very technically proficient citizens. However, with the horrible economy, the Seattle area has all of this incredible innovative expertise that is presently much more dormant than it should be. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit the key Seattle area to thrive economically. Clearly, smart tax incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, green energy, and medical science.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Below here is the effective state and local corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 9 large Washington Corps. These 9 large Washington Corps below had a weighted average effective state and local corporate income tax rate paid of a modest 1.90%.
….……………………...............Current……………….......State & Local
….……………………..........State & Local..Consolidated..Effective
….……………………...........Income Tax………Pretax…..Income Tax
….……………………..................Paid……......Income……Rate Paid
….……………….…....................(Millions of Dollars)
..9. Starbucks......................443……….....7,197…….....6.16%
..8. Nordstrom………............375……….....6,790………..5.52%
..7. Costco...........................782………...17,413…….....4.49%
..6. Washington Mutual……1,531....……..39,487…….....3.88%
..5. Weyerhaeuser...............309..............8,025(3)......3.85%
..4. Paccar............................185………....12,596…….....1.47%
..3. Boeing............................449............34,831...........1.29%
..2. Microsoft….................2,094(1)…….192,455…….....1.09%
..1. Safeco................................0(2)….......5,591(3)…….0.00%
Total all 9……….................6,168…........324,385…….....1.90%
(1) The earlier four year amounts were estimated based upon more recent percentage mix trends, since there was no separate disclosure of Current State and Local Income Tax Paid for these four years
(2) No State Income Tax disclosures, therefore I assumed none were paid
(3) Exclusive of large Asset Impairment Charges
For the most recent 6 years, the weighted effective state and local corporate income tax rate paid by these 9 large Washington Corps was an even lower 1.59%.
As you can see from the above list, Washington’s retailers have substantially higher effective state and local corporate income tax rates paid than does the giant Microsoft. Frankly, it just doesn’t seem fair to me to have all of these US citizens hurting so much economically and, at the same time, for huge Corps like Microsoft to be paying such an incredibly low effective state and local corporate income tax rate.
Only six of the 50 US States now don't have state corporate income taxes. Washington is one of the six. However, as you can see from the above list, many Washington Corps still pay Corporate State and Local Income Taxes to other states. These 44 US States plus Washington DC, which do have state corporate income taxes, have an average Corporate State Income Tax Rate of 7.44%, which is close to the related median tax rate of 7.30%.
In these very troubled economic times, it seems to me that one really good argument for Washington to now adopt a State Corporate Income Tax is that when Microsoft repatriates any of its massive amounts of presently Unremitted Foreign Earnings, the State of Washington’s financial coffers would be demonstrably enhanced.
At June 30, 2010, Microsoft had $29.5 bil of Unremitted Foreign Earnings, up $11.5 bil from $18.0 bil at June 30, 2009, which were up another $10.5 bil from the $7.5 bil at June 30, 2008. Now that is what I call huge growth. Just think what Microsoft’s Unremitted Foreign Earnings will be down the road.
When you think about it, the Seattle area is a hotbed that attracts very bright, very technically proficient citizens. However, with the horrible economy, the Seattle area has all of this incredible innovative expertise that is presently much more dormant than it should be. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit the key Seattle area to thrive economically. Clearly, smart tax incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, green energy, and medical science.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Sunday, November 28, 2010
Virginia Big Corps Have Paid Mostly Modest Amounts of State Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Virginia, I found 11 large corps with Total Consolidated Pretax Income of more than $4 bil each, for the most recent 12 years.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 11 large Virginia Corps. These 11 large Virginia Corps below had a weighted average state corporate effective income tax rate paid of a 2.82%, or a 53% discount to Virginia’s current state corporate income tax rate of 6.00%.
….……………………......................Current…………………........State
….……………………........................State.....Consolidated..Effective
….……………………........................Tax………...Pretax………Tax Rate
….……………………........................Paid……....Income……….Paid
….……………….…..........................(Millions of Dollars)
11. NVR……................................424…........6,173……......6.87%
10. SAIC……………………………......503…….....9,124…….......5.51%
..9. Dominion Resources.............951……...22,078……......4.31%
..8. Gannett……...........................628…......17,924*……....3.50%
..7. Altria Group.......................4,371…….143,203…….....3.05%
..6. Norfolk Southern…................438…......15,116………...2.90%
..5. SLM.......................................231……...12,993……......1.78%
..4. Capital One Financial.............317……...20,721……......1.53%
..3. AES..........................................11……...12,218……......0.09%
..2. Genworth Financial…………….(28)…….....8,399………..(0.33)%
..1. Computer Sciences................(68)**.......8,350…….....(0.81)%
Total all 11……….......................7,778…...276,299…….....2.82%
* Exclusive of Facility Consolidation and Asset Impairment Charges of $8.0 bil
** Includes interest and penalty adjustments from IRS audits
For the most recent year, the effective state corporate income taxes paid by these 11 large Virgina Corps was an even lower 2.16%.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by the nine large Virginia Corps with total such tax loopholes of at least $300 mil each for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Virginia Corporate Income Tax Rate of 6.00% by the total Consolidated Pretax Income of each large Virginia Corp for the last twelve years. Then, I subtracted the actual total State Income Tax Paid by each of these Corps for the same twelve years.
……………………….........................VA…….....State……..Resultant
………………….........….............Corporate..Effective.......Higher
………………….........………….........Tax……..Tax Rate…...State Tax
………………..........…………...........Rate……....Paid…....Last 12 Years
…………………………………………………....................(Millions of dollars)
1.. Altria Group…………............6.00%.......3.05%..........4,221
2.. Capital One Financial..........6.00%.......1.53%.............926
3.. AES……...............................6.00%.......0.09%............722
4.. Computer Sciences.............6.00%......(0.81)%............569
5.. SLM………….........................6.00%.......1.78%.............549
6.. Genworth Financial............6.00%......(0.33)%............532
7.. Norfolk Southern……….......6.00%........2.90%............469
8.. Gannett…………………..........6.00%.........3.50%............447
9.. Dominion Resources……….6.00%.........4.31%.............374
Total all 9…………………………………………8,809 (yeah, $8.8 bil)
For the most recent six years, the related estimated total State Corporate Income Tax Loopholes Taken, as I have defined them above, by these nine large Virginia Corps, was $4.8 bil, as compared to $8.8 bil for the past twelve years.
Excluded from the above lists is McLean, VA based Freddie Mac, even though it generated total pretax profits of $43.8 bil for the nine years from 1998 to 2006. More than offsetting these profits were its huge pretax losses totaling $72.9 bil for the most recent three years from 2007 to 2009.
Once the US Government gets Fannie, Freddie, and the horrible housing crisis back on track, I don’t see why Fannie shouldn’t then start paying income taxes to Washington DC, and why Freddie shouldn’t then start paying more state income taxes. Likewise, I think that Reston, VA based SLM (Sallie Mae), included in the above lists, should be paying much more state corporate income taxes to many US States. All three of these companies are getting the benefit of many city and state services, so why shouldn’t they have to pay for them, like other companies do?
Looking at the first above list, you’ll find NVR, a Reston, VA based home builder. I think it is really telling that this is the only home builder in the country I have seen so far which made over $5 bil in Total Pretax Income for the most recent twelve years. Also, unlike the other home builders, NVR has made a profit in each of the most recent twelve years.
I think the above NVR consistent success story is a salient insight into why the US government just hasn’t executed in helping its desperate US citizens, who live outside the Beltway Bubble. Things just aren’t that bad economically in the greater DC area, and the US government employees, including the US Congress and key Administrative personnel, just haven’t felt the economic pain that the rest of the US citizenry has experienced. This is a main reason why there is such rage in the country.
Let me add to this thought. Falls Church, VA based US government contractor General Dynamics was also excluded from the above list, even though it generated Total Pretax Income of $24.2 bil in the past twelve years. It didn't disclose all of its Current State Corporate Income Tax amounts. It is able to pass on its state corporate income tax costs to the US government in its US government contracts.
General Dynamics has rocked in the Great Recession, with Pretax Profits of $7,117 mil for the most recent two years of 2008 and 2009. In comparison, in the decade earlier two years (1998 and 1999), its Pretax Profits were only $2,030 mil. That’s a 251% profit increase in the very troubled past decade.
But it’s not just General Dynamics that has flourished during this Great Recession, but also the other huge US government contractors. The other three huge US government contractors with a substantial portion of their sales to the US government are Lockheed Martin, Northrop Grumman and Raytheon.
These four US government contractors generated Net Sales in just 2009 of $128.7 bil, an increase of 91% over a decade ago in 1999 of $67.5 bil. That’s bad enough, but much worse is that the Total Pretax Income of these four US government contractors totaled $13.0 bil in 2009, up a much more substantial 227% over the $4.0 bil earned a decade earlier in 1999. Given how horrible the US economy is, there is no way that the US government should be permitting its huge US government contractors to be generating obscene profits like this, on the backs of US citizens, and also on the back of the US Deficit. The only industry I have seen that has topped the huge US defense contractors in obscene profit growth of the past decade is Big Oil.
US government employees need a wake-up call. It is only fair that the horrible economic recession and jobless recovery be shared by them, as well as by the many US government contractors…..and it’s not happening. Private sector employees, as well as the unemployed, are enraged over how US government employees have been protected, and even rewarded, during this horrible recession and jobless recovery.
And US government employees have done so little to help the US get out of its deep recession and jobless recovery. A clear illustration of this is how the GSA executed during the Economic Stimulus…..and also, from first-hand experience, how the IRS continues to function….it needs a complete overhaul. The IRS acts as a clear impediment to US economic growth and to job creation.
Anyway, I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by drastically reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 11 large Virginia Corps. These 11 large Virginia Corps below had a weighted average state corporate effective income tax rate paid of a 2.82%, or a 53% discount to Virginia’s current state corporate income tax rate of 6.00%.
….……………………......................Current…………………........State
….……………………........................State.....Consolidated..Effective
….……………………........................Tax………...Pretax………Tax Rate
….……………………........................Paid……....Income……….Paid
….……………….…..........................(Millions of Dollars)
11. NVR……................................424…........6,173……......6.87%
10. SAIC……………………………......503…….....9,124…….......5.51%
..9. Dominion Resources.............951……...22,078……......4.31%
..8. Gannett……...........................628…......17,924*……....3.50%
..7. Altria Group.......................4,371…….143,203…….....3.05%
..6. Norfolk Southern…................438…......15,116………...2.90%
..5. SLM.......................................231……...12,993……......1.78%
..4. Capital One Financial.............317……...20,721……......1.53%
..3. AES..........................................11……...12,218……......0.09%
..2. Genworth Financial…………….(28)…….....8,399………..(0.33)%
..1. Computer Sciences................(68)**.......8,350…….....(0.81)%
Total all 11……….......................7,778…...276,299…….....2.82%
* Exclusive of Facility Consolidation and Asset Impairment Charges of $8.0 bil
** Includes interest and penalty adjustments from IRS audits
For the most recent year, the effective state corporate income taxes paid by these 11 large Virgina Corps was an even lower 2.16%.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by the nine large Virginia Corps with total such tax loopholes of at least $300 mil each for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Virginia Corporate Income Tax Rate of 6.00% by the total Consolidated Pretax Income of each large Virginia Corp for the last twelve years. Then, I subtracted the actual total State Income Tax Paid by each of these Corps for the same twelve years.
……………………….........................VA…….....State……..Resultant
………………….........….............Corporate..Effective.......Higher
………………….........………….........Tax……..Tax Rate…...State Tax
………………..........…………...........Rate……....Paid…....Last 12 Years
…………………………………………………....................(Millions of dollars)
1.. Altria Group…………............6.00%.......3.05%..........4,221
2.. Capital One Financial..........6.00%.......1.53%.............926
3.. AES……...............................6.00%.......0.09%............722
4.. Computer Sciences.............6.00%......(0.81)%............569
5.. SLM………….........................6.00%.......1.78%.............549
6.. Genworth Financial............6.00%......(0.33)%............532
7.. Norfolk Southern……….......6.00%........2.90%............469
8.. Gannett…………………..........6.00%.........3.50%............447
9.. Dominion Resources……….6.00%.........4.31%.............374
Total all 9…………………………………………8,809 (yeah, $8.8 bil)
For the most recent six years, the related estimated total State Corporate Income Tax Loopholes Taken, as I have defined them above, by these nine large Virginia Corps, was $4.8 bil, as compared to $8.8 bil for the past twelve years.
Excluded from the above lists is McLean, VA based Freddie Mac, even though it generated total pretax profits of $43.8 bil for the nine years from 1998 to 2006. More than offsetting these profits were its huge pretax losses totaling $72.9 bil for the most recent three years from 2007 to 2009.
Once the US Government gets Fannie, Freddie, and the horrible housing crisis back on track, I don’t see why Fannie shouldn’t then start paying income taxes to Washington DC, and why Freddie shouldn’t then start paying more state income taxes. Likewise, I think that Reston, VA based SLM (Sallie Mae), included in the above lists, should be paying much more state corporate income taxes to many US States. All three of these companies are getting the benefit of many city and state services, so why shouldn’t they have to pay for them, like other companies do?
Looking at the first above list, you’ll find NVR, a Reston, VA based home builder. I think it is really telling that this is the only home builder in the country I have seen so far which made over $5 bil in Total Pretax Income for the most recent twelve years. Also, unlike the other home builders, NVR has made a profit in each of the most recent twelve years.
I think the above NVR consistent success story is a salient insight into why the US government just hasn’t executed in helping its desperate US citizens, who live outside the Beltway Bubble. Things just aren’t that bad economically in the greater DC area, and the US government employees, including the US Congress and key Administrative personnel, just haven’t felt the economic pain that the rest of the US citizenry has experienced. This is a main reason why there is such rage in the country.
Let me add to this thought. Falls Church, VA based US government contractor General Dynamics was also excluded from the above list, even though it generated Total Pretax Income of $24.2 bil in the past twelve years. It didn't disclose all of its Current State Corporate Income Tax amounts. It is able to pass on its state corporate income tax costs to the US government in its US government contracts.
General Dynamics has rocked in the Great Recession, with Pretax Profits of $7,117 mil for the most recent two years of 2008 and 2009. In comparison, in the decade earlier two years (1998 and 1999), its Pretax Profits were only $2,030 mil. That’s a 251% profit increase in the very troubled past decade.
But it’s not just General Dynamics that has flourished during this Great Recession, but also the other huge US government contractors. The other three huge US government contractors with a substantial portion of their sales to the US government are Lockheed Martin, Northrop Grumman and Raytheon.
These four US government contractors generated Net Sales in just 2009 of $128.7 bil, an increase of 91% over a decade ago in 1999 of $67.5 bil. That’s bad enough, but much worse is that the Total Pretax Income of these four US government contractors totaled $13.0 bil in 2009, up a much more substantial 227% over the $4.0 bil earned a decade earlier in 1999. Given how horrible the US economy is, there is no way that the US government should be permitting its huge US government contractors to be generating obscene profits like this, on the backs of US citizens, and also on the back of the US Deficit. The only industry I have seen that has topped the huge US defense contractors in obscene profit growth of the past decade is Big Oil.
US government employees need a wake-up call. It is only fair that the horrible economic recession and jobless recovery be shared by them, as well as by the many US government contractors…..and it’s not happening. Private sector employees, as well as the unemployed, are enraged over how US government employees have been protected, and even rewarded, during this horrible recession and jobless recovery.
