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.
