For the 51 US Big Financial Corps with Total Pretax Income above $1.5 bil each for the most recent three years, I was really unpleasantly surprised to discover that the total effective US Federal Income Tax Rate Paid for the most recent year 2010 was a meager 6.3%.
Even more surprising was how many of these Big Financial Corps had negative Effective US Federal Income Tax Rates Paid in 2010.....an amazingly high 12 of them. Here are all 23 of them that had an effective US Federal Income Tax Rate Paid below 10% in 2010:
...............................Current US.............................Effective
...............................Fed Inc Tax....Consolidated...Tax Rate
..............................Paid(Benefit)...........PTI.......Paid(Benefit)
...................................2010...............2010............2010
......................................(million of $s).....
Big Financial Corps
GE Capital Services....(3,991)..............2,172........(183.7)%
State Street..................(885)..............2,086.........(42.4)%
Reinsusrance Group.....(218).................864.........(25.2)%
Lincoln National..........(244)...............1,234.........(19.8)%
Bank NY Mellon...........(670)..............3,694.........(18.1)%
Prudential Financial.....(722)..............4,422.........(16.3)%
Ameriprise Financial....(224)..............1,594.........(14.1)%
Marsh & McLennan........(90).................769.........(11.7)%
Bank of America(1).......(666)............11,077..........(6.0)%
PNC Financial..............(207)..............4,061..........(5.1)%
Capital One Financial....(152)..............4,330..........(3.5)%
Toyota Motor Credit......(26)..............3,003..........(0.9)%
AON.................................16...............1,059...........1.5%
NYSE Euronext................18..................686...........2.6%
Morgan Stanley..............213..............6,202...........3.4%
MetLife...........................141..............3,958...........3.6%
Invesco Ltd......................45.................834...........5.4%
Interactive Brokers..........21..................341...........6.2%
Wells Fargo.................1,425.............19,001...........7.5%
Principal Financial...........74..................841...........8.8%
American Express..........532...............5,964...........8.9%
Western Union...............104................1,145...........9.1%
AFLAC...........................349................3,585...........9.7%
Total of all 23............(5,157).............82,922..........(6.2)%
(1) Bank of America 2010 PTI excludes huge Goodwill Impairment Charge.
My proposal here is that all US Big Financial 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 Financial Corps, and use a 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 an incredibly high $259.4 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 $345.0 bil over the 10 years from 2012 to 2021.
Perhaps the best way to go on a minimum tax on US Big Financial 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.
From their audited financial statements and related income tax footnotes filed with the SEC, here's GE Capital Services Consolidated Pretax Income and US Federal Income Taxes Paid or (Benefits) during the 8 Bush/Cheney Presidential Years from 2001 to 2008:
..........................................................US Federal
...............................Consolidated......Income Tax
..............................Pretax Income....Paid(Benefit)
.....................................(in millions of dollars)
2008............................5,618...............(2,689)
2007..........................13,764.................(579)
2006..........................11,653..................(239)
2005..........................10,150.................1,148
2004............................9,701...................893
2003............................9,212....................(56)
2002............................4,547...............(1,881)
2001............................6,966..................(125)
Total for all 8 Years.....71,611..............(3,528)
Yeah, that's right, during the 8 years of the Bush/Cheney Presidency, GE Capital Services generated Total Consolidated Pretax Income of $71.6 bil, and didn't pay a dime in total of US Federal Income Tax, and instead got Total US Federal Income Tax Benefits of $3.5 bil!
And the CEO of GE is now in charge of US Jobs? And I'm sure he's licking his chops over potential foreign earnings repatriation.
When you think about it, with the incredible tax benefits that GE Capital Services has received over so many years, while so many of the country's citizens and its small businesses have been suffering so severely, US citizens have to be outraged, particularly at the US House Ways and Means Committee, and to a somewhat lesser extent, at the US Senate Finance Committee, for permitting this to happen. With the US economy in such shambles for everyone other than US Big Corps, I think it is in the country's best interests that anyone presently on the US House Ways and Means Committee, who continues to shirk his critical responsibility, should be moved to a less critical US House Committee, and replaced by someone who wants to move both the US economy and US job creation forward.
