In my most recent post, I summarized key financial information related to the 24 largest US Corps, with Worldwide Pretax Income exceeding $10 bil each in the most recent year.
In this post, I will summarize similar key financial information related to the 30 second largest US Corps, with Worldwide Pretax Income between $5 bil and $10 bil each in the most recent year.
Here is the detailed information for these 30 second most profitable US Corps:
............................................................US........Effective
.........................................................Current........US
.........................................................Federal.... Federal
........................................................Income......Income
.........................................World.........Tax...........Tax
..........................................Wide.........Paid..........Rate
...........................................PTI........(Benefit)......Paid
........................................(mils of dollars)
Multinational Corps
Pfizer..............................9,422......(2,794)......(29.7)%
Coca Cola(1).....................9,265........... 470...........5.1%
Freeport-McMoran......8,512...........207...........2.4%
PepsiCo............................8,232............932.........11.3%
Cisco Systems..................7,825............914.........11.7%
Occidental Petroleum......7,359............614...........8.3%
Ford................................7,149............(69).........(1.0)%
McDonalds......................7,000.........1,127.........16.1%
United Technologies..6,538...........122...........1.9%
Eli Lilly.........................6,525...........376..........5.8%
Morgan Stanley...........6,202...........213...........3.4%
Bristol Myers Squibb.......6,071............797.........13.1%
3M..................................5,755............837.........14.5%
GM..................................5,737............(10)........(0.2)%
Abbott Labs(2)................5,713..........1,462.........25.6%
Amgen.............................5,317............636.........12.0%
Apache..........................5,206.............25...........0.5%
Schlumberger..............5,156..............76...........1.5%
Marathon Oil................5,122............183...........3.6%
Merck(3)..........................5,044............399...........7.9%
Total 20 Multinationals.133,150........6,517...........4.9%
Predominantly Domestic Corps
KKR LP (4).....................7,852..............51...........0.6%
United Health Group........7,383.........2,524.........34.2%
Disney.............................6,627..........1,530.........23.1%
Comcast..........................6,104..........1,502.........24.6%
American Express.....5,964.............532...........8.9%
Altria Group....................5,723..........1,430.........25.0%
CVS Caremark..................5,629..........1,894.........33.6%
United Parcel Service......5,523.............776.........14.1%
Home Depot....................5,273..........1,478.........28.0%
Dominion Resources.......5,037.............891.........17.7%
Total 10 Domestic Corps.61,115........12,608.........20.6%
Total all 30...................194,265........19,125...........9.8%
(1) Coca Cola PTI excludes fair value gain from remeasuring its Equity Investments.
(2) Abbott Labs US Federal Income Tax also includes US State and Possessions Income Tax.
(3) Merck PTI excludes In Process R&D Charge and Vioxx Liability Reserve Charge.
(4) KKR is a Partnership.
Clearly, there is something seriously wrong with US Tax Policy when the above 20 US Multinational Corps in total are paying an effective US Federal Income Tax Rate of only 4.9% in the most recent year. And this extremely low effective tax rate has been like this for the past decade. Principally, the US House Ways and Means Committee, but also the US Senate Finance Committee, have both really dropped the ball here.
And this 4.9% effective tax rate is overstated, since Abbott Labs above US Federal Income Tax also includes US State and Possessions Income Tax Paid. Further, Abbott Labs number also is unusually high in comparison with its previous years, probably because it is including something else in its current year amount, perhaps even the amount to cover future US income tax audits.
By far the best way to reduce the horrible unemployment and underemployment situation in the US is to simply close many of the massive tax loopholes of major US Corps, mostly the US Multinational ones, and use the proceeds to permanently and substantially reduce the US federal income tax rates paid by US small and medium-sized businesses.
The reason this wise action has not been done is that the Congressional Republicans are much more concerned about their large Corp constituencies, than they are about either their US small business or US citizen constituencies.
Below here shows the Income Tax paid by the 20 large US Multinational Corps to the US Government and to Foreign Governments in the most recent year.
