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.
