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.