And US government employees have done so little to help the US get out of its deep recession and jobless recovery. A clear illustration of this is how the GSA executed during the Economic Stimulus…..and also, from first-hand experience, how the IRS continues to function….it needs a complete overhaul. The IRS acts as a clear impediment to US economic growth and to job creation.
Anyway, I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by drastically reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Saturday, November 27, 2010
Florida Big Corps Have Mostly Paid Higher Amounts of State Corporate Income Taxes Than Big Corps in Other US States
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Florida, I found no really huge Florida Corps, like I have in every other large State, and I only found seven fairly large Florida Corps with Total Consolidated Pretax Income of more than $4 bil each, for the most recent 12 years.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these seven fairly large Florida Corps. These seven Florida Corps below had a weighted average state corporate effective income tax rate paid of 3.22%, or only a 41% discount to Florida’s low current state corporate income tax rate of 5.50%.
….……………………...........................Current………………….......State
….…………………….............................State....Consolidated..Effective
….…………………….............................Tax………..Pretax…….Tax Rate
….…………………….............................Paid……...Income……….Paid
….……………….….............................(Millions of Dollars)
..7. Darden Restaurants....................216………4,895……......4.41%
..6. Health Management Associates..180.........4,089…….....4.40%
..5. Publix Super Markets…………......647.…….14,783…….....4.38%
..4. AutoNation……………………..........219.……...5,382*……....4.07%
..3. Fidelity National Finanical.........268**…...7,268……......3.69%
..2. CSX….........................................255……...12,133……......2.10%
..1. FPL Group..................................281***...15,603…….....1.80%
Total all 7………............................2,066…......64,153…….....3.22%
* Exclusive of Asset Impairment Charges of $2.1 bil
** Both current state income tax and deferred state tax expense combined
*** Also includes provision for unrecognized state income tax benefits
I have excluded Carnival Corporation from the above list of seven Florida large Corps. Carnival has an SEC State Location of Florida, but it was excluded from the Fortune Magazine rankings of the largest US corporations. Carnival made $19.1 bil of Total Consolidated Pretax Income in the past twelve years, but because of its special income tax exemptions, has paid very miniscule amounts of US federal and US state income taxes. Some people would call this a pretty healthy tax loophole.
I have also excluded Royal Caribbean Cruises from the above list for the same reason that Carnival was excluded. Royal Caribbean Cruises made $5.2 bil of Total Consolidated Pretax Income in the past twelve years, and like Carnival, also had special income tax exemptions.
If both Carnival Corporation and Royal Caribbean Cruises were added to the above list of seven large Florida Corps, the State Tax Paid number would remain unchanged, the Pretax Income number increases to $88,374 mil, and the Effective State Corporate Income Tax Rate Paid decreases from 3.22% to only 2.34%, which is a 57% discount to Florida's state corporate income tax rate of 5.50%.
I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by significantly increasing state university tuition.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit. In the Florida Gulf Region directly impacted by the Gulf Oil spill, I think I would give bonus investment tax credit percentages for capital expenditures made, and I would also give bonus tax depreciation for real property additions made in the rental property, retail, lodging and leisure industries.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these seven fairly large Florida Corps. These seven Florida Corps below had a weighted average state corporate effective income tax rate paid of 3.22%, or only a 41% discount to Florida’s low current state corporate income tax rate of 5.50%.
….……………………...........................Current………………….......State
….…………………….............................State....Consolidated..Effective
….…………………….............................Tax………..Pretax…….Tax Rate
….…………………….............................Paid……...Income……….Paid
….……………….….............................(Millions of Dollars)
..7. Darden Restaurants....................216………4,895……......4.41%
..6. Health Management Associates..180.........4,089…….....4.40%
..5. Publix Super Markets…………......647.…….14,783…….....4.38%
..4. AutoNation……………………..........219.……...5,382*……....4.07%
..3. Fidelity National Finanical.........268**…...7,268……......3.69%
..2. CSX….........................................255……...12,133……......2.10%
..1. FPL Group..................................281***...15,603…….....1.80%
Total all 7………............................2,066…......64,153…….....3.22%
* Exclusive of Asset Impairment Charges of $2.1 bil
** Both current state income tax and deferred state tax expense combined
*** Also includes provision for unrecognized state income tax benefits
I have excluded Carnival Corporation from the above list of seven Florida large Corps. Carnival has an SEC State Location of Florida, but it was excluded from the Fortune Magazine rankings of the largest US corporations. Carnival made $19.1 bil of Total Consolidated Pretax Income in the past twelve years, but because of its special income tax exemptions, has paid very miniscule amounts of US federal and US state income taxes. Some people would call this a pretty healthy tax loophole.
I have also excluded Royal Caribbean Cruises from the above list for the same reason that Carnival was excluded. Royal Caribbean Cruises made $5.2 bil of Total Consolidated Pretax Income in the past twelve years, and like Carnival, also had special income tax exemptions.
If both Carnival Corporation and Royal Caribbean Cruises were added to the above list of seven large Florida Corps, the State Tax Paid number would remain unchanged, the Pretax Income number increases to $88,374 mil, and the Effective State Corporate Income Tax Rate Paid decreases from 3.22% to only 2.34%, which is a 57% discount to Florida's state corporate income tax rate of 5.50%.
I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by significantly increasing state university tuition.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit. In the Florida Gulf Region directly impacted by the Gulf Oil spill, I think I would give bonus investment tax credit percentages for capital expenditures made, and I would also give bonus tax depreciation for real property additions made in the rental property, retail, lodging and leisure industries.
Friday, November 26, 2010
North Carolina Big Corps Have Paid Mostly Modest Amounts of State Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in North Carolina, I found 14 large corps with Total Consolidated Core Pretax Income of more than $4 bil each, for the most recent 12 years. My definition of Core Pretax Income excludes large Asset Impairments.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated core pretax income, both in total for the past twelve years for each of these 14 large North Carolina Corps. These 14 large North Carolina Corps below had a weighted average state corporate effective income tax rate paid of a 3.13%, or a 55% discount to North arolina’s current state corporate income tax rate of 6.90%.
….……………………......................Current………………Core......State
….……………………........................State.....Consolidated..Effective
….……………………........................Tax………...Pretax………Tax Rate
….……………………........................Paid……....Income……….Paid
….……………….…..........................(Millions of Dollars)
14. Progress Energy……................641….......9,005……......7.12%
13. Reynolds American….............903…......13,642…….....6.62%
12. Lorillard(2004-2009)............471..........7,870...........5.98%
11. Laboratory Corp of America…358……....6,145…….......5.83%
10. Lowe’s…...............................1,560……..33,927……......4.60%
..9. Family Dollar Stores…….........163…........4,376……......3.72%
..8. Bank of America..................5,453…….178,093…….....3.06%
..7. Duke Energy………..................729……...30,602………...2.38%
..6. Nucor......................................341……..14,537……......2.35%
..5. VF Corp...................................180……….7,685……......2.34%
..4. Wachovia..............................1,290……..61,531……......2.10%
..3. Goodrich…................................95………..5,391……......1.76%
..1. BB&T.......................................334…......20,637…….....1.62%
..1. Jefferson Pilot(1998-2005).........0..........6,190...........0.00%
Total all 14………......................12,518…....399,631…….....3.13%
As you can see from the above list, as with many other states, the state corporate income tax rates paid by North Carolina’s financial companies is much lower than it is for companies in other industries.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by the 9 large North Carolina Corps with total such tax loopholes of at least $250 mil each for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current North Carolina Corporate Income Tax Rate of 6.90% by the total Consolidated Pretax Income of each large North Carolina Corp for the last twelve years. Then, I subtracted the actual total State Income Tax Paid by each of these Corps for the same twelve years.
……………………….........................NC……......State……..Resultant
………………….........….............Corporate..Effective.......Higher
………………….........………….........Tax……..Tax Rate…...State Tax
………………..........…………...........Rate……....Paid…....Last 12 Years
…………………………………………………....................(Millions of dollars)
1.. Bank of America…………........6.90%......3.06%...........6,835
2.. Wachovia.............................6.90%......2.10%...........2,956
3.. Duke Energy………................6.90%.......2.38%..........1,383
4.. BB&T………...........................6.90%.......1.62%..........1,090
5.. Lowe’s…………......................6.90%.......4.60%.............781
6.. Nucor………..........................6.90%.......2.35%.............662
7.. Jefferson Pilot....................6.90%.......0.00%.............427
8.. VF Corp......………………….....6.90%.......2.34%.............350
9.. Goodrich……………………......6.90%........1.76%.............277
Total all 9…………………………………………14,761 (yeah, $14.8 bil)
For the most recent six years, the related estimated total State Corporate Income Tax Loopholes Taken, as I have defined them above, by these 9 large North Carolina Corps, was $8.3 bil, as compared to $14.8 bil for the past twelve years.
It’s pretty clear from the above list, that if a State wants to collect more state income tax money from North Carolina Big companies, then it would be wise to focus on North Carolina’s Big banks.
I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by significantly increasing state university tuition.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
When you think about it, the North Carolina Research Triangle area has historically been a hotbed for incredible innovative expertise, which is presently somewhat dormant. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit the key Research Triangle area to thrive economically. Clearly, smart research tax credits and investment tax credit incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, green energy, and medical science.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated core pretax income, both in total for the past twelve years for each of these 14 large North Carolina Corps. These 14 large North Carolina Corps below had a weighted average state corporate effective income tax rate paid of a 3.13%, or a 55% discount to North arolina’s current state corporate income tax rate of 6.90%.
….……………………......................Current………………Core......State
….……………………........................State.....Consolidated..Effective
….……………………........................Tax………...Pretax………Tax Rate
….……………………........................Paid……....Income……….Paid
….……………….…..........................(Millions of Dollars)
14. Progress Energy……................641….......9,005……......7.12%
13. Reynolds American….............903…......13,642…….....6.62%
12. Lorillard(2004-2009)............471..........7,870...........5.98%
11. Laboratory Corp of America…358……....6,145…….......5.83%
10. Lowe’s…...............................1,560……..33,927……......4.60%
..9. Family Dollar Stores…….........163…........4,376……......3.72%
..8. Bank of America..................5,453…….178,093…….....3.06%
..7. Duke Energy………..................729……...30,602………...2.38%
..6. Nucor......................................341……..14,537……......2.35%
..5. VF Corp...................................180……….7,685……......2.34%
..4. Wachovia..............................1,290……..61,531……......2.10%
..3. Goodrich…................................95………..5,391……......1.76%
..1. BB&T.......................................334…......20,637…….....1.62%
..1. Jefferson Pilot(1998-2005).........0..........6,190...........0.00%
Total all 14………......................12,518…....399,631…….....3.13%
As you can see from the above list, as with many other states, the state corporate income tax rates paid by North Carolina’s financial companies is much lower than it is for companies in other industries.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by the 9 large North Carolina Corps with total such tax loopholes of at least $250 mil each for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current North Carolina Corporate Income Tax Rate of 6.90% by the total Consolidated Pretax Income of each large North Carolina Corp for the last twelve years. Then, I subtracted the actual total State Income Tax Paid by each of these Corps for the same twelve years.
……………………….........................NC……......State……..Resultant
………………….........….............Corporate..Effective.......Higher
………………….........………….........Tax……..Tax Rate…...State Tax
………………..........…………...........Rate……....Paid…....Last 12 Years
…………………………………………………....................(Millions of dollars)
1.. Bank of America…………........6.90%......3.06%...........6,835
2.. Wachovia.............................6.90%......2.10%...........2,956
3.. Duke Energy………................6.90%.......2.38%..........1,383
4.. BB&T………...........................6.90%.......1.62%..........1,090
5.. Lowe’s…………......................6.90%.......4.60%.............781
6.. Nucor………..........................6.90%.......2.35%.............662
7.. Jefferson Pilot....................6.90%.......0.00%.............427
8.. VF Corp......………………….....6.90%.......2.34%.............350
9.. Goodrich……………………......6.90%........1.76%.............277
Total all 9…………………………………………14,761 (yeah, $14.8 bil)
For the most recent six years, the related estimated total State Corporate Income Tax Loopholes Taken, as I have defined them above, by these 9 large North Carolina Corps, was $8.3 bil, as compared to $14.8 bil for the past twelve years.
It’s pretty clear from the above list, that if a State wants to collect more state income tax money from North Carolina Big companies, then it would be wise to focus on North Carolina’s Big banks.
I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by significantly increasing state university tuition.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
When you think about it, the North Carolina Research Triangle area has historically been a hotbed for incredible innovative expertise, which is presently somewhat dormant. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit the key Research Triangle area to thrive economically. Clearly, smart research tax credits and investment tax credit incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, green energy, and medical science.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Wednesday, November 24, 2010
Ohio Big Corps Have Paid Modest Amounts of State and Local Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Ohio, I found 21 large corps with Total Consolidated Pretax Income of more than $4 bil, for the most recent 12 years.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 21 large Ohio Corps. These 21 large Ohio Corps below had a weighted average state and local corporate effective income tax rate paid of a modest 2.29%.
….……………………..................Current…………………......State
….……………………....................State...Consolidated..Effective
….……………………....................Tax……….Pretax………Tax Rate
….……………………....................Paid……..Income……….Paid
….……………….…....................(Millions of Dollars)
21. First Energy………………....1,047……...16,613………..6.30%
20. Macy’s…………………….........730……....12,318*………5.93%
19. Abercrombie & Fitch...........238….......4,600………..5.17%
18. Limited Brands….................564……...12,203………..4.62%
17. Sherwin Williams.................275….......6,837………..4.02%
16. Cintas…………………..............172…........4,850………...3.55%
15. Kroger…………......................641…......18,518*...…….3.46%
14. Keycorp…….........................335….....11,770……......2.85%
13. Cardinal Health...................488……..17,663…….......2.76%
12. Duke Energy Ohio/Cinergy..147..........5,997*..........2.45%
11. National City Corp…............497……..24,178……......2.06%
10. Parker Hannifin……………......161….......8,143……......1.98%
..9. American Electric Power.....276……..17,237…….....1.60%
..8. Fifth Third Bancorp……….....244……..15,467………...1.58%
..7. Procter&Gamble...............1,765…..120,702……......1.46%
..6. Owens Illinois Group..............69.........5,002*..........1.38%
..5. Eaton.....................................82……….8,539……......0.96%
..4. American Financial Group.....19……….4,635……......0.41%
..1. Nationwide Financial Svcs…....0……….4,805……......0.00%
..1. Cincinnati Financial................0**......6,984............0.00%
..1. The Progressive Corp..............0……...11,934……......0.00%
Total all 21………....................7,750…....338,995…….....2.29%
* Exclusive of large Asset Impairment Charges
** No mention of State Income Taxes, therefore assumed none were paid.
For the most recent year, the weighted state corporate effective income tax rate paid by these 21 large Ohio Corps was an even lower 1.47%.
There is a massive divergence between the state and local corporate income tax rates paid by Ohio’s retailers and its financial companies. Ohio retailers have paid much higher state and local corporate income tax rates, as you can see by three Ohio retailers being in the top four in the above list. On the other hand, four financial companies are at the very bottom of the list.
And there are so few manufacturers on the above list. The severe recession has really devastated Ohio’s manufacturing sector, just like it has hurt manufacturers all throughout the country’s Rust Belt….particularly in Pennsylvania, Michigan, Wisconsin, and Indiana.
Only six of the 50 US States now don't have state corporate income taxes. Ohio is one of the six, since it switched from a Franchise Tax to now some version of a Gross Receipts Tax, which it phased in starting in 2005. However, many Ohio Big Corps still pay Corporate State Income Taxes to other states. These 44 US States plus Washington DC, which have state corporate income taxes, have an average Corporate State Income Tax Rate of 7.44%, which is close to the related median tax rate of 7.30%.
