For the 40 Big Health Care companies with Total Pretax Income above $1.5 bil each for the most recent three years, the total effective US Federal Income Tax Rate Paid was 16.4%.
But you have to look at the individual companies to see what is actually going on here.
Of these 40 Big Health Care companies, the total effective US Federal Income Tax Rate Paid by just the 9 Big Pharma Corps and 3 of the Big Medical Corps was a meager 7.1%. And this 7.1% effective tax rate is overstated because some of these large Corps combined their US Federal Income Tax Paid and State Income Tax Paid together, and one even also combined its Possession Income Tax Paid with the other two US income taxes.
And for the most recent year, the effective US Federal Income Tax Rate Paid was an even lower 5.1%, and that was so even though Abbott Labs reported an unusually large US Income Tax Paid in the most recent year in comparison with its earlier two years.
I bet company employees all over the US would love to go to their Company Human Resources Departments and ask if they can fill out the forms necessary so that they would be able to be income taxed like a US Big Pharma Corp.
Here are these individual US Big Pharma and Big Medical Corps' Current Federal Income Tax Paid or Payable in the most recent three years, their Consolidated Pretax Income(PTI), and their related effective US Federal Income Tax Rate Paid.
.........................................Most Recent Three Years.............
....................................Current US........................Effective
......................................Fed Inc....Consolidated...Tax Rate
.....................................Tax Paid...........PTI.............Paid
............................................(million of $s).....
Big Pharma and Big Medical
JNJ(1)............................6,807...........49,631..........13.7%
Merck(2).........................1,398..........30,637...........4.6%
Pfizer(3)........................(2,067).........19,116.........-10.8%
Eli Lilly(4)..........................214..........15,410............1.4%
Bristol Myers Squibb(5)..1,489..........16,449............9.1%
Abbott Labs(6)...............1,774..........18,763...........9.5%
Amgen............................1,827..........15,536..........11.8%
Medtronic(7)..................1,170..........10,132..........11.5%
Baxter................................140............7,086...........2.0%
Forest Labs........................539............3,260..........16.5%
Boston Scientific(8)...........(146)...........2,050..........-7.1%
Wyeth(9)...........................707............6,338..........11.2%
Schering-Plough(10)............23............2,049...........1.1%
Total of all 12.................13,875........196,457..........7.1%
(1) JNJ above US Federal Income Tax Paid also includes US State Income Tax Paid.
(2) Merck PTI excludes Amortization of Purchase Price Adjustments, In Process R&D Charges, and huge Gain of Merck/Schering-Plough Partnership Transaction.
(3) Pfizer's above numbers exclude 2009 results, since there was a huge foreign earnings repatriation transaction directly related to Pfizer's acquisition of Wyeth, where the salient related amounts weren't disclosed.
(4) Eli Lilly PTI excludes large In Process R&D Charge.
(5) Bristol Myers Squibb above US Federal Income Tax Paid also includes US State Income Tax Paid.
(6) Abbott Labs above US Federal Income Tax Paid also includes US State Income Tax Paid, as well as Possessions Income Tax Paid.
(7) Medtronic above US Federal Income Tax Paid also includes US State Income Tax Paid.
(8) Boston Scientific PTI excludes Goodwill Impairment Charges and large Litigation Charge.
(9) Wyeth above numbers are just for 2008 since it was subsequently acquired by Pfizer.
(10) Schering-Plough above numbers are just for 2008 since it was subsequently acquired by Merck.
My proposal here is that all US Big Health Care Corps should pay in US Federal Income Tax each year at least an amount equal to 10% of their Worldwide Pretax Income. That's not too much to ask, particularly in these horrible economic times, not just for US citizens and small businesses, but also for the US Debt Status.
When I run the detailed numbers on these Big Pharma and Big Medical Corps, and use a conservative 10% average annual profit growth and 10% annual Federal Income Tax Paid growth from 2010 to 2021, I get additional US Federal Income Tax Receipts over the 10 years from 2012 to 2021 of $95.2 bil.
And if I use a 15% minimum Federal Income Tax Rate, rather than a 10% minimum tax rate, I get positive CBO scoring of $142.1 bil over the 10 years from 2012 to 2021.
Perhaps the best way to go on a minimum tax on US Big Health Care Corps would be to apply a 10% minimum US Federal Income Tax on the first $10 bil of annual Worldwide Pretax Income, then a 15% minimum tax on any annual Worldwide Pretax Income in excess of $10 bil and up to $20 bil, and then a 20% minimum tax on any annual Worldwide Pretax Income in excess of $20 bil.
All of the tax receipts here should be used to reduce the US Debt.
