In performing a quick review of SEC filings of large corps with an SEC State Location Code in New York, I found 37 New York Corps that had both Total Core Pretax Income above $5 bil, and also Total State Corporate Income Tax Loopholes Taken, at least the way I measure them, of at least $200 mil each, in the last dozen years.
My definition of Core Pretax Income here excludes very large Asset Impairment Charges, particularly from Goodwill Impairment, and also excludes very large Acquired In Process Research and Development Charges.
I excluded two very large companies from this list which Fortune Magazine says are headquartered in New York (Alcoa and Travelers), because their SEC State Location Codes were in Pennsylvania and Minnesota, respectively.
Health Insurance company Assurant generated Total Pretax Income in excess of $5 bil in the past 12 years. However, it was excluded from the below list of New York Big Corps because it didn't disclose its State Income Tax information for all 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 Core Pretax Income, both in total for the past twelve years for each of these 37 Big New York Corps. These 37 Big New York Corps below had a weighted average state and local corporate effective income tax rate paid of a very modest 2.47%, 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 Statutory Corporate Income Tax Rate. Many of these 37 huge New York Corps are headquartered in New York City.
….……………………..........................Current…………………..State&Loc
….……………………......................State&Loc.Consolidated..Effective
….……………………............................Tax……….Pretax………...Tax
….……………………............................Paid……..Income……….Rate
….……………….…............................(Millions of Dollars)
37. Bank of New York Mellon........1,183……..21,569……...5.48%
36. Viacom (2003-2009)……….......828……...15,544……...5.33%
35. Marsh & McLennan………..........628……....13,961……..4.50%
34. Time Warner (1999-2009).....1,237........28,134*.......4.40%
33. Time Warner Cable (2003-09)..445........10,558*.......4.21%
32. Verizon Communications......5,372…….133,814……...4.01%
31. Loews………………......................849.……..21,180*……..4.01%
30. Morgan Stanley…………..........2,652……..67,759……...3.91%
29. JP Morgan Chase………...........4,289…....121,908……..3.52%
28. L-3 Communications….............241………..7,400………3.26%
27. Altria Group……………............4,371…....143,203……..3.05%
26. Pepsi Bottling…………………........203……....7,055*…….2.88%
25. Goldman Sachs…………...........2,553……...90,605……..2.82%
24. Paychex………………………..........178…….....6,476………2.75%
23. Citigroup…............................4,081….....149,636*……2.73%
22. North Fork Banc(1998-2005)...122**….....5,104……..2.39%
21. American Express………….........990….......45,364……..2.18%
20. M&T Bank………........................175…….......8,962……..1.95%
19. Estee Lauder…….......................128…..........6,662……..1.92%
18. Omnicom Group…………….........248…........13,525....….1.83%
17. Consolidated Edison…………......242…........13,344……..1.81%
16. News Corp (2002-2009)...........577…….....31,894*……1.81%
15. Forest Labs……….......................138……........8,691…….1.59%
14. Pfizer……................................1,920…......123,204*…..1.56%
13. Cendant (1998-2005)……….......118……........8,110………1.45%
12. Dover……………............................92…….......6,493……..1.42%
11. PepsiCo…………..........................868……......63,882……..1.36%
10. XL Capital, Ltd***……………........67……........5,324*..….1.26%
..9. Colgate-Palmolive….................286**….....24,982……...1.14%
..8. MetLife....................................309……......28,117……...1.10%
..7. IBM.......................................1,510……....147,733…….1.02%
..6. Bristol Myers Squibb................392**..…....51,633*..…0.76%
..5. Avon Products…………................66…….......10,150…….0.65%
..4. ITT……........................................16……….....6,779……..0.24%
..3. Bunge, Ltd**** (2001-2009)….....0……….....6,252……..0.00%
..2. Phillip Morris Intl (2007-09)....(15)…….....28,064…….(0.05)%
..1. Hess……….................................(123)……....22,786*…..(0.54)%
Total all 37……….........................37,236…..1,505,857……..2.47%
* Excludes large Asset Impairment Charges, particularly Goodwill Impairment Charges, and/or Acquired In Process Research and Development Charges
** Includes both State Corporate Income Tax Paid amounts and Deferred Income Tax Expense; these companies decided to not disclose the amount of their State Income Tax Paid, which should be markedly lower than the above combined amounts shown.
*** XL Capital, Ltd is presently an Ireland Corp; previously a Cayman Islands Corp; its CPA firm was based in New York City
**** Bunge, Ltd is presently a Bermuda Corp, but with an SEC Location Code in NY. It had no State Income Tax disclosure, thus I assumed none was paid
For the most recent 2009 year, the weighted average state and local corporate effective income tax rate paid by these Big New York Corps was an even lower 2.12%.
Eight additional 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 eight Corps were excluded because their Total State Corporate Income Tax Loopholes Taken were less than $200 mil each. These eight Corps were CBS, Bear Stearns, McGraw-Hill, Moody's, Coach, KeySpan, BlackRock, and Eastman Kodak.