It seems to me that Ohio’s switch from an income-based Franchise Tax to a Gross Receipts Tax has substantially benefited the giant, powerful Procter & Gamble, at the expense of nearly all other Ohio’s manufacturers. Procter & Gamble’s net margin percentage (i.e. Pretax Income divided by Net Sales) just towers over all other Ohio manufacturers, as you can see from the following table.
……………………………………………..........Most Recent Two Years…...
……………………………………………………...Pretax……....................Net
......Ohio Corp………………...HQs……....Income….Net Sales….Margin
…………………………………………..............(millions of dollars)
Procter&Gamble.....Cincinnati...29,460...155,632...18.9%
14 Other Ohio Largest Traditional Manufacturers
Owens Illinois…………....Perrysburg……1,313…….14,952……8.8%
Parker Hannifin…………..Cleveland……..1,437……20,302…...7.1%
Eaton……………………......Cleveland……..1,443…….27,249……5.3%
Timken…………………......Canton…………...346……....8,183……4.2%
Owens Corning…………...Toledo…………...199……...10,650…..1.9%
Goodyear Tire…………....Akron…………..(171)….....35,789….(0.5)%
AK Steel……………….......West Chester….(104)……..11.721….(0.9)%
Worthington Industries.Columbus……...(63)……....4,574…..(1.4)%
Polyone………………….....Avon Lake…….(116)……....4,800….(2.4)%
Cooper Tire…………….....Findlay………...(142)……....5,815….(2.4)%
Ferro……………………......Cleveland……...(100)……...3,903….(2.6)%
Nacco Industries………..Cleveland……...(392)……...5,976….(6.6)%
NewPage Holding……….Miamisburg…...(512)……....7,462….(6.9)%
Dana Holding………….....Maumee……..(1,098)….....13,323…(8.2)%
Total 14 Other Than P&G..............2,040.....174,699.....1.2%
Whereas, for the two most recent years, these above 14 largest Ohio traditional manufacturers other than Procter & Gamble had total net sales of $174,699 mil, 12% above that of Procter & Gamble, these 14 companies only had total Pretax Income of $2,040 mil, a miniscule 7% of Procter & Gamble’s Pretax Income of $29,460 mil. Thus, the huge, very powerful Procter & Gamble cleans up with the new Ohio Gross Receipts Tax vs. the previous Franchise Tax, which was based on income. And these other manufacturers get nailed with substantial Ohio Gross Receipts Tax, even though their profit is very modest. And 9 of these 14 manufacturers even had Pretax Losses for the most recent two years.
Particularly in these very troubled economic times, it seems to me that another really good argument for Ohio to have a State Corporate Income Tax, rather than a Gross Receipts Tax, is that when the giant Procter & Gamble repatriates any of its massive amounts of presently Unremitted Foreign Earnings, the State of Ohio’s financial coffers should be significantly enhanced.
Here’s Procter & Gamble’s Unremitted Foreign Earnings amount at the end of its four most recent fiscal years:
June 30, 2010…..$30 bil
June 30, 2009…..$25 bil
June 30, 2008…..$21 bil
June 30, 2007…..$17 bil
Now that is what I call a huge amount of Unremitted Foreign Earnings. It’s also what I call substantial annual growth in the build up of this key Unremitted Foreign Earnings number. Just think what Procter & Gamble’s Unremitted Foreign Earnings will be down the road.
In its fiscal year ended June 30, 2006, Procter & Gamble repatriated $7.2 bil of its foreign earnings. In its annual report footnotes, there is no mention of any state income tax paid connected with this foreign earnings repatriation. My hunch is that is so because Ohio switched to a Gross Receipts Tax from its previous Income-based Franchise Tax.
I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by significantly increasing state university tuition.
And particularly in Ohio’s case, I think a wisely targeted, very healthy refundable investment tax credit would be very helpful to prop up the very troubled manufacturing sector.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit, with a bonus percentage for capital expenditures made by the very troubled Rust Belt manufacturers, like those in Ohio. I wouldn't give the bonus investment tax credit percentage to huge companies like Procter & Gamble. I think something has seriously gone wrong when one company like Procter & Gamble is able to generate pretax profits which are more than 14 times the total profits of the 14 next largest manufacturers in Ohio.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 21 large Ohio Corps. These 21 large Ohio Corps below had a weighted average state and local corporate effective income tax rate paid of a modest 2.29%.
….……………………..................Current…………………......State
….……………………....................State...Consolidated..Effective
….……………………....................Tax……….Pretax………Tax Rate
….……………………....................Paid……..Income……….Paid
….……………….…....................(Millions of Dollars)
21. First Energy………………....1,047……...16,613………..6.30%
20. Macy’s…………………….........730……....12,318*………5.93%
19. Abercrombie & Fitch...........238….......4,600………..5.17%
18. Limited Brands….................564……...12,203………..4.62%
17. Sherwin Williams.................275….......6,837………..4.02%
16. Cintas…………………..............172…........4,850………...3.55%
15. Kroger…………......................641…......18,518*...…….3.46%
14. Keycorp…….........................335….....11,770……......2.85%
13. Cardinal Health...................488……..17,663…….......2.76%
12. Duke Energy Ohio/Cinergy..147..........5,997*..........2.45%
11. National City Corp…............497……..24,178……......2.06%
10. Parker Hannifin……………......161….......8,143……......1.98%
..9. American Electric Power.....276……..17,237…….....1.60%
..8. Fifth Third Bancorp……….....244……..15,467………...1.58%
..7. Procter&Gamble...............1,765…..120,702……......1.46%
..6. Owens Illinois Group..............69.........5,002*..........1.38%
..5. Eaton.....................................82……….8,539……......0.96%
..4. American Financial Group.....19……….4,635……......0.41%
..1. Nationwide Financial Svcs…....0……….4,805……......0.00%
..1. Cincinnati Financial................0**......6,984............0.00%
..1. The Progressive Corp..............0……...11,934……......0.00%
Total all 21………....................7,750…....338,995…….....2.29%
* Exclusive of large Asset Impairment Charges
** No mention of State Income Taxes, therefore assumed none were paid.
For the most recent year, the weighted state corporate effective income tax rate paid by these 21 large Ohio Corps was an even lower 1.47%.
There is a massive divergence between the state and local corporate income tax rates paid by Ohio’s retailers and its financial companies. Ohio retailers have paid much higher state and local corporate income tax rates, as you can see by three Ohio retailers being in the top four in the above list. On the other hand, four financial companies are at the very bottom of the list.
And there are so few manufacturers on the above list. The severe recession has really devastated Ohio’s manufacturing sector, just like it has hurt manufacturers all throughout the country’s Rust Belt….particularly in Pennsylvania, Michigan, Wisconsin, and Indiana.
Only six of the 50 US States now don't have state corporate income taxes. Ohio is one of the six, since it switched from a Franchise Tax to now some version of a Gross Receipts Tax, which it phased in starting in 2005. However, many Ohio Big Corps still pay Corporate State Income Taxes to other states. These 44 US States plus Washington DC, which have state corporate income taxes, have an average Corporate State Income Tax Rate of 7.44%, which is close to the related median tax rate of 7.30%.
It seems to me that Ohio’s switch from an income-based Franchise Tax to a Gross Receipts Tax has substantially benefited the giant, powerful Procter & Gamble, at the expense of nearly all other Ohio’s manufacturers. Procter & Gamble’s net margin percentage (i.e. Pretax Income divided by Net Sales) just towers over all other Ohio manufacturers, as you can see from the following table.
……………………………………………..........Most Recent Two Years…...
……………………………………………………...Pretax……....................Net
......Ohio Corp………………...HQs……....Income….Net Sales….Margin
…………………………………………..............(millions of dollars)
Procter&Gamble.....Cincinnati...29,460...155,632...18.9%
14 Other Ohio Largest Traditional Manufacturers
Owens Illinois…………....Perrysburg……1,313…….14,952……8.8%
Parker Hannifin…………..Cleveland……..1,437……20,302…...7.1%
Eaton……………………......Cleveland……..1,443…….27,249……5.3%
Timken…………………......Canton…………...346……....8,183……4.2%
Owens Corning…………...Toledo…………...199……...10,650…..1.9%
Goodyear Tire…………....Akron…………..(171)….....35,789….(0.5)%
AK Steel……………….......West Chester….(104)……..11.721….(0.9)%
Worthington Industries.Columbus……...(63)……....4,574…..(1.4)%
Polyone………………….....Avon Lake…….(116)……....4,800….(2.4)%
Cooper Tire…………….....Findlay………...(142)……....5,815….(2.4)%
Ferro……………………......Cleveland……...(100)……...3,903….(2.6)%
Nacco Industries………..Cleveland……...(392)……...5,976….(6.6)%
NewPage Holding……….Miamisburg…...(512)……....7,462….(6.9)%
Dana Holding………….....Maumee……..(1,098)….....13,323…(8.2)%
Total 14 Other Than P&G..............2,040.....174,699.....1.2%
Whereas, for the two most recent years, these above 14 largest Ohio traditional manufacturers other than Procter & Gamble had total net sales of $174,699 mil, 12% above that of Procter & Gamble, these 14 companies only had total Pretax Income of $2,040 mil, a miniscule 7% of Procter & Gamble’s Pretax Income of $29,460 mil. Thus, the huge, very powerful Procter & Gamble cleans up with the new Ohio Gross Receipts Tax vs. the previous Franchise Tax, which was based on income. And these other manufacturers get nailed with substantial Ohio Gross Receipts Tax, even though their profit is very modest. And 9 of these 14 manufacturers even had Pretax Losses for the most recent two years.
Particularly in these very troubled economic times, it seems to me that another really good argument for Ohio to have a State Corporate Income Tax, rather than a Gross Receipts Tax, is that when the giant Procter & Gamble repatriates any of its massive amounts of presently Unremitted Foreign Earnings, the State of Ohio’s financial coffers should be significantly enhanced.
Here’s Procter & Gamble’s Unremitted Foreign Earnings amount at the end of its four most recent fiscal years:
June 30, 2010…..$30 bil
June 30, 2009…..$25 bil
June 30, 2008…..$21 bil
June 30, 2007…..$17 bil
Now that is what I call a huge amount of Unremitted Foreign Earnings. It’s also what I call substantial annual growth in the build up of this key Unremitted Foreign Earnings number. Just think what Procter & Gamble’s Unremitted Foreign Earnings will be down the road.
In its fiscal year ended June 30, 2006, Procter & Gamble repatriated $7.2 bil of its foreign earnings. In its annual report footnotes, there is no mention of any state income tax paid connected with this foreign earnings repatriation. My hunch is that is so because Ohio switched to a Gross Receipts Tax from its previous Income-based Franchise Tax.
I think it makes much more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by significantly increasing state university tuition.
And particularly in Ohio’s case, I think a wisely targeted, very healthy refundable investment tax credit would be very helpful to prop up the very troubled manufacturing sector.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit, with a bonus percentage for capital expenditures made by the very troubled Rust Belt manufacturers, like those in Ohio. I wouldn't give the bonus investment tax credit percentage to huge companies like Procter & Gamble. I think something has seriously gone wrong when one company like Procter & Gamble is able to generate pretax profits which are more than 14 times the total profits of the 14 next largest manufacturers in Ohio.
Washington DC Larger Corps Have Paid Modest Amounts of State and Local Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Washington DC, I found three corps with Total Consolidated Pretax Income of more than $4 bil each in the most recent dozen years.
Below here is the effective state and local corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these three larger Washington DC Corps. These three larger Washington DC Corps below had a weighted average state and local corporate effective income tax rate paid of only 2.66%, or a 73% discount to Washington DC’s current local corporate income tax rate of 9.975%.
….……………………..........Current…………………..........State&Local
….…………………….......State&Local.....Consolidated....Effective
….…………………….......Income Tax……….Pretax………..Tax Rate
….…………………….............Paid……........Income………...Paid
….……………….…...............(Millions of Dollars)
..3. Washington Post……...221...............4,734…........4.67%
..2. Pepco Holdings...........142……........4,234….........3.35%
..1. Danaher......................188…..........11,749…….....1.60%
Total all 3………..................551….........20,717……....2.66%
To show how the weighted average effective state and local corporate income tax rate paid by these three Washington DC firms has been declining, this tax rate paid was a much lower 1.65% for the most recent six years, and an even lower 0.68% for the most recent year.
And then, below here is a summary of what I call a fair measure of the Total State and Local Corporate Income Tax Loopholes Taken by each of these three larger Washington DC Corps for the past twelve years. In estimating what I think is a fair measurement of State and Local Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Washington DC Corporate Income Tax Rate of 9.975% by the total Consolidated Pretax Income of each larger Washington DC Corp for the last twelve years. Then, I subtracted the actual total State and Local Corporate Income Taxes Paid by each of these Corps for the same twelve years.
………………………......................DC…....State&Local…Resultant
………………….........…..........Corporate…..Effective.......Higher
………………….........…………......Tax……....Tax Rate...State&Local Tax
………………..........…………........Rate……......Paid…....Last 12 Years
……………………………………………………..................(mils of dollars)
1.. Danaher..........................9.975%.......1.60%...........984
2.. Pepco Holdings ..............9.975%.......3.35%...........280
3.. Washington Post…………..9.975%.......4.67%...........251
Total all 3………………………………………….1,515 (yeah, $1.5 bil)
For the most recent six years, the estimated total State Corporate Income Tax Loopholes Taken by these three Washington DC Corps was $1.1 bil, as compared to $1.5 bil for the past twelve years.
I think it makes much more sense to balance a City’s budget by closing some of the larger Corp State and Local Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State and Local Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
The huge Washington DC-based Fannie Mae was excluded from the above large companies because, even though it generated total pretax profits of $58.1 bil for the nine years from 1998 to 2006, it experienced huge pretax losses totaling $122.7 bil for the most recent three years from 2007 to 2009.
Once the US Government gets Fannie, Freddie, and the horrible housing crisis back on track (granted the US government so far has not executed very well on the housing crisis, but it will eventually figure it out that massive wisely-designed mortgage loan principal reductions on underwater mortgages is the only true long-term fix here), I don’t see why Fannie shouldn’t then start paying income taxes to Washington DC, and why Freddie shouldn’t then start paying state income taxes to the State of Virginia. These companies are getting the benefit of many city and state services, so why shouldn’t they have to pay for them, like other companies do?
Below here is the effective state and local corporate income tax rates paid, which are computed by dividing the current state and local corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these three larger Washington DC Corps. These three larger Washington DC Corps below had a weighted average state and local corporate effective income tax rate paid of only 2.66%, or a 73% discount to Washington DC’s current local corporate income tax rate of 9.975%.
….……………………..........Current…………………..........State&Local
….…………………….......State&Local.....Consolidated....Effective
….…………………….......Income Tax……….Pretax………..Tax Rate
….…………………….............Paid……........Income………...Paid
….……………….…...............(Millions of Dollars)
..3. Washington Post……...221...............4,734…........4.67%
..2. Pepco Holdings...........142……........4,234….........3.35%
..1. Danaher......................188…..........11,749…….....1.60%
Total all 3………..................551….........20,717……....2.66%
To show how the weighted average effective state and local corporate income tax rate paid by these three Washington DC firms has been declining, this tax rate paid was a much lower 1.65% for the most recent six years, and an even lower 0.68% for the most recent year.
