For the 10 US Big Conglomerate Corps as I define them, 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 a very modest 6.4%. And for the most recent year 2010, this effective tax rate was an even lower 3.1%.
Here are these 10 Big US Conglomerate Corps applicable amounts for 2010:
.................................Current US...........................Effective
.................................Fed Inc Tax..Consolidated...Tax Rate
................................Paid(Benefit).........PTI.......Paid(Benefit)
.....................................2010..............2010............2010
........................................(million of $s).....
Big US Conglomerates
GE...............................(3,253)..........14,208..........(22.9)%
Honeywell......................(471)............2,843..........(16.6)%
United Technologies........122.............6,538.............1.9%
Tyco Intl...........................45.............1,270.............3.5%
Loews..............................154.............2,902.............5.3%
Johnson Controls.............112.............1,763.............6.4%
3M...................................837............5,755............14.5%
Danaher...........................388.............2,342............16.6%
ITT...................................152................818............18.6%
Berkshire Hathaway(1)..3,668...........19,051............19.3%
Total of all 10................1,754..........57,490.............3.1%
(1) Berkshire Hathaway above US Federal Income Tax includes Current US Federal, US State and Foreign Income Tax Expense amounts.
My proposal here is that all US Big Conglomerate 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 Conglomerate Corps, and use a 10% average annual profit growth and 10% annual Federal Income Tax Paid growth from 2011 to 2021, I get additional US Federal Income Tax Receipts over the 10 years from 2012 to 2021 of $131.3 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 $163.0 bil over the 10 years from 2012 to 2021.
Perhaps the best way to go on a minimum tax on US Big Conglomerate 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.
I think it would be wise to take a closer historical look at GE Consolidated to see if we can get a better clue on just why the country is in such horrible economic straits presently.
From their audited financial statements and related income tax footnotes filed with the SEC, here's GE Consolidated Pretax Income and US Federal Income Taxes Paid or (Tax Benefits Received) during the 8 Clinton Presidential Years from 1993 to 2000, and then during the 10 subsequent years from 2001 to 2010, with the bulk of these later years being the 8 Bush/Cheney Presidential Years from 2001 to 2008:
..............................................................US Federal........Effective
....................................Consolidated....Income Tax.....US Fed Inc
...................................Pretax Income..Paid(Benefit).Tax Rate Paid
..........................................(in millions of dollars)
Clinton Presidential Years
1993.................................6,136................1,126
1994.................................8,661................1,299
1995.................................9,737...............1,409
1996...............................10,806..................971
1997...............................11,179................1,176
1998...............................13,477................1,459
1999...............................15,577................1,632
2000..............................18,446................3,005...........16.3%
Total Clinton 8 Yrs......94,019..............12,077...........12.8%
Subsequent 10 Years
2001.............................19,701.................2,514
2002.............................18,891....................137
2003.............................19,904.................1,555
2004.............................20,106.................1,839
2005.............................21,178.................2,755...........13.0%
2006.............................23,330....................514............2.2%
2007.............................26,598......................87............0.3%
2008.............................19,770..................(651)..........(3.3)%
2009...............................9,995..................(833)..........(8.3)%
2010.............................14,208................(3,253)........(22.9)%
Total 10 Yrs 2001-10..193,681.................4,664............2.4%
Yeah, that's right, during the 8 years of the Clinton Presidency, GE Consolidated generated Total Consolidated Pretax Income of $94.0 bil, and paid what seemed like a pretty fair amount of Total US Federal Income Tax of $12.1 bil, which resulted in an effective tax rate paid of 12.8%.
And what has happened in the 10 years since then?.....8 of which were the Bush/Cheney Presidential years, and also most of which had the US House Ways and Means Committee and the US Senate Finance Committee both in Republican control.
Well, in these 10 years from 2000 to 2010, GE Consolidated generated Total Consolidated Pretax Income of $193.7 bil, and paid Total US Federal Income Tax of only $4.7 bil, or an incredibly low effective tax rate paid of 2.4%.
Do you really think that GE wants a Democratic President in 2012? And do you really think that GE wants a US House Ways and Means and US Senate Finance Committee under Democratic control in 2012? GE's CEO works for his stockholders, not for the Obama Administration.
I have a hunch that GE, just like nearly all of the US Big Corps that have paid so very little in US Federal Income Taxes under Bush/Cheney and under Republican House and Republican Senate control, will do everything in their power to prevent the Obama Administration, and the Democrats in both the US Senate and in the US House, from being successful in their clearly laser-like focus on substantial US job creation in both the short run and in the long run.
And the CEO of GE is now in charge of US Jobs? What motivation does he have to be successful here in creating US jobs? I suggest he has absolutely none.
When you think about it, with the incredible tax benefits that GE Consolidated has received over the past 10 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.