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 37 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 Statutory 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 Statutory 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&Loc……Resultant
………………….........….............Corporate…...Effective.......Higher
………………….........…………..........Tax……....Tax Rate..State&Loc Tax
………………..........…………...........Rate……........Paid…...Last 12 Years
………………………………………………….................................(mils of $s)
..1. IBM………….......…………….....7.10%..........1.02%............8,979
..2. Pfizer……………...........……....7.10%..........1.56%............6,827
..3. Citigroup………….........………7.10%..........2.73%............6,543
..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%..........0.76%...........3,274
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. Hess…………………………….......7.10%........(0.54)%..........1,741
14. News Corp………….......………..7.10%.........1.81%............1,687
15. MetLife………………………….....7.10%..........1.10%...........1,687
16. Colgate-Palmolive…………......7.10%.........1.14%............1,488
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. Loews…………......……………...7.10%..........4.01%..............655
21. Avon Products……………….....7.10%.........0.65%..............655
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. Cendant…………………………….7.10%..........1.45%..............458
26. Bunge, Ltd………………………...7.10%.........0.00%..............444
27. Dover………………………….......7.10%..........1.42%..............369
28. Marsh & McLennan…………....7.10%.........4.50%..............363
29. Bank of New York Mellon…...7.10%..........5.48%..............348
30. Estee Lauder……………………..7.10%….......1.92%...............345
31. XL Capital, Ltd…………………..7.10%...........1.26%...............311
32. Time Warner Cable...............7.10%..........4.21%...............305
33. Pepsi Bottling…………………....7.10%..........2.88%...............298
34. L-3 Communications………….7.10%..........3.26%...............284
35. Paychex………………………......7.10%..........2.75%...............282
36. Viacom……………………….......7.10%..........5.33%................276
37. North Fork Bancorp…………..7.10%..........2.39%...............240
Total all 37………………………………………69,680 (yeah, $69.7 bil)
For the most recent six years, the estimated total State Corporate Income Tax Loopholes Taken by these 37 New York Big Corps was $41.2 bil, as compared to $69.7 bil for the past twelve years.
And then here’s an updated list of the 45 New York Big Corps with Total Core Pretax Income of more than $5 bil for the most recent 12 years. This list is sorted by Pretax Income.
….…………………….................Current……....Core…......State&Loc
….……………………...............State&Loc..Consolidated..Effective
….……………………...................Tax………....Pretax……..Tax Rate
….……………………...................Paid…….....Income……….Paid
….……………….….....................(millions of dollars)
Citigroup.............................4,081..........149,636.......2.73%
IBM.....................................1,510..........147,733.......1.02%
Altria Group........................4,371..........143,203.......3.05%
Verizon Communications....5,372..........133,814.......4.01%
Pfizer...................................1,920..........123,204.......1.56%
JP Morgan Chase.................4,289...........121,908.......3.52%
Goldman Sachs....................2,553............90,605.......2.82%
Morgan Stanley...................2,652............67,759.......3.91%
PepsiCo..................................868............63,882.......1.36%
Bristol Myers Squibb..............392............51,633.......0.76%
American Express..................990............45,364.......2.18%
News Corp(2002-2009)..........577...........31,894.......1.81%
Time Warner(1999-2009).....1,237...........28,134.......4.40%
MetLife...................................309............28,117.......1.10%
Phillip Morris Intl(2007-09)..(15)............28,064......(0.05)%
Colgate-Palmolive...................286............24,982.......1.14%
Hess......................................(123)............22,786......(0.54)%
Bank of New York Mellon......1,183............21,569.......5.48%
Loews......................................849............21,180.......4.01%
CBS........................................1,299...........19,295........6.73%
Viacom(2003-2009)................828...........15,544.......5.33%
Bear Stearns(1998-2007).......1,184...........14,885.......7.95%
Marsh & McLennan...................628...........13,961.......4.50%
Omnicom Group.......................248...........13,525.......1.83%
Consolidated Edison.................242...........13,344.......1.81%
McGraw-Hill.............................819...........12,712.......6.44%
Time Warner Cable(2003-09)..445...........10,558.......4.21%
Avon Products...........................66...........10,150.......0.65%
M&T Bank..................................175...........8,962.......1.95%
Forest Labs...............................138............8,691........1.59%
Cendant(1998-2005). ...............118............8,110.......1.45%
Moodys(1999-2009).................741............7,821.......9.47%
L-3 Communications.................241............7,400.......3.26%
Pepsi Bottling............................203............7,055.......2.88%
ITT..............................................16............6,779.......0.24%
Estee Lauder..............................128............6,662.......1.92%
Coach........................................393............6,657.......5.90%
Dover...........................................92...........6,493.......1.42%
Paychex.....................................178...........6,476.......2.75%
Bunge, Ltd(2001-2009).................0............6,252......0.00%
KeySpan......................................246..........5,636.......4.36%
XL Capital, Ltd..............................67...........5,324......1.26%
BlackRock(2004-2009)..............183...........5,212.......3.51%
North Fork Banc(1998-2005).....122...........5,104.......2.39%
Eastman Kodak...........................190...........5,074......3.74%
NY Total for all 45 Corps.....42,291.....1,583,149......2.67%
And below here is a listing of the 15 New York Mid-sized Corps with Total Core Pretax Income for the most recent 6 years of at least $2 bil each, but which had Total Core Pretax Income for the most recent 12 years of less than $5 bil, and thus weren’t included in the above list of the 45 most profitable, Very Big New York Corps.