And then, below here is a summary of what I call a fair measure of the Total State and Local Corporate Income Tax Loopholes Taken by each of these three larger Washington DC Corps for the past twelve years. In estimating what I think is a fair measurement of State and Local Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Washington DC Corporate Income Tax Rate of 9.975% by the total Consolidated Pretax Income of each larger Washington DC Corp for the last twelve years. Then, I subtracted the actual total State and Local Corporate Income Taxes Paid by each of these Corps for the same twelve years.
………………………......................DC…....State&Local…Resultant
………………….........…..........Corporate…..Effective.......Higher
………………….........…………......Tax……....Tax Rate...State&Local Tax
………………..........…………........Rate……......Paid…....Last 12 Years
……………………………………………………..................(mils of dollars)
1.. Danaher..........................9.975%.......1.60%...........984
2.. Pepco Holdings ..............9.975%.......3.35%...........280
3.. Washington Post…………..9.975%.......4.67%...........251
Total all 3………………………………………….1,515 (yeah, $1.5 bil)
For the most recent six years, the estimated total State Corporate Income Tax Loopholes Taken by these three Washington DC Corps was $1.1 bil, as compared to $1.5 bil for the past twelve years.
I think it makes much more sense to balance a City’s budget by closing some of the larger Corp State and Local Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State and Local Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
The huge Washington DC-based Fannie Mae was excluded from the above large companies because, even though it generated total pretax profits of $58.1 bil for the nine years from 1998 to 2006, it experienced huge pretax losses totaling $122.7 bil for the most recent three years from 2007 to 2009.
Once the US Government gets Fannie, Freddie, and the horrible housing crisis back on track (granted the US government so far has not executed very well on the housing crisis, but it will eventually figure it out that massive wisely-designed mortgage loan principal reductions on underwater mortgages is the only true long-term fix here), I don’t see why Fannie shouldn’t then start paying income taxes to Washington DC, and why Freddie shouldn’t then start paying state income taxes to the State of Virginia. These companies are getting the benefit of many city and state services, so why shouldn’t they have to pay for them, like other companies do?
Iowa Big Corps Have Paid Modest Amounts of State Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Iowa, I only found two Big Corps…..Principal Financial Group and Rockwell Collins…and then there’s quite a gap to the third largest.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for both of these large Iowa Corps. These two larger Iowa Corps below had a weighted average state corporate effective income tax rate paid of only 2.65%, or a huge 78% discount to Iowa’s current state corporate income tax rate of 12.00%. Iowa has the highest state corporate income tax rate in the country, and by quite a bit, with all the others being below 10%.
….…………………….....................Current…………………......State
….…………………….......................State...Consolidated..Effective
….…………………….......................Tax……….Pretax………Tax Rate
….…………………….......................Paid……..Income……….Paid
….……………….….......................(Millions of Dollars)
..2. Principal Financial Group....390*……...9,622……...4.05%
..1. Rockwell Collins....................48…….....6,900……...0.70%
Total of both……….....................438…......16,522……...2.65%
* Principal Financial Group combined its state corporate income tax paid or currently payable and its foreign income tax paid or payable together. Thus, its state income tax paid should be even lower than the above $390 mil.
For the most recent year, the total weighted state effective corporate income tax rate for these two Iowa Corps was an even lower 1.10%.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by these two larger Iowa Corps for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Iowa Corporate Income Tax Rate of 12% by the total Consolidated Pretax Income of both of these larger Iowa Corps for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by these two Corps for the same twelve years.
………………………........................IA…….....State……..Resultant
………………….........…............Corporate…Effective.......Higher
………………….........…………........Tax……..Tax Rate…...State Tax
………………..........…………..........Rate……....Paid…....Last 12 Years
………………………………………………….....................(mils of dollars)
1.. Rockwell Collins................12.00%......0.70%............780
2.. Principal Financial Group..12.00%......4.05%............765
Total of 2………………………………………….1,545 (yeah, $1.5 bil)
For the past six years, the estimated total State Corporate Income Tax Loopholes Taken by these two Iowa Corps was $1.0 bil, as compared to $1.5 bil for the past twelve years.
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
Having a daughter who recently worked in Iowa for AmeriCorps on green initiatives, it seems to me that Iowans are a hearty bunch, very hard-working, and exceptionally self reliant. Thus, I think some wise tax investment incentives, particularly the investment tax credit, would go a long way to spurring Iowa’s economy, and markedly help job creation there.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for both of these large Iowa Corps. These two larger Iowa Corps below had a weighted average state corporate effective income tax rate paid of only 2.65%, or a huge 78% discount to Iowa’s current state corporate income tax rate of 12.00%. Iowa has the highest state corporate income tax rate in the country, and by quite a bit, with all the others being below 10%.
….…………………….....................Current…………………......State
….…………………….......................State...Consolidated..Effective
….…………………….......................Tax……….Pretax………Tax Rate
….…………………….......................Paid……..Income……….Paid
….……………….….......................(Millions of Dollars)
..2. Principal Financial Group....390*……...9,622……...4.05%
..1. Rockwell Collins....................48…….....6,900……...0.70%
Total of both……….....................438…......16,522……...2.65%
* Principal Financial Group combined its state corporate income tax paid or currently payable and its foreign income tax paid or payable together. Thus, its state income tax paid should be even lower than the above $390 mil.
For the most recent year, the total weighted state effective corporate income tax rate for these two Iowa Corps was an even lower 1.10%.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by these two larger Iowa Corps for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Iowa Corporate Income Tax Rate of 12% by the total Consolidated Pretax Income of both of these larger Iowa Corps for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by these two Corps for the same twelve years.
………………………........................IA…….....State……..Resultant
………………….........…............Corporate…Effective.......Higher
………………….........…………........Tax……..Tax Rate…...State Tax
………………..........…………..........Rate……....Paid…....Last 12 Years
………………………………………………….....................(mils of dollars)
1.. Rockwell Collins................12.00%......0.70%............780
2.. Principal Financial Group..12.00%......4.05%............765
Total of 2………………………………………….1,545 (yeah, $1.5 bil)
For the past six years, the estimated total State Corporate Income Tax Loopholes Taken by these two Iowa Corps was $1.0 bil, as compared to $1.5 bil for the past twelve years.
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
Having a daughter who recently worked in Iowa for AmeriCorps on green initiatives, it seems to me that Iowans are a hearty bunch, very hard-working, and exceptionally self reliant. Thus, I think some wise tax investment incentives, particularly the investment tax credit, would go a long way to spurring Iowa’s economy, and markedly help job creation there.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Tuesday, November 23, 2010
Colorado Larger Corps Have Mostly Paid Modest Amounts of State Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Colorado, I found 8 Corps with Total Core Consolidated Pretax Income of more than $3 bil each in the last dozen years. Excluded from Core Pretax Income were large Asset Impairment Charges.
The huge Qwest Communications was excluded because it experienced huge pretax losses totaling $31.8 bil from 2001 to 2005.
Below here is the effective state and local corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 8 larger Colorado Corps. These 8 larger Colorado Corps below had a weighted average state corporate effective income tax rate paid of 2.52%, or a 46% discount to Colorado’s current state corporate income tax rate of 4.63%. Colorado has the lowest state corporate income tax rate of all 44 US States that have them.
….……………………................Current………………….....State&Local
….…………………….............State&Local.Consolidated..Effective
….……………………..................Tax………...Pretax………..Tax Rate
….……………………..................Paid……....Income………...Paid
….……………….…....................(Millions of Dollars)
8. DISH Network…................205.............3,828.….......5.36%
7. First Data (2001-08).........333.............6,582..........5.06%
6. Janus Capital Group...........181.............5,229..........3.46%
5. Western Union (2003-09)..215............8,334..........2.58%
4. Ball Corp…………………..........86…..........3,360…….....2.56%
3. Molson Coors Brewing........75……........3,959…........1.89%
2. Cimarex Energy (2000-09).24.............3,284..........0.73%
1. Newmont Mining...................0…….......9,795…….....0.00%
Total all 8………....................1,119….........44,371……....2.52%
For the most recent year, these 8 larger Colorado Corps had a weighted state effective corporate income tax rate of a lower 2.15%.
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
When you think about it, the Denver area has all of this incredible innovative expertise that is presently much more dormant than it should be. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit the key Denver area to thrive economically. Clearly, smart tax incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, and green energy.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
The huge Qwest Communications was excluded because it experienced huge pretax losses totaling $31.8 bil from 2001 to 2005.
Below here is the effective state and local corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 8 larger Colorado Corps. These 8 larger Colorado Corps below had a weighted average state corporate effective income tax rate paid of 2.52%, or a 46% discount to Colorado’s current state corporate income tax rate of 4.63%. Colorado has the lowest state corporate income tax rate of all 44 US States that have them.
….……………………................Current………………….....State&Local
….…………………….............State&Local.Consolidated..Effective
….……………………..................Tax………...Pretax………..Tax Rate
….……………………..................Paid……....Income………...Paid
….……………….…....................(Millions of Dollars)
8. DISH Network…................205.............3,828.….......5.36%
7. First Data (2001-08).........333.............6,582..........5.06%
6. Janus Capital Group...........181.............5,229..........3.46%
5. Western Union (2003-09)..215............8,334..........2.58%
4. Ball Corp…………………..........86…..........3,360…….....2.56%
3. Molson Coors Brewing........75……........3,959…........1.89%
2. Cimarex Energy (2000-09).24.............3,284..........0.73%
1. Newmont Mining...................0…….......9,795…….....0.00%
Total all 8………....................1,119….........44,371……....2.52%
For the most recent year, these 8 larger Colorado Corps had a weighted state effective corporate income tax rate of a lower 2.15%.
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
When you think about it, the Denver area has all of this incredible innovative expertise that is presently much more dormant than it should be. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit the key Denver area to thrive economically. Clearly, smart tax incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, and green energy.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Oregon Big Corps Have Paid Modest Amounts of State Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Oregon, I only found two Big Corps…..Nike and Precision Castparts…and then there’s quite a gap to the third largest.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for both of these large Oregon Corps. These two larger Oregon Corps below had a weighted average state corporate effective income tax rate paid of only 2.69%, or a 66% discount to Oregon’s current state corporate income tax rate of 7.90%.
….……………………...............Current…………………......State
….…………………….................State...Consolidated..Effective
….…………………….................Tax……….Pretax………Tax Rate
….…………………….................Paid……..Income……….Paid
….……………….….................(Millions of Dollars)
..2. Nike…………...................532……...19,355……...2.75%
..1. Precision Castparts........188……....7,368……...2.55%
Total of both………...............720….....26,723……...2.69%
For the most recent year, the total weighted state effective corporate income tax rate for these two Oregon Corps was an even lower 2.17%.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by these two larger Oregon Corps for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Oregon Corporate Income Tax Rate of 7.90% by the total Consolidated Pretax Income of both of these larger Oregon Corps for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by these two Corps for the same twelve years.
……………………….....................OR…….....State……..Resultant
………………….........….........Corporate…Effective.......Higher
………………….........………….....Tax……..Tax Rate…...State Tax
………………..........………….......Rate……....Paid…....Last 12 Years
…………………………………………………...................(Millions of dollars)
1.. Nike...…………................7.90%.......2.75%.............997
2.. Precision Castparts.......7.90%.......2.55%.............394
Total of 2………………………………………….1,391 (yeah, $1.4 bil)
For the past six years, the estimated total State Corporate Income Tax Loopholes Taken by these two Oregon Corps was $1.1 bil, as compared to $1.4 bil for the past twelve years.
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
When you think about it, the Portland area is a hotbed for young, very bright citizens. However, the Portland area has all of this incredible innovative expertise that is presently dormant. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit the key Portland area to thrive economically. Clearly, smart tax incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, and green energy.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Also, from a fairness standpoint, the above effective Corporate State Income Tax Rate Paid in the most recent year by these two Oregon Corps of only 2.17% is substantially below the Oregon current individual state income tax rate, which is 9.0% for income from $7,650 to $125,000, 10.8% for income from $125,000 to $250,000, and 11.0% for income above $250,000.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for both of these large Oregon Corps. These two larger Oregon Corps below had a weighted average state corporate effective income tax rate paid of only 2.69%, or a 66% discount to Oregon’s current state corporate income tax rate of 7.90%.
….……………………...............Current…………………......State
….…………………….................State...Consolidated..Effective
….…………………….................Tax……….Pretax………Tax Rate
….…………………….................Paid……..Income……….Paid
….……………….….................(Millions of Dollars)
..2. Nike…………...................532……...19,355……...2.75%
..1. Precision Castparts........188……....7,368……...2.55%
Total of both………...............720….....26,723……...2.69%
For the most recent year, the total weighted state effective corporate income tax rate for these two Oregon Corps was an even lower 2.17%.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by these two larger Oregon Corps for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Oregon Corporate Income Tax Rate of 7.90% by the total Consolidated Pretax Income of both of these larger Oregon Corps for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by these two Corps for the same twelve years.
……………………….....................OR…….....State……..Resultant
………………….........….........Corporate…Effective.......Higher
………………….........………….....Tax……..Tax Rate…...State Tax
………………..........………….......Rate……....Paid…....Last 12 Years
…………………………………………………...................(Millions of dollars)
1.. Nike...…………................7.90%.......2.75%.............997
2.. Precision Castparts.......7.90%.......2.55%.............394
Total of 2………………………………………….1,391 (yeah, $1.4 bil)
For the past six years, the estimated total State Corporate Income Tax Loopholes Taken by these two Oregon Corps was $1.1 bil, as compared to $1.4 bil for the past twelve years.
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
When you think about it, the Portland area is a hotbed for young, very bright citizens. However, the Portland area has all of this incredible innovative expertise that is presently dormant. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit the key Portland area to thrive economically. Clearly, smart tax incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, and green energy.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Also, from a fairness standpoint, the above effective Corporate State Income Tax Rate Paid in the most recent year by these two Oregon Corps of only 2.17% is substantially below the Oregon current individual state income tax rate, which is 9.0% for income from $7,650 to $125,000, 10.8% for income from $125,000 to $250,000, and 11.0% for income above $250,000.
Delaware’s One Big Corp Dupont Has Paid Very Little State Corporate Income Tax
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Delaware, I only found one Big Corp…Dupont.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for Dupont. Dupont’s weighted average state corporate effective income tax rate paid of only 0.28% is an incredible 97% discount to Delaware’s current state corporate income tax rate of 8.70%.
….……………………...............Current…………………......State
….…………………….................State...Consolidated..Effective
….…………………….................Tax……….Pretax………Tax Rate
….…………………….................Paid……..Income……….Paid
….……………….….................(Millions of Dollars)
..1. DuPont...........................93…….....33,513……...0.28%
In the most recent year, Dupont’s state effective corporate income tax rate was a negative 0.41%.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loophole Taken by Dupont for the past twelve years, at least the way I measure it. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Delaware Corporate Income Tax Rate of 8.70% by the total Consolidated Pretax Income of Dupont for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by Dupont for the same twelve years.
……………………….....................DE…….....State……..Resultant
………………….........….........Corporate…Effective.......Higher
………………….........………….....Tax……..Tax Rate…...State Tax
………………..........………….......Rate……....Paid…....Last 12 Years
…………………………………………………...................(Millions of dollars)
1.. Dupont...…………............8.70%.......0.28%............2,823
I think it makes much more sense to balance a State’s budget by closing some of the Big Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
In addition, I think it makes sense to use some of the funds from the closing of these Big Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
Also, from a fairness standpoint, the above effective Corporate State Income Tax Rate Paid by Dupont in the past twelve years of only 0.28% is substantially below the Delaware current individual income tax rate, which is 5.55% for income from $25,000 to $60,000, and 6.95% for income above $60,000.