..........................................Most Recent Six Years
.........................................State&Local....(PTI).........Effective
..........................................Corporate.......Core......State&Local
...........................................Income.........Pretax......Tax Rate
....Corporations..................Tax Paid.......Income........Paid
.............................................(Millions of Dollars)
Corning...................................(13)..........8,423.........(0.15)%
AOL Inc(2006-2009)..............273..........4,542.........6.01%
Mastercard...............................93...........4,531.........2.05%
Arch Capital Group, Ltd*............5...........3,445.........0.15%
Polo Ralph Lauren..................138...........3,365.........4.10%
CA............................................62...........3,324.........1.87%
Tiffany....................................130...........2,579.........5.04%
NYSE Euronext........................52...........2,504.........2.08%
Starwood Hotels & Resorts.....102...........2,477.........4.12%
Arrow Electronics....................49...........2,412.........2.03%
New York Community Bancorp.39..........2,375.........1.64%
Assurant(2004-2006)................0..........2,288.........0.00%
Constellation Brands...............131...........2,267.........5.78%
National Fuel Gas.....................85...........2,085.........4.08%
NASDAQ OMX Group..............126...........2,020.........6.24%
NY Total for all 15 Corps....1,272........48,637.........2.62%
* Arch Capital Group, Ltd is a Bermuda Corp, but with a New York City external CPA firm.
Now let me take it to the next level of Mid-sized New York publicly-held Corps. Below are the 7 New York Corps with Total Core Pretax Income for the most recent 6 years of between $1.5 and $2.0 bil, and which were not already included in the above 45 most profitable, Very Big New York Corps.
...........................................................................................Core
..........................................................................................Pretax
New York Corp(Industry)..........................Headquarters..Income
.....................................................................................(mils of $s)
Transatlantic Holdings(Fire&Casualty Insurance)………..NY..1,965
Henry Schein(Wholesaler Medical Equip&Supplies).Melville..1,951
Broadridge Financial Solutions(Finance).........Lake Success..1,906
Weight Watchers Intl(Personal Services)………………….....NY..1,850
Intl Flavors&Fragrances(Industrial Organic Chemicals).NY..1,732
Jones Group(Women’s Apparel)…………………………........NY..1,601*
Pall Corp(Industrial Machinery&Equipment)………East Hills..1,566
* Excludes Large Asset Impairments
When you review the above three lists of the 67 Big and Mid-sized New York Corps, with only a couple of exceptions, you have to be very impressed with the quality and fine financial performance.
But this strong financial performance is but a drop in the bucket in comparison to what has been going on with US Big Oil and Gas Corps. There has been a massive income shift in the past decade from non-Big Oil and Gas Corps to Big Oil and Gas Corps, which has been devastating to all non-Big Oil and Gas businesses.
To illustrate how this massive income shift in the past decade has applied to New York, there were 33 Very Profitable New York non-Big Oil and Gas Big Corps, from the above list of 45, which were in existence for the entire past 12 years. The Total Core Pretax Income for these 33 New York non-Big Oil and Gas Big Corps of $175.9 bil for the most recent two years was down 10% from the $194.5 bil earned a decade earlier.
On the other hand, the 35 US Oil and Gas Big Corps, 25 of which are based in Texas, generated Core Pretax Earnings of $373.7 bil for the most recent two years, which was an incredible 712% increase from the $46.0 bil earned a decade earlier. I'm not kidding!
Clearly, it would be wise for the US government to take action that would reverse this horrible income shift trend, which has severely damaged not just more than 95% of US businesses, but has also devastated US individuals, and all of federal, state and local governments. Not only has it resulted in much higher US unemployment, much higher US underemployment, and lower median US wages, but it also has resulted in a substantially higher portion of a family's take-home pay being used to pay for energy costs than that of a decade ago.
I think it only makes sense for the US government to eliminate the many massive tax loopholes that are granted to Big Oil and Gas Corps to reward them for generating these windfall profits. And the money raised here should be given as wise, lucrative tax incentives to all US businesses that effectively reduce their energy costs.
Such a tax plan, is a ten-fer:
.....higher US real GDP growth
.....lower US unemployment
.....lower US underemployment
.....higher US median wages
.....lower portion of take-home pay needed to fund energy costs
.....higher after-tax corporate profits for more than 95% of US businesses
.....significant reduction in the US deficit
.....better State government coffers
.....more competitive US firms
.....and a huge step toward US becoming energy independent
Now on to updating first New Jersey, and then later some other US States in the Eastern Half of the US.