Lastly, since this post relates to the State of Delaware, I should point out that one of the numerous state corporate income tax loopholes that many Big Corps take advantage of to avoid state income tax is what is called the “Delaware Holding Company Tax Loophole”. A Big Corp parent company establishes a wholly-owned subsidiary in Delaware, which is really just a shell company. The Big Corp parent then transfers trademarks and/or other assets to this Delaware Holding Company, and the parent pays fees for the use of the assets transferred….a very slick state corporate income tax avoidance transaction, that I think really has no economic substance other than to avoid state corporate income taxes.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for Dupont. Dupont’s weighted average state corporate effective income tax rate paid of only 0.28% is an incredible 97% discount to Delaware’s current state corporate income tax rate of 8.70%.
….……………………...............Current…………………......State
….…………………….................State...Consolidated..Effective
….…………………….................Tax……….Pretax………Tax Rate
….…………………….................Paid……..Income……….Paid
….……………….….................(Millions of Dollars)
..1. DuPont...........................93…….....33,513……...0.28%
In the most recent year, Dupont’s state effective corporate income tax rate was a negative 0.41%.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loophole Taken by Dupont for the past twelve years, at least the way I measure it. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Delaware Corporate Income Tax Rate of 8.70% by the total Consolidated Pretax Income of Dupont for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by Dupont for the same twelve years.
……………………….....................DE…….....State……..Resultant
………………….........….........Corporate…Effective.......Higher
………………….........………….....Tax……..Tax Rate…...State Tax
………………..........………….......Rate……....Paid…....Last 12 Years
…………………………………………………...................(Millions of dollars)
1.. Dupont...…………............8.70%.......0.28%............2,823
I think it makes much more sense to balance a State’s budget by closing some of the Big Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
In addition, I think it makes sense to use some of the funds from the closing of these Big Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
Also, from a fairness standpoint, the above effective Corporate State Income Tax Rate Paid by Dupont in the past twelve years of only 0.28% is substantially below the Delaware current individual income tax rate, which is 5.55% for income from $25,000 to $60,000, and 6.95% for income above $60,000.
Lastly, since this post relates to the State of Delaware, I should point out that one of the numerous state corporate income tax loopholes that many Big Corps take advantage of to avoid state income tax is what is called the “Delaware Holding Company Tax Loophole”. A Big Corp parent company establishes a wholly-owned subsidiary in Delaware, which is really just a shell company. The Big Corp parent then transfers trademarks and/or other assets to this Delaware Holding Company, and the parent pays fees for the use of the assets transferred….a very slick state corporate income tax avoidance transaction, that I think really has no economic substance other than to avoid state corporate income taxes.
Monday, November 22, 2010
Rhode Island Larger Corps Have Paid Fairly Modest Amounts of State Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Rhode Island, I found three corps with healthy State Corporate Income Tax Loopholes Taken of at least $250 mil each, at least the way I measure them, in the most recent dozen years. Rhode Island has one giant corporation…CVS Caremark.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these three larger Rhode Island Corps. These three larger Rhode Island Corps below had a weighted average state corporate effective income tax rate paid of 4.81%, or a 47% discount to Rhode Island’s current state corporate income tax rate of 9.00%.
….……………………...............Current…………………......State
….…………………….................State...Consolidated..Effective
….…………………….................Tax……….Pretax………Tax Rate
….…………………….................Paid……..Income……….Paid
….……………….….................(Millions of Dollars)
..3. CVS Caremark..............1,596……..27,592……...5.78%
..2. Textron…………...............239……....8,123……...2.94%
..1. Hasbro..............................32……....3,140……...1.02%
Total all 3………..................1,867…....38,855……...4.81%
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by each of these three larger Rhode Island for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Rhode Island Corporate Income Tax Rate of 9.00% by the total Consolidated Pretax Income of each larger Rhode Island Corp for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by each of these Corps for the same twelve years.
……………………….....................RI…….....State……..Resultant
………………….........….........Corporate…Effective.......Higher
………………….........………….....Tax……..Tax Rate…...State Tax
………………..........………….......Rate……....Paid…....Last 12 Years
…………………………………………………...................(Millions of dollars)
1.. CVS Caremark...…………...9.00%.......5.78%.............887
2.. Textron...........................9.00%.......2.94%............492
3.. Hasbro……………..............9.00%.......1.02%.............251
Total all 3………………………………………….1,630 (yeah, $1.6 bil)
For the past six years, the estimated total State Corporate Income Tax Loopholes Taken was $1.2 bil, as compared to $1.6 bil for the past twelve years.
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refunable investment tax credit.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these three larger Rhode Island Corps. These three larger Rhode Island Corps below had a weighted average state corporate effective income tax rate paid of 4.81%, or a 47% discount to Rhode Island’s current state corporate income tax rate of 9.00%.
….……………………...............Current…………………......State
….…………………….................State...Consolidated..Effective
….…………………….................Tax……….Pretax………Tax Rate
….…………………….................Paid……..Income……….Paid
….……………….….................(Millions of Dollars)
..3. CVS Caremark..............1,596……..27,592……...5.78%
..2. Textron…………...............239……....8,123……...2.94%
..1. Hasbro..............................32……....3,140……...1.02%
Total all 3………..................1,867…....38,855……...4.81%
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by each of these three larger Rhode Island for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current Rhode Island Corporate Income Tax Rate of 9.00% by the total Consolidated Pretax Income of each larger Rhode Island Corp for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by each of these Corps for the same twelve years.
……………………….....................RI…….....State……..Resultant
………………….........….........Corporate…Effective.......Higher
………………….........………….....Tax……..Tax Rate…...State Tax
………………..........………….......Rate……....Paid…....Last 12 Years
…………………………………………………...................(Millions of dollars)
1.. CVS Caremark...…………...9.00%.......5.78%.............887
2.. Textron...........................9.00%.......2.94%............492
3.. Hasbro……………..............9.00%.......1.02%.............251
Total all 3………………………………………….1,630 (yeah, $1.6 bil)
For the past six years, the estimated total State Corporate Income Tax Loopholes Taken was $1.2 bil, as compared to $1.6 bil for the past twelve years.
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refunable investment tax credit.
Friday, November 19, 2010
Michigan Big Corps Have Paid Very Modest Amounts of State Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Michigan, I found six corps with healthy State Corporate Income Tax Loopholes Taken, at least the way I measure them, in the last dozen years.
General Motors was excluded from this below list because of its huge pretax losses, which totaled $58.5 bil for the four years from 2005 to 2008. GMAC was also excluded, even though it registered total pretax profits of $24.8 bil in the years from 1998 to 2005, when it was 100% owned by GM. However, all of these GMAC profits were already included in GM’s total earnings. Since GM sold 51% of GMAC in November 2006, GMAC has generated pretty hefty aggregate losses.
Ford was included in the below list, even though it generated $33.4 bil of pretax losses in the three years from 2006 to 2008. Ford more than made up for those losses, when in the three years from 1998 to 2000 (ahh, those Clinton Economic years), Ford registered pretax profits totaling $42.4 bil. In those same three Clinton years, even General Motors generated pretax profits, which totalled $21.1 bil.
The many publicly-held auto suppliers in Michigan were also excluded from the list. Nearly all of them generated substantial losses. More on that later.
DTE Energy generated Total Pretax Income of $7,089 mil for the past 12 years. It was excluded from the below list of Michigan Big Corps since it did not disclose its State Corporate Income Tax Paid in all years.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these Big Michigan Corps. These six Big Michigan Corps below had a weighted average state corporate effective income tax rate paid of a very modest 2.15%. This is substantially below Michigan’s current state corporate income tax rate that starts at 4.95% of income, but then added to this 4.95% tax rate is the lesser of $6 mil or of another 22% of 4.95% of income, or an additional 1.09%.
….……………………...............Current…………………..........State
….…………………….................State.....Consolidated....Effective
….…………………….................Tax………...Pretax………..Tax Rate
….…………………….................Paid……....Income………...Paid
….……………….…...................(Millions of Dollars)
..6. Masco...........................366……......9,593…….......3.82%
..5. Stryker….......................265............9,333.…........2.84%
..4. Kellogg……………….........338…….....14,419…….......2.34%
..3. Whirlpool……................116.............6,071….........1.91%
..2. Ford…...........................210……....12,078…..........1.74%
..1. Dow Chemical...............422…….....28,200…….......1.50%
Total all 6………...............1,717…........79,694…….......2.15%
I think it makes much more sense to balance a State’s budget by closing some of the Big Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
But also, I think it makes sense to use some of the funds from the closing of these Michigan Big Corp State Income Tax Loopholes to provide some wise, highly stimulative, job-creating tax incentives to small and medium-sized businesses, and particularly ones targeted at the severely depressed auto supplier industry.
After reviewing tons of the SEC filings of Michigan auto suppliers, with substantial losses after losses, years on end, it is pretty clear to me why there was such widespread dissatisfaction with both the Federal and State Governments, as shown in the recent November 2010 election.
What the Obama Administration did to prop up General Motors was absolutely necessary, or else the country’s unemployment rates would have increased substantially, and particularly so in states with a heavy automobile and automobile supplier industry like Michigan. And for many US citizens to now be so visibly upset that the recent General Motors IPO was successful is frankly unpatriotic.
But the problem in the US auto industry is much too severe to be solved by a somewhat rejuvenated General Motors, which was revived from the ashes. What I think is needed are substantial smartly-designed business tax incentives to help rescue all of these auto suppliers, who are now on life support. Their losses have just been so substantial, and for so many years, while the Government just ignored this massive problem.
I would prefer seeing something like the investment tax credit, but with a bonus percentage in very hard hit areas of the country like Detroit, and some other parts of Michigan. And other places hit hard by offshoring of manufacturing jobs should also get the benefit of a bonus investment tax credit. And places like New Orleans, ravished by both Katrina and the BP oil spill, should get this bonus investment tax credit, as well.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit, with a bonus percentage for capital expenditures made by the very troubled Rust Belt manufacturers, like those in Michigan. I wouldn't give the bonus investment tax credit percentage to huge companies.
A healthy business research tax credit program is also needed for Michigan. There are all of these very bright, innovative people connected with the second best public research university in the world, the University of Michigan….second only to Cal-Berkeley…..and somehow this Wolverine think tank should be better utilized to foster Michigan’s economic recovery. There should be some strong government incentives to make this happen.
And until this happens, I can’t understand why elected members of the US House and the US Senate are being so mean-spirited with some of these many unemployed by cutting off their unemployment compensation benefits. It’s not the fault of the Michigan unemployed that the US auto industry went down the tubes. It’s really the fault of many in the laissez-faire US government who ignored this problem for so many years. And at the same time, these same US politicians were fostering the offshoring of Michigan manufacturing jobs, which added substantial amounts of kindling to this ravishing fire.
And the hypocrisy of voting down unemployment benefits under the pretense of Deficit Reduction! Just looking at a couple of the Dow Industrials, these same US politicians strongly support measures that permitted:
…..Exxon Mobil to pay no federal income taxes in 2009, instead letting them get a federal income tax refund of more than $800 mil, when in the same year, Exxon Mobil earned consolidated pretax income of more than $35 bil.
….. Verizon Communiations to pay no federal income taxes in 2009, instead letting them get a federal income tax refund of more than $600 mil, when in the same year, Verizon earned pretax income of more than $11 bil.
….. Merck to pay no federal income taxes in 2009, when in the same year, it earned consolidated pretax income of more than $15 bil.
…..GE to pay no federal income taxes in 2009, instead letting them get a federal income tax refund of more than $800 mil, when in the same year, GE earned consolidated pretax income of more than $10 bil.
…..GE to pay no federal income taxes in 2008, instead letting them get a federal income tax refund of more than $700 mil, when in the same year, GE earned consolidated pretax income of more than $19 bil.
…..GE to pay no federal income taxes in total for the four years 2006 through 2009, instead letting them get a federal income tax refund of more than $1.5 bil, when in those same four years, GE earned consolidated pretax income of more than $82 bil.
And further, these same US politicians protect the so many, huge Big Corp federal and state corporate income tax loopholes. By closing many of these tax loopholes, both the US and State Budgets would be substantially strengthened.
Also, these same US politicians, and even including some Democrats, are trying to pass all of these annual Tax Extenders, clearly being lobbied by special interest groups to do so. And what is their proposal to pay for this massive cost? Well, it is not paid for, instead their proposal is to increase the US Deficit. They won't extend unemployment compensation for the unfortunate because it increases the US Deficit. But they will pass Tax Extenders for Corporate special interests, and for the wealthy, without paying for it. These mean-spirited politicians must get called out, and even better yet, must be voted out of office.
And now these same US politicians want to reduce the top individual income tax rates, which would benefit the very wealthy to the tune of $700 bil over the next ten years, which would also, at the same time, substantially increase the US Deficit. So the logic here is that it is OK to increase the US Deficit for tax cuts for the rich, who don't need the money, but it is not OK to increase the US Deficit for paying for unemployment benefits for the poor, who desperately need the money to survive? Give me a break! What kind of a society have we become?
And then lastly, from a fairness standpoint, the above weighted average effective Michigan Corporate State Income Tax Rates Paid by these six Big Corps in the past twelve years of 2.15% is low in comparison with Michigan’s current individual income tax rate of 4.35%.
General Motors was excluded from this below list because of its huge pretax losses, which totaled $58.5 bil for the four years from 2005 to 2008. GMAC was also excluded, even though it registered total pretax profits of $24.8 bil in the years from 1998 to 2005, when it was 100% owned by GM. However, all of these GMAC profits were already included in GM’s total earnings. Since GM sold 51% of GMAC in November 2006, GMAC has generated pretty hefty aggregate losses.
Ford was included in the below list, even though it generated $33.4 bil of pretax losses in the three years from 2006 to 2008. Ford more than made up for those losses, when in the three years from 1998 to 2000 (ahh, those Clinton Economic years), Ford registered pretax profits totaling $42.4 bil. In those same three Clinton years, even General Motors generated pretax profits, which totalled $21.1 bil.
The many publicly-held auto suppliers in Michigan were also excluded from the list. Nearly all of them generated substantial losses. More on that later.
DTE Energy generated Total Pretax Income of $7,089 mil for the past 12 years. It was excluded from the below list of Michigan Big Corps since it did not disclose its State Corporate Income Tax Paid in all years.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these Big Michigan Corps. These six Big Michigan Corps below had a weighted average state corporate effective income tax rate paid of a very modest 2.15%. This is substantially below Michigan’s current state corporate income tax rate that starts at 4.95% of income, but then added to this 4.95% tax rate is the lesser of $6 mil or of another 22% of 4.95% of income, or an additional 1.09%.
….……………………...............Current…………………..........State
….…………………….................State.....Consolidated....Effective
….…………………….................Tax………...Pretax………..Tax Rate
….…………………….................Paid……....Income………...Paid
….……………….…...................(Millions of Dollars)
..6. Masco...........................366……......9,593…….......3.82%
..5. Stryker….......................265............9,333.…........2.84%
..4. Kellogg……………….........338…….....14,419…….......2.34%
..3. Whirlpool……................116.............6,071….........1.91%
..2. Ford…...........................210……....12,078…..........1.74%
..1. Dow Chemical...............422…….....28,200…….......1.50%
Total all 6………...............1,717…........79,694…….......2.15%
I think it makes much more sense to balance a State’s budget by closing some of the Big Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
But also, I think it makes sense to use some of the funds from the closing of these Michigan Big Corp State Income Tax Loopholes to provide some wise, highly stimulative, job-creating tax incentives to small and medium-sized businesses, and particularly ones targeted at the severely depressed auto supplier industry.
After reviewing tons of the SEC filings of Michigan auto suppliers, with substantial losses after losses, years on end, it is pretty clear to me why there was such widespread dissatisfaction with both the Federal and State Governments, as shown in the recent November 2010 election.
What the Obama Administration did to prop up General Motors was absolutely necessary, or else the country’s unemployment rates would have increased substantially, and particularly so in states with a heavy automobile and automobile supplier industry like Michigan. And for many US citizens to now be so visibly upset that the recent General Motors IPO was successful is frankly unpatriotic.
But the problem in the US auto industry is much too severe to be solved by a somewhat rejuvenated General Motors, which was revived from the ashes. What I think is needed are substantial smartly-designed business tax incentives to help rescue all of these auto suppliers, who are now on life support. Their losses have just been so substantial, and for so many years, while the Government just ignored this massive problem.
I would prefer seeing something like the investment tax credit, but with a bonus percentage in very hard hit areas of the country like Detroit, and some other parts of Michigan. And other places hit hard by offshoring of manufacturing jobs should also get the benefit of a bonus investment tax credit. And places like New Orleans, ravished by both Katrina and the BP oil spill, should get this bonus investment tax credit, as well.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit, with a bonus percentage for capital expenditures made by the very troubled Rust Belt manufacturers, like those in Michigan. I wouldn't give the bonus investment tax credit percentage to huge companies.
A healthy business research tax credit program is also needed for Michigan. There are all of these very bright, innovative people connected with the second best public research university in the world, the University of Michigan….second only to Cal-Berkeley…..and somehow this Wolverine think tank should be better utilized to foster Michigan’s economic recovery. There should be some strong government incentives to make this happen.
And until this happens, I can’t understand why elected members of the US House and the US Senate are being so mean-spirited with some of these many unemployed by cutting off their unemployment compensation benefits. It’s not the fault of the Michigan unemployed that the US auto industry went down the tubes. It’s really the fault of many in the laissez-faire US government who ignored this problem for so many years. And at the same time, these same US politicians were fostering the offshoring of Michigan manufacturing jobs, which added substantial amounts of kindling to this ravishing fire.
And the hypocrisy of voting down unemployment benefits under the pretense of Deficit Reduction! Just looking at a couple of the Dow Industrials, these same US politicians strongly support measures that permitted:
…..Exxon Mobil to pay no federal income taxes in 2009, instead letting them get a federal income tax refund of more than $800 mil, when in the same year, Exxon Mobil earned consolidated pretax income of more than $35 bil.
….. Verizon Communiations to pay no federal income taxes in 2009, instead letting them get a federal income tax refund of more than $600 mil, when in the same year, Verizon earned pretax income of more than $11 bil.
….. Merck to pay no federal income taxes in 2009, when in the same year, it earned consolidated pretax income of more than $15 bil.
…..GE to pay no federal income taxes in 2009, instead letting them get a federal income tax refund of more than $800 mil, when in the same year, GE earned consolidated pretax income of more than $10 bil.
…..GE to pay no federal income taxes in 2008, instead letting them get a federal income tax refund of more than $700 mil, when in the same year, GE earned consolidated pretax income of more than $19 bil.
…..GE to pay no federal income taxes in total for the four years 2006 through 2009, instead letting them get a federal income tax refund of more than $1.5 bil, when in those same four years, GE earned consolidated pretax income of more than $82 bil.
And further, these same US politicians protect the so many, huge Big Corp federal and state corporate income tax loopholes. By closing many of these tax loopholes, both the US and State Budgets would be substantially strengthened.
Also, these same US politicians, and even including some Democrats, are trying to pass all of these annual Tax Extenders, clearly being lobbied by special interest groups to do so. And what is their proposal to pay for this massive cost? Well, it is not paid for, instead their proposal is to increase the US Deficit. They won't extend unemployment compensation for the unfortunate because it increases the US Deficit. But they will pass Tax Extenders for Corporate special interests, and for the wealthy, without paying for it. These mean-spirited politicians must get called out, and even better yet, must be voted out of office.
And now these same US politicians want to reduce the top individual income tax rates, which would benefit the very wealthy to the tune of $700 bil over the next ten years, which would also, at the same time, substantially increase the US Deficit. So the logic here is that it is OK to increase the US Deficit for tax cuts for the rich, who don't need the money, but it is not OK to increase the US Deficit for paying for unemployment benefits for the poor, who desperately need the money to survive? Give me a break! What kind of a society have we become?
And then lastly, from a fairness standpoint, the above weighted average effective Michigan Corporate State Income Tax Rates Paid by these six Big Corps in the past twelve years of 2.15% is low in comparison with Michigan’s current individual income tax rate of 4.35%.
Thursday, November 18, 2010
Wisconsin Larger Corps Have Paid Modest Amounts of State Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in Wisconsin, I found six corps with healthy State Corporate Income Tax Loopholes Taken, at least the way I measure them, in the last dozen years. Marshall & Ilsley was excluded because it experienced huge losses in the most recent two years. In like manner, MGIC Investment Corp was excluded since it had large losses in each of the past three years. Fiserv generated Total Pretax Income of $6,237 mil for the past 12 years, but wasn't included in the below list of Wisconsin Big Corps, since its estimated State Corporate Income Tax Loopholes Taken were below $200 mil.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these six larger Wisconsin Corps. These six larger Wisconsin Corps below had a weighted average state corporate effective income tax rate paid of a modest 2.79%, or a 65% discount to Wisconsin’s current state corporate income tax rate of 7.90%.
….……………………...............Current…………………..........State
….…………………….................State.....Consolidated....Effective
….…………………….................Tax………...Pretax………..Tax Rate
….…………………….................Paid……....Income………...Paid
….……………….…...................(Millions of Dollars)
..6. Kohl’s............................497…….....13,133…….....3.78%
..5. Harley Davidson….........364...........11,215.….......3.25%
..4. Johnson Controls………..350…….....11,069…….....3.16%
..3. Associated Banc………......52............3,215….........1.62%
..2. Manpower…....................47…….......3,631…........1.29%
..1. Rockwell Automation......34…….......5,860…….....0.58%
Total all 6……….................1,344…........48,123…….....2.79%
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
After reviewing the SEC filings of Wisconsin manufacturing company after manufacturing company, it is pretty clear to me why there was such widespread dissatisfaction with both the Federal and State Government, as shown in the recent November 2010 election. Either nobody in government is listening to these many manufacturing people in the State of Wisconsin, or even worse, they are listening but the Government just isn't able to execute. Wisconsin has all of this incredible manufacturing innovative expertise that is presently dormant, for the most part. It needs to be unleashed in order to make the US more competitive on the world scene. And more importantly, it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit these many Wisconsin manufacturing companies to thrive. Clearly, smart business tax incentives are needed here, like investment tax credits, research tax credits, and jobs tax credits.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit, with a bonus percentage for capital expenditures made by the very troubled Rust Belt manufacturers, like those in Wisconsin. I wouldn't give the bonus investment tax credit percentage to huge companies.
And then lastly, from a fairness standpoint, the above weighted average effective Wisconsin Corporate State Income Tax Rates Paid by these six larger Corps in the past twelve years of 2.79% is very low in comparison with Wisconsin’s current individual income tax rate of 6.5% on income above $20,500 and up to $153,280.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these six larger Wisconsin Corps. These six larger Wisconsin Corps below had a weighted average state corporate effective income tax rate paid of a modest 2.79%, or a 65% discount to Wisconsin’s current state corporate income tax rate of 7.90%.
….……………………...............Current…………………..........State
….…………………….................State.....Consolidated....Effective
….…………………….................Tax………...Pretax………..Tax Rate
….…………………….................Paid……....Income………...Paid
….……………….…...................(Millions of Dollars)
..6. Kohl’s............................497…….....13,133…….....3.78%
..5. Harley Davidson….........364...........11,215.….......3.25%
..4. Johnson Controls………..350…….....11,069…….....3.16%
..3. Associated Banc………......52............3,215….........1.62%
..2. Manpower…....................47…….......3,631…........1.29%
..1. Rockwell Automation......34…….......5,860…….....0.58%
Total all 6……….................1,344…........48,123…….....2.79%
I think it makes much more sense to balance a State’s budget by closing some of the larger Corp State Corporate Income Tax Loopholes, rather than by significantly reducing critical state services like education and citizen protection.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
After reviewing the SEC filings of Wisconsin manufacturing company after manufacturing company, it is pretty clear to me why there was such widespread dissatisfaction with both the Federal and State Government, as shown in the recent November 2010 election. Either nobody in government is listening to these many manufacturing people in the State of Wisconsin, or even worse, they are listening but the Government just isn't able to execute. Wisconsin has all of this incredible manufacturing innovative expertise that is presently dormant, for the most part. It needs to be unleashed in order to make the US more competitive on the world scene. And more importantly, it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit these many Wisconsin manufacturing companies to thrive. Clearly, smart business tax incentives are needed here, like investment tax credits, research tax credits, and jobs tax credits.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit, with a bonus percentage for capital expenditures made by the very troubled Rust Belt manufacturers, like those in Wisconsin. I wouldn't give the bonus investment tax credit percentage to huge companies.
And then lastly, from a fairness standpoint, the above weighted average effective Wisconsin Corporate State Income Tax Rates Paid by these six larger Corps in the past twelve years of 2.79% is very low in comparison with Wisconsin’s current individual income tax rate of 6.5% on income above $20,500 and up to $153,280.
Wednesday, November 17, 2010
New York Big Corps Have Paid Modest Amounts of State Corporate Income Taxes
In performing a quick review of SEC filings of large corps with an SEC State Location Code in New York, I found 30 New York Corps with State Corporate Income Tax Loopholes Taken, at least the way I measure them, of at least $300 mil each, in the last dozen years. I excluded two large companies which Fortune Magazine says are headquartered in New York (Alcoa and Travelers), because their SEC State Location Codes were in Pennsylvania and Minnesota, respectively.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated Core Pretax Income exclusive of huge Asset Impairment Charges, both in total for the past twelve years for each of these 30 Big New York Corps. These 30 Big New York Corps below had a weighted average state corporate effective income tax rate paid of a very modest 2.52%, or a 65% discount to New York’s current state corporate income tax rate of 7.10%. This discount would be even significantly higher if the New York City Statutory Corporate Income Tax rate were added to the 7.10% New York State Corporate Income Tax Rate. Many of these 30 huge New York Corps are headquartered in New York City.
….……………………...................Current…………………......State
….…………………….....................State..Consolidated..Effective
….…………………….....................Tax……….Pretax………...Tax
….…………………….....................Paid……..Income……….Rate
….……………….….....................(Millions of Dollars)
30. Bank of New York Mellon..1,183……..21,569……..5.48%
29. Marsh & McLennan……….....628……..13,961……..4.50%
28. Loews……………….................849.…….18,971……..4.48%
27. Time Warner....................1,237........28,134........4.40%
26. Time Warner Cable.............445........10,558........4.21%
25. Verizon Communications.3,372……133,814……..4.01%
24. Morgan Stanley………….....2,652…….67,759……..3.91%
23. JP Morgan Chase………......4,289…...121,908……..3.52%
22. Altria Group…………….......4,371…...143,203……..3.05%
21. Citigroup….......................4,081…...140,068……..2.91%
20. Goldman Sachs…………......2,553…….96,605……..2.82%
19. News Corp…………….............577…….22,798……..2.53%
18. American Express…………....990….....45,364……..2.18%
17. Pepsi Bottling………..............131….......6,650……..1.97%
16. M&T Bank………...................175…….....8,962……..1.95%
15. Estee Lauder……..................128….......6,662……..1.92%
14. Omnicom Group……………....248….....13,525....….1.83%
13. Consolidated Edison………….242….....13,344……..1.81%
12. Pfizer……..........................1,920…...109,196……..1.76%
11. Forest Labs………..................136……....8,691……..1.59%
10. Dover……………......................92……....6,493……..1.42%
..9. PepsiCo…………....................868……..63,882……..1.36%
..8. Colgate-Palmolive…............286*……24,982……..1.14%
..7. MetLife...............................309……..28,117……..1.10%
..6. IBM..................................1,510……147,733……..1.02%
..5. Bristol Myers Squibb...........392*……48,462……..0.81%
..4. Avon Products…………...........66……..10,150……..0.65%
..3. ITT……...................................16……….6,779……..0.24%
..2. Phillip Morris International..(15)…….28,064…….(0.05)%
..1. Hess………............................(123)…….21,762…….(0.57)%
Total all 30………....................35,610…1,412,166…….2.52%
* For both Colgate-Palmolive and Bristol Myers Squibb, the above State Corporate Income Tax Paid amounts also include Deferred Income Tax Expense. These two companies decided to not disclose the amount of their State Income Tax Paid, which should be markedly lower than the above combined amounts shown.
For the most recent 2009 year, the weighted state corporate effective income tax rate paid by these Big New York Corps was an even lower 2.13%.
Health Insurance company Assurant generated Total Pretax Income of $5,407 mil in the past 9 years. It was excluded from the above list of New York Big Corps because it didn't disclose its State Income Tax Paid in the most recent three years.
Nine Corps were excluded from the above list of New York Big Corps, even though they generated Total Pretax Income for the past 12 years of more than $5 bil. These nine Corps were excluded because their Total State Corporate Income Tax Loopholes Taken were less than $300 mil each. These nine Corps were CBS, Viacom, McGraw-Hill, Moody's, L-3 Communications, Paychex, Coach, Blackrock, and Eastman Kodak.
I find that by listening to Alicia Keys' Empire State of Mind while reviewing all of these New York numbers…..that the statistics start jumping off the computer screen and start talking to me. Here’s very briefly what they are saying:
…..For a Big Oil company like Hess to be paying no state corporate income taxes in the past 12 years, and instead getting $123 mil in State Corporate income tax refunds, is flat out wrong. I need to later do a more in-depth study of all of Big Oil and its related role in helping (?) US States all over the country get out their horrible fiscal jams.
…..For Phillip Morris International to be paying no state corporate income taxes since it was spun off from the Altria Group is also flat out wrong. So US States reward the company that is exporting overseas all of these health problems caused by their cigarettes?
…..After reviewing hundreds of large companies, the only other highly profitable US Corp that has not paid any State Corporate Income Tax in the past 12 years, and instead got State tax refunds, is Indianapolis-based Eli Lilly.
…..Just like New Jersey Big Pharma, New York’s two Big Pharma (Pfizer and Bristol Myers Squibb) also all have incredibly low state effective corporate income tax rates paid. Big Pharma's shifting of its income overseas has not just hurt the US Government financial coffers, but it also has severely damaged the financial status of US States.
.....I have a gut feeling that in all fairness, many US States should be getting a lot more in State Corporate Income Taxes from New York Big Corps, and frankly from Big Corps of other US States, as well. New York, with its many exceptionally bright, greedy, shady and reckless financial wizards, was a major cause of the country’s severe financial crisis. It only makes sense to me this same kind of financial recklessness also infiltrated the State Corporate Income Tax planning ranks, with the myriad of creative tax loopholes designed by some really bright financial minds. But this was all orchestrated to the severe detriment of both State Government financial coffers and State citizens, many of whom are financially desperate.
…..I think it is high time for New York Big Corps, and all Big Corps all throughout the country, to step up and help US States get out of their horrible financial messes. Big Corps, their stockholders, their bondholders, their Boards of Directors, their executives, and their employees are all getting so many advantages from critical services provided by State and Local Governments, and it is only right that these Big Corps pay a fair amount of State Corporate Income Taxes for these services.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by each of these 30 Big New York Corps for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current New York Corporate Income Tax Rate of 7.10% by the total Consolidated Pretax Income of each Big New York Corp for the last twelve years. Then, I subtracted the actual total State and Local Corporate Income Taxes Paid by each of these Corps for the same twelve years. I have excluded from the 7.10% NY Statutory Corporate Income Tax Rate, the NY City Corporate Income Tax Rate. If this NY City Corporate Income Tax Rates were included, the amounts of total New York Corporate Income Tax Loopholes Taken would be substantially higher than what is shown below. Many of these Big New York Corps are headquartered in New York City.
……………………….........................NY…..........State……....Resultant
………………….........…..............Corporate…...Effective.......Higher
………………….........…………..........Tax…….....Tax Rate…....State Tax
………………..........…………...........Rate……........Paid…...Last 12 Years
…………………………………………………....................(Millions of dollars)
..1. IBM………….......…………….....7.10%..........1.02%...........8,979
..2. Citigroup………….........………7.10%..........2.91%............5,864
..3. Pfizer……………...........……....7.10%..........1.76%............5,833
..4. Altria Group......……….........7.10%..........3.05%............5,796
..5. JP Morgan Chase…………......7.10%..........3.52%............4,366
..6. Verizon Communications…..7.10%..........4.01%...........4,129
..7. Goldman Sachs…….......……..7.10%..........2.82%...........3,880
..8. PepsiCo…………......………......7.10%..........1.36%...........3,668
..9. Bristol Myers Squibb………...7.10%..........0.81%...........3,049
10. American Express……………..7.10%..........2.18%...........2,231
11. Morgan Stanley……........…….7.10%..........3.91%...........2,159
12. Phillip Morris International.7.10%........(0.05)%..........2,008
13. MetLife………………………….....7.10%..........1.10%...........1,687
14. Hess…………………………….......7.10%........(0.57)%..........1,668
15. Colgate-Palmolive…………......7.10%.........1.14%............1,488
16. News Corp………….......………..7.10%.........2.53%............1,042
17. Time Warner........................7.10%..........4.40%..............761
18. Omnicom Group…......………..7.10%.........1.83%...............712
19. Consolidated Edison……….....7.10%.........1.81%...............705
20. Avon Products……………….....7.10%.........0.65%..............655
21. Loews…………......……………...7.10%..........4.48%..............498
22. Forest Labs………….....………..7.10%..........1.59%..............479
23. ITT……………………………........7.10%..........0.24%.............465
24. M&T Bank…………………….......7.10%.........1.95%..............461
25. Dover………………………….......7.10%..........1.42%.............369
26. Marsh & McLennan…………....7.10%.........4.50%.............363
27. Bank of New York Mellon…...7.10%.........5.48%.............348
28. Estee Lauder……………………..7.10%….......1.92%.............345
29. Pepsi Bottling…………………....7.10%..........1.97%.............341
30. Time Warner Cable...............7.10%.........4.21%.............305
Total all 30………………………………………64,654 (yeah, $64.7 bil)
For the most recent six years, the estimated total State Corporate Income Tax Loopholes Taken by these 30 New York Big Corps was $37.6 bil, as compared to $64.7 bil for the past twelve years.
I think it would be helpful to focus on the four huge New York financial corps severely impacted by the financial crisis, and specifically on the period of time before the financial meltdown in 2008. Thus, below here is some key information related to these four firms for the ten-year period from the beginning of 1998 to the end of 2007.
…………………………...............Consolidated…...Effective…..Estimated
…………….........State Corp..…....Pretax……....State Corp…..State Tax
……………….......Tax Paid……....Income……....Tax Rate…...Loophole
…………………………………………….......................Paid………...Taken
…………………………...........10 Years 1998-2007………………............
………………...........(Millions of dollars)……………...........(mils of $s)
Citigroup………...4,466…….....200,222……......2.23%..........9,750
AIG…………….........436*……....112,206…….....0.39%...........7,531
Merrill Lynch……..630…….......33,488……......1.88%...........1,748
Lehman Bros......1,283…….......31,210……......4.11%..............933
Totals………….....6,815….........377,126…….....1.81%..........19,961
*AIG includes both Current and Deferred State Corporate Income Tax combined
Just looking at the above list, I suggest that the rampant financial creativity here doesn’t just happen on a pretax basis. And in the Corporate Income Tax area, it just doesn't happen with Federal Income Taxes.
I think it makes more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by drastically increasing state university tuition.
Also, I think it makes sense to use some of the funds from the closing of these Big Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses. By far the most effective way to reduce a State’s deficit in the long run is to improve significantly State long-term real economic growth, along with the carefully crafted resultant substantial reduction in State unemployment and underemployment rates.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Also, from a fairness standpoint, the above effective New York Corporate State Effective Income Tax Rates Paid by these 30 Big Corps are very low in comparison with New York State’s current individual income tax rates, which for income amounts above $20,000 and up to $200,000, is a substantially higher 6.85%, and then there’s New York City individual income tax, to boot. Granted the stated New York Corporate State Income Tax Rate is a much closer 7.10%, but the state corporate income tax rate actually paid by these Big New York Corps averaged only 2.13% in the most recent year. That substantial tax rate paid variance between New York Big Corps and New York individuals just doesn’t make any sense to me.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated Core Pretax Income exclusive of huge Asset Impairment Charges, both in total for the past twelve years for each of these 30 Big New York Corps. These 30 Big New York Corps below had a weighted average state corporate effective income tax rate paid of a very modest 2.52%, or a 65% discount to New York’s current state corporate income tax rate of 7.10%. This discount would be even significantly higher if the New York City Statutory Corporate Income Tax rate were added to the 7.10% New York State Corporate Income Tax Rate. Many of these 30 huge New York Corps are headquartered in New York City.
….……………………...................Current…………………......State
….…………………….....................State..Consolidated..Effective
….…………………….....................Tax……….Pretax………...Tax
….…………………….....................Paid……..Income……….Rate
….……………….….....................(Millions of Dollars)
30. Bank of New York Mellon..1,183……..21,569……..5.48%
29. Marsh & McLennan……….....628……..13,961……..4.50%
28. Loews……………….................849.…….18,971……..4.48%
27. Time Warner....................1,237........28,134........4.40%
26. Time Warner Cable.............445........10,558........4.21%
25. Verizon Communications.3,372……133,814……..4.01%
24. Morgan Stanley………….....2,652…….67,759……..3.91%
23. JP Morgan Chase………......4,289…...121,908……..3.52%
22. Altria Group…………….......4,371…...143,203……..3.05%
21. Citigroup….......................4,081…...140,068……..2.91%
20. Goldman Sachs…………......2,553…….96,605……..2.82%
19. News Corp…………….............577…….22,798……..2.53%
18. American Express…………....990….....45,364……..2.18%
17. Pepsi Bottling………..............131….......6,650……..1.97%
16. M&T Bank………...................175…….....8,962……..1.95%
15. Estee Lauder……..................128….......6,662……..1.92%
14. Omnicom Group……………....248….....13,525....….1.83%
13. Consolidated Edison………….242….....13,344……..1.81%
12. Pfizer……..........................1,920…...109,196……..1.76%
11. Forest Labs………..................136……....8,691……..1.59%
10. Dover……………......................92……....6,493……..1.42%
..9. PepsiCo…………....................868……..63,882……..1.36%
..8. Colgate-Palmolive…............286*……24,982……..1.14%
..7. MetLife...............................309……..28,117……..1.10%
..6. IBM..................................1,510……147,733……..1.02%
..5. Bristol Myers Squibb...........392*……48,462……..0.81%
..4. Avon Products…………...........66……..10,150……..0.65%
..3. ITT……...................................16……….6,779……..0.24%
..2. Phillip Morris International..(15)…….28,064…….(0.05)%
..1. Hess………............................(123)…….21,762…….(0.57)%
Total all 30………....................35,610…1,412,166…….2.52%
* For both Colgate-Palmolive and Bristol Myers Squibb, the above State Corporate Income Tax Paid amounts also include Deferred Income Tax Expense. These two companies decided to not disclose the amount of their State Income Tax Paid, which should be markedly lower than the above combined amounts shown.
For the most recent 2009 year, the weighted state corporate effective income tax rate paid by these Big New York Corps was an even lower 2.13%.
Health Insurance company Assurant generated Total Pretax Income of $5,407 mil in the past 9 years. It was excluded from the above list of New York Big Corps because it didn't disclose its State Income Tax Paid in the most recent three years.
Nine Corps were excluded from the above list of New York Big Corps, even though they generated Total Pretax Income for the past 12 years of more than $5 bil. These nine Corps were excluded because their Total State Corporate Income Tax Loopholes Taken were less than $300 mil each. These nine Corps were CBS, Viacom, McGraw-Hill, Moody's, L-3 Communications, Paychex, Coach, Blackrock, and Eastman Kodak.
I find that by listening to Alicia Keys' Empire State of Mind while reviewing all of these New York numbers…..that the statistics start jumping off the computer screen and start talking to me. Here’s very briefly what they are saying:
…..For a Big Oil company like Hess to be paying no state corporate income taxes in the past 12 years, and instead getting $123 mil in State Corporate income tax refunds, is flat out wrong. I need to later do a more in-depth study of all of Big Oil and its related role in helping (?) US States all over the country get out their horrible fiscal jams.
…..For Phillip Morris International to be paying no state corporate income taxes since it was spun off from the Altria Group is also flat out wrong. So US States reward the company that is exporting overseas all of these health problems caused by their cigarettes?
…..After reviewing hundreds of large companies, the only other highly profitable US Corp that has not paid any State Corporate Income Tax in the past 12 years, and instead got State tax refunds, is Indianapolis-based Eli Lilly.
…..Just like New Jersey Big Pharma, New York’s two Big Pharma (Pfizer and Bristol Myers Squibb) also all have incredibly low state effective corporate income tax rates paid. Big Pharma's shifting of its income overseas has not just hurt the US Government financial coffers, but it also has severely damaged the financial status of US States.
.....I have a gut feeling that in all fairness, many US States should be getting a lot more in State Corporate Income Taxes from New York Big Corps, and frankly from Big Corps of other US States, as well. New York, with its many exceptionally bright, greedy, shady and reckless financial wizards, was a major cause of the country’s severe financial crisis. It only makes sense to me this same kind of financial recklessness also infiltrated the State Corporate Income Tax planning ranks, with the myriad of creative tax loopholes designed by some really bright financial minds. But this was all orchestrated to the severe detriment of both State Government financial coffers and State citizens, many of whom are financially desperate.
…..I think it is high time for New York Big Corps, and all Big Corps all throughout the country, to step up and help US States get out of their horrible financial messes. Big Corps, their stockholders, their bondholders, their Boards of Directors, their executives, and their employees are all getting so many advantages from critical services provided by State and Local Governments, and it is only right that these Big Corps pay a fair amount of State Corporate Income Taxes for these services.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by each of these 30 Big New York Corps for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current New York Corporate Income Tax Rate of 7.10% by the total Consolidated Pretax Income of each Big New York Corp for the last twelve years. Then, I subtracted the actual total State and Local Corporate Income Taxes Paid by each of these Corps for the same twelve years. I have excluded from the 7.10% NY Statutory Corporate Income Tax Rate, the NY City Corporate Income Tax Rate. If this NY City Corporate Income Tax Rates were included, the amounts of total New York Corporate Income Tax Loopholes Taken would be substantially higher than what is shown below. Many of these Big New York Corps are headquartered in New York City.
……………………….........................NY…..........State……....Resultant
………………….........…..............Corporate…...Effective.......Higher
………………….........…………..........Tax…….....Tax Rate…....State Tax
………………..........…………...........Rate……........Paid…...Last 12 Years
…………………………………………………....................(Millions of dollars)
..1. IBM………….......…………….....7.10%..........1.02%...........8,979
..2. Citigroup………….........………7.10%..........2.91%............5,864
..3. Pfizer……………...........……....7.10%..........1.76%............5,833
..4. Altria Group......……….........7.10%..........3.05%............5,796
..5. JP Morgan Chase…………......7.10%..........3.52%............4,366
..6. Verizon Communications…..7.10%..........4.01%...........4,129
..7. Goldman Sachs…….......……..7.10%..........2.82%...........3,880
..8. PepsiCo…………......………......7.10%..........1.36%...........3,668
..9. Bristol Myers Squibb………...7.10%..........0.81%...........3,049
10. American Express……………..7.10%..........2.18%...........2,231
11. Morgan Stanley……........…….7.10%..........3.91%...........2,159
12. Phillip Morris International.7.10%........(0.05)%..........2,008
13. MetLife………………………….....7.10%..........1.10%...........1,687
14. Hess…………………………….......7.10%........(0.57)%..........1,668
15. Colgate-Palmolive…………......7.10%.........1.14%............1,488
16. News Corp………….......………..7.10%.........2.53%............1,042
17. Time Warner........................7.10%..........4.40%..............761
18. Omnicom Group…......………..7.10%.........1.83%...............712
19. Consolidated Edison……….....7.10%.........1.81%...............705
20. Avon Products……………….....7.10%.........0.65%..............655
21. Loews…………......……………...7.10%..........4.48%..............498
22. Forest Labs………….....………..7.10%..........1.59%..............479
23. ITT……………………………........7.10%..........0.24%.............465
24. M&T Bank…………………….......7.10%.........1.95%..............461
25. Dover………………………….......7.10%..........1.42%.............369
26. Marsh & McLennan…………....7.10%.........4.50%.............363
27. Bank of New York Mellon…...7.10%.........5.48%.............348
28. Estee Lauder……………………..7.10%….......1.92%.............345
29. Pepsi Bottling…………………....7.10%..........1.97%.............341
30. Time Warner Cable...............7.10%.........4.21%.............305
Total all 30………………………………………64,654 (yeah, $64.7 bil)
For the most recent six years, the estimated total State Corporate Income Tax Loopholes Taken by these 30 New York Big Corps was $37.6 bil, as compared to $64.7 bil for the past twelve years.
I think it would be helpful to focus on the four huge New York financial corps severely impacted by the financial crisis, and specifically on the period of time before the financial meltdown in 2008. Thus, below here is some key information related to these four firms for the ten-year period from the beginning of 1998 to the end of 2007.
…………………………...............Consolidated…...Effective…..Estimated
…………….........State Corp..…....Pretax……....State Corp…..State Tax
……………….......Tax Paid……....Income……....Tax Rate…...Loophole
…………………………………………….......................Paid………...Taken
…………………………...........10 Years 1998-2007………………............
………………...........(Millions of dollars)……………...........(mils of $s)
Citigroup………...4,466…….....200,222……......2.23%..........9,750
AIG…………….........436*……....112,206…….....0.39%...........7,531
Merrill Lynch……..630…….......33,488……......1.88%...........1,748
Lehman Bros......1,283…….......31,210……......4.11%..............933
Totals………….....6,815….........377,126…….....1.81%..........19,961
*AIG includes both Current and Deferred State Corporate Income Tax combined
Just looking at the above list, I suggest that the rampant financial creativity here doesn’t just happen on a pretax basis. And in the Corporate Income Tax area, it just doesn't happen with Federal Income Taxes.
I think it makes more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by drastically increasing state university tuition.
Also, I think it makes sense to use some of the funds from the closing of these Big Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses. By far the most effective way to reduce a State’s deficit in the long run is to improve significantly State long-term real economic growth, along with the carefully crafted resultant substantial reduction in State unemployment and underemployment rates.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
Also, from a fairness standpoint, the above effective New York Corporate State Effective Income Tax Rates Paid by these 30 Big Corps are very low in comparison with New York State’s current individual income tax rates, which for income amounts above $20,000 and up to $200,000, is a substantially higher 6.85%, and then there’s New York City individual income tax, to boot. Granted the stated New York Corporate State Income Tax Rate is a much closer 7.10%, but the state corporate income tax rate actually paid by these Big New York Corps averaged only 2.13% in the most recent year. That substantial tax rate paid variance between New York Big Corps and New York individuals just doesn’t make any sense to me.
Update on California Big Corps Have Paid Modest Amounts of State Corporate Income Taxes
To be consistent with the way I will be presenting New York Big Corps a bit later, I am updating my earlier post on California Big Corps to include all California-based companies, 32 in total, where the State Corporate Income Tax Loopholes Taken was at least $300 mil each, at least the way I measure them, in the most recent dozen years.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 32 Big California Corps. These 32 Big California Corps below had a weighted average state corporate effective income tax rate paid for the past twelve years of a modest 2.61%, or a 70% discount to California’s current state corporate income tax rate of 8.84%.
….…………………….....Current…………………......State
….…………………….......State..Consolidated..Effective
….…………………….......Tax……….Pretax………...Tax
….…………………….......Paid……..Income……….Rate
….……………….…......(Millions of Dollars)
32. Google…………....1,685…….27,244……..6.18%
31. Charles Schwab….719……..12,329……..5.83%
30. Gilead Sciences….529……....9,385……..5.64%
29. PG&E………………...960…….17,050……..5.63%
28. Safeway……………..676……..12,545……..5.39%
27. Visa......................531.......10,120........5.25%
26. Golden West Fincl.596……..11,552……..5.16%
25. Ebay……………….....583…….11,369……..5.13%
24. GAP………………......701…….16,945……..4.14%
23. Sempra Energy…...484…….12,209……..3.96%
22. Disney………….....1,864……47,950……..3.89%
21. Clorox…………….....297………8,296……..3.58%
20. Cisco Systems…..2,582…....72,442…….3.56%
19. Oracle………........2,303…....65,612……..3.51%
18. Apple……….........1,784…….51,465……...3.47%
17. Qualcomm…….......776…....25,105……..3.09%
16. Countrywide Fincl..515…....18,595....….2.77%
15. Franklin Resources.390…...14,140……..2.76%
14. Wells Fargo……....2,461…..108,550……..2.27%
13. Maxim Intgrtd Prds114.........5,442.......2.09%
12. Amgen………...........728…….34,933……..2.08%
11. Intel…………….......1,981…..101,986……..1.94%
10. Linear Technology.104.........5,562.......1.87%
..9. Chevron…………...3,057…..211,552……..1.45%
..8. Oxy Petroleum….....731…….55,238……..1.32%
..7. Adobe Systems.........82……...6,741……..1.22%
..6. Applied Materials....151…….14,654……..1.03%
..5. Hewlett-Packard.....642…….66,446……..0.97%
..4. McKesson…………......83………9,448……..0.88%
..3. Mattel……..................52………6,529…….0.80%
..2. DIRECTV…………….....25………4,914……..0.51%
..1. Western Digital………....4………3,515……..0.11%
Total all 32………......28,190…1,079,863…….2.61%
For the most recent 2009 year, the weighted state corporate effective income tax rate paid by these Big California Corps was an even lower 2.13%.
The huge Northrop Grumman was not included above, even though it generated a massive $15.6 bil of pretax income in the past twelve years. Northrop Grumman did not disclose the amounts of state income tax it paid. It passes on these costs to the US Government in its federal contracts.
Edison Intl, Yahoo, Intuit, Symantec, and First American all generated Total Pretax Income above $5 bil in the past 12 years. They were not included in the above list of Big Corps since their Total State Corporate Income Tax Loopholes Taken were lower than $300 mil each.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by each of these 32 Big California Corps for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current California Corporate Income Tax Rate of 8.84% by the total Consolidated Pretax Income of each Big California Corp for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by each of these Corps for the same twelve years.
………………………..........................CA……......State…….Resultant
………………….........…..............Corporate…Effective.......Higher
………………….........…………..........Tax……..Tax Rate…...State Tax
………………..........…………............Rate……....Paid…....Last 12 Years
…………………………………………………....................(Millions of dollars)
..1. Chevron………….......………….8.84%.......1.45%........15,644
..2. Wells Fargo………….........……8.84%......2.27%.........7,135
..3. Intel……………...........……......8.84%......1.94%.........7,035
..4. Hewlett-Packard......………...8.84%.......0.97%.........5,232
..5. Oxy Petroleum……………......8.84%.......1.32%..........4,152
..6. Cisco Systems………..………...8.84%.......3.56%..........3,822
..7. Oracle……………….......……....8.84%.......3.51%..........3,497
..8. Apple………………......………...8.84%.......3.47%..........2,766
..9. Disney………………………….....8.84%.......3.89%..........2,375
10. Amgen…........…………………..8.84%.......2.08%..........2,360
11. Qualcomm…………........……..8.84%.......3.09%..........1,443
12. Applied Materials…....……….8.84%.......1.03%..........1,144
13. Countryside Financial……….8.84%.......2.77%..........1,129
14. Franklin Resources……………8.84%.......2.76%............860
15. GAP………….......…………….....8.84%.......4.14%............797
16. McKesson…………….......……..8.84%......0.88%............752
17. Google………………......………..8.84%.......6.18%............723
18. Sempra Energy…………….......8.84%......3.96%............595
19. PG&E…………………………….....8.84%.......5.63%............547
20. Mattel…………......……………...8.84%......0.80%............525
21. Adobe Systems………….....…..8.84%......1.22%............514
22. Clorox……………………………...8.84%.......3.58%...........436
23. Safeway…………………………....8.84%.......5.39%..........433
24. Golden West Financial……….8.84%.......5.16%...........425
25. Ebay………………………………...8.84%.......5.13%...........422
26. DIRECTV………………………....8.84%........0.51%..........409
27. Linear Technology..............8.84%........1.87%..........388
28. Charles Schwab…………………8.84%........5.83%..........371
29. Maxim Integrated Products.8.84%.......2.09%..........367
30. Visa.....................................8.84%........5.25%..........364
31. Western Digital………………….8.84%….....0.11%..........307
32. Gilead Sciences………………….8.84%........5.64%..........301
Total all 32………………………………………67,270 (yeah, $67.3 bil)
For the most recent six years, the estimated total State Corporate Income Tax Loopholes Taken was $50.9 bil, as compared to $67.3 bil for the past twelve years.
I think it makes more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by drastically increasing state university tuition.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
When you think about it, primarily California’s Silicon Valley, but also the greater LA area, have all of this incredible innovative expertise that is presently much more dormant than it should be. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit these two key areas of California to thrive. Clearly, smart tax incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, green energy and medical science.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
And since 40% of the graduate students in the country’s very best research universities are foreign students, then the last thing we should be doing is kicking these foreign students out of the country after they get their graduate degrees. They are needed here to grow the US economy. They are prime job creators.
Also, from a fairness standpoint, the above effective California Corporate State Effective Income Tax Rates Paid by these 32 Big Corps are so incredibly low in comparison with California’s current individual income tax rates, which for income amounts above $47,055 and up to $1 million, is a substantially higher 9.55%. Granted the stated California Corporate State Income Tax Rate is a much closer 8.84%, but the state corporate income tax rate actually paid by these Big California Corps averaged only 2.13% in the most recent year. That massive tax rate paid variance between California Big Corps and individuals just doesn’t make any sense to me.
Below here is the effective state corporate income tax rates paid, which are computed by dividing the current state corporate income tax paid by the consolidated pretax income, both in total for the past twelve years for each of these 32 Big California Corps. These 32 Big California Corps below had a weighted average state corporate effective income tax rate paid for the past twelve years of a modest 2.61%, or a 70% discount to California’s current state corporate income tax rate of 8.84%.
….…………………….....Current…………………......State
….…………………….......State..Consolidated..Effective
….…………………….......Tax……….Pretax………...Tax
….…………………….......Paid……..Income……….Rate
….……………….…......(Millions of Dollars)
32. Google…………....1,685…….27,244……..6.18%
31. Charles Schwab….719……..12,329……..5.83%
30. Gilead Sciences….529……....9,385……..5.64%
29. PG&E………………...960…….17,050……..5.63%
28. Safeway……………..676……..12,545……..5.39%
27. Visa......................531.......10,120........5.25%
26. Golden West Fincl.596……..11,552……..5.16%
25. Ebay……………….....583…….11,369……..5.13%
24. GAP………………......701…….16,945……..4.14%
23. Sempra Energy…...484…….12,209……..3.96%
22. Disney………….....1,864……47,950……..3.89%
21. Clorox…………….....297………8,296……..3.58%
20. Cisco Systems…..2,582…....72,442…….3.56%
19. Oracle………........2,303…....65,612……..3.51%
18. Apple……….........1,784…….51,465……...3.47%
17. Qualcomm…….......776…....25,105……..3.09%
16. Countrywide Fincl..515…....18,595....….2.77%
15. Franklin Resources.390…...14,140……..2.76%
14. Wells Fargo……....2,461…..108,550……..2.27%
13. Maxim Intgrtd Prds114.........5,442.......2.09%
12. Amgen………...........728…….34,933……..2.08%
11. Intel…………….......1,981…..101,986……..1.94%
10. Linear Technology.104.........5,562.......1.87%
..9. Chevron…………...3,057…..211,552……..1.45%
..8. Oxy Petroleum….....731…….55,238……..1.32%
..7. Adobe Systems.........82……...6,741……..1.22%
..6. Applied Materials....151…….14,654……..1.03%
..5. Hewlett-Packard.....642…….66,446……..0.97%
..4. McKesson…………......83………9,448……..0.88%
..3. Mattel……..................52………6,529…….0.80%
..2. DIRECTV…………….....25………4,914……..0.51%
..1. Western Digital………....4………3,515……..0.11%
Total all 32………......28,190…1,079,863…….2.61%
For the most recent 2009 year, the weighted state corporate effective income tax rate paid by these Big California Corps was an even lower 2.13%.
The huge Northrop Grumman was not included above, even though it generated a massive $15.6 bil of pretax income in the past twelve years. Northrop Grumman did not disclose the amounts of state income tax it paid. It passes on these costs to the US Government in its federal contracts.
Edison Intl, Yahoo, Intuit, Symantec, and First American all generated Total Pretax Income above $5 bil in the past 12 years. They were not included in the above list of Big Corps since their Total State Corporate Income Tax Loopholes Taken were lower than $300 mil each.
And then, below here is a summary of what I call a fair measure of the Total State Corporate Income Tax Loopholes Taken by each of these 32 Big California Corps for the past twelve years. In estimating what I think is a fair measurement of State Corporate Income Tax Loopholes Taken, for ease of computation, I started by multiplying the current California Corporate Income Tax Rate of 8.84% by the total Consolidated Pretax Income of each Big California Corp for the last twelve years. Then, I subtracted the actual total State Corporate Income Taxes Paid by each of these Corps for the same twelve years.
………………………..........................CA……......State…….Resultant
………………….........…..............Corporate…Effective.......Higher
………………….........…………..........Tax……..Tax Rate…...State Tax
………………..........…………............Rate……....Paid…....Last 12 Years
…………………………………………………....................(Millions of dollars)
..1. Chevron………….......………….8.84%.......1.45%........15,644
..2. Wells Fargo………….........……8.84%......2.27%.........7,135
..3. Intel……………...........……......8.84%......1.94%.........7,035
..4. Hewlett-Packard......………...8.84%.......0.97%.........5,232
..5. Oxy Petroleum……………......8.84%.......1.32%..........4,152
..6. Cisco Systems………..………...8.84%.......3.56%..........3,822
..7. Oracle……………….......……....8.84%.......3.51%..........3,497
..8. Apple………………......………...8.84%.......3.47%..........2,766
..9. Disney………………………….....8.84%.......3.89%..........2,375
10. Amgen…........…………………..8.84%.......2.08%..........2,360
11. Qualcomm…………........……..8.84%.......3.09%..........1,443
12. Applied Materials…....……….8.84%.......1.03%..........1,144
13. Countryside Financial……….8.84%.......2.77%..........1,129
14. Franklin Resources……………8.84%.......2.76%............860
15. GAP………….......…………….....8.84%.......4.14%............797
16. McKesson…………….......……..8.84%......0.88%............752
17. Google………………......………..8.84%.......6.18%............723
18. Sempra Energy…………….......8.84%......3.96%............595
19. PG&E…………………………….....8.84%.......5.63%............547
20. Mattel…………......……………...8.84%......0.80%............525
21. Adobe Systems………….....…..8.84%......1.22%............514
22. Clorox……………………………...8.84%.......3.58%...........436
23. Safeway…………………………....8.84%.......5.39%..........433
24. Golden West Financial……….8.84%.......5.16%...........425
25. Ebay………………………………...8.84%.......5.13%...........422
26. DIRECTV………………………....8.84%........0.51%..........409
27. Linear Technology..............8.84%........1.87%..........388
28. Charles Schwab…………………8.84%........5.83%..........371
29. Maxim Integrated Products.8.84%.......2.09%..........367
30. Visa.....................................8.84%........5.25%..........364
31. Western Digital………………….8.84%….....0.11%..........307
32. Gilead Sciences………………….8.84%........5.64%..........301
Total all 32………………………………………67,270 (yeah, $67.3 bil)
For the most recent six years, the estimated total State Corporate Income Tax Loopholes Taken was $50.9 bil, as compared to $67.3 bil for the past twelve years.
I think it makes more sense to balance a State’s severely stressed budget by closing some of the huge Big Corp State Corporate Income Tax Loopholes, rather than by either drastically reducing critical state services like education and citizen protection, or by drastically increasing state university tuition.
Also, I think it makes sense to use some of the funds from the closing of these larger Corp State Income Tax Loopholes to provide some wise, highly stimulative, directly-targeted, job-creating tax incentives to small and medium-sized businesses.
When you think about it, primarily California’s Silicon Valley, but also the greater LA area, have all of this incredible innovative expertise that is presently much more dormant than it should be. It needs to be unleashed in order to make the US more competitive on the world scene. And it also needs to be unleashed to bring the country out of its horrible jobless recovery. Principally the US government, but also the State Government, need to create the strong stimulative environment to permit these two key areas of California to thrive. Clearly, smart tax incentives are needed here, primarily targeted at research and technology, and particularly at computer software, computer infrastructure, green energy and medical science.
For maximum positive effect to the US economy and to US job creation, I think the US government should let businesses have a choice on the capital expenditures, including computer software investments, they make.....they could either take 100% first year expensing, or they could instead choose a refundable investment tax credit.
And since 40% of the graduate students in the country’s very best research universities are foreign students, then the last thing we should be doing is kicking these foreign students out of the country after they get their graduate degrees. They are needed here to grow the US economy. They are prime job creators.
Also, from a fairness standpoint, the above effective California Corporate State Effective Income Tax Rates Paid by these 32 Big Corps are so incredibly low in comparison with California’s current individual income tax rates, which for income amounts above $47,055 and up to $1 million, is a substantially higher 9.55%. Granted the stated California Corporate State Income Tax Rate is a much closer 8.84%, but the state corporate income tax rate actually paid by these Big California Corps averaged only 2.13% in the most recent year. That massive tax rate paid variance between California Big Corps and individuals just doesn’t make any sense to me.
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