...................................US...........................Foreign
.................................Current......Foreign...Current
...................................Fed..........Current.......Inc
...................................Inc.............Inc...........Tax
...................................Tax............Tax.........Paid
.................................Paid............Paid......(Benefit)
...............................(Benefit).....(Benefit).....Mix
.................................(mils of dollars)
Pfizer......................(2,794).........2,258........421%
Ford............................(69)............289........131%
GM..............................(10)............441........102%
Apache.........................25...........1,193.........98%
Marathon Oil...............183..........2,937.........94%
Freeport-McMoran.....207..........2,500.........92%
Schlumberger...............76..............909.........92%
United Technologies....122...........1,164.........91%
Morgan Stanley............213.............850.........80%
Merck..........................399...........1,446.........78%
Occidental Petroleum..614...........1,896.........76%
Coca Cola....................470...........1,212.........72%
Eli Lilly.......................376..............514..........58%
3M..............................837.............796..........49%
PepsiCo.......................932.............728..........44%
McDonalds...............1,127.............842..........43%
Cisco Systems.............914.............529..........37%
Abbott Labs.............1,462.............835..........36%
Bristol Myers Squibb..797.............339..........30%
Amgen........................636.............153..........19%
Total all 20...............6,517........21,831.........77%
I was really surprised to find in my most recent post that the 19 largest US Multinational Corps are paying in total 70% of their total income taxes to Foreign Governments.
But these 20 second largest US Multinational Corps are paying even more.....77%.....of their total income taxes to Foreign Governments.
And what in the world is going on with these above Big Oil Corps, paying almost nothing in income taxes to the US Government, but paying massive amounts of income taxes to Foreign Governments, as follows: Apache 98%, Marathon Oil 94%, Schlumberger 92%, and Occidental Petroleum 76%. And this was even a bit more than the nosebleed percentages paid to Foreign Governments by the Big 3 Oil Corps I disclosed in my most recent post: Exxon Mobil 94%, Chevron 87%, and ConocoPhillips 85%.
Clearly the US Big Oil Tax Loopholes must be closed. This is a clear injustice.....so many US citizens and US small businesses suffering so much, while US Big Oil continues to flourish, and live the good life, totally ignoring the very unfortunate situation of its fellow US citizens.
Yeah, these US Multinational Corps are doing much more to help balance the finances of Foreign Governments than they are of helping the severely depressed US Government finances, where their HQs are housed and where they are receiving so many benefits, including some very expensive ones like national security, infrastructure, and social security and medicare for their retirees.
Focusing now on which of these large US Multinational Corps are taking the most advantage of tax loopholes, which permits them to pay so little in US Federal Income Taxes, below are the 12 of them, whose US Federal Income Tax Paid Mix (i.e. US as a % of Worldwide) is substantially lower than their US Pretax Income Mix:
...................................US................................US
.................................Current..........................Tax
...................................Fed.............................Paid
...................................Inc............US...............vs
...................................Tax............PTI..........Income
...................................Mix...........Mix..........Spread
Pfizer.........................(521)%......(26)%........(495)%
Ford............................(31)%........61%..........(92)%
GM...............................(2)%.........46%..........(48)%
Morgan Stanley............20%.........57%..........(37)%
United Technologies.......9%.........41%...........(31)%
American Express.........51%.........82%..........(31)%
Apache...........................2%.........26%...........(23)%
Occidental Petroleum...24%.........44%...........(20)%
Freeport-McMoran........8%.........15%.............(8)%
Marathon Oil..................6%.........11%.............(5)%
Schlumberger.................8%.........12%.............(5)%
Eli Lilly (A)...................42%.........45%.............(3)%
Yeah, 4 of the above 12 are Big Oil Corps.
And below here are the 19 second largest US Multinational Corps which disclosed financial information needed for me to compute both the US Pretax Income Mix as well as the US Revenue Mix.
..................................................................US
...............................................................Income
....................................US...........US...........vs
...................................PTI...........Rev.........Rev
...................................Mix...........Mix......Spread
Marathon Oil................11%..........89%.......(78)%
Pfizer.........................(26)%..........43%.......(69)%
Abbott Labs.................(5)%..........43%.......(48)%
Amgen.........................42%..........77%.......(36)%
Cisco Systems..............16%..........50%.......(34)%
Occidental Petroleum..44%..........64%.......(20)%
United Technologies....41%..........53%.......(13)%
Freeport-McMoran......15%..........28%.......(13)%
Schlumberger...............12%..........24%.......(11)%
Morgan Stanley.............57%.........69%.......(11)%
Eli Lilly (A)...................45%..........56%.......(11)%
Apache.........................26%..........35%.......(10)%
GM...............................46%..........54%........(7)%
Coca Cola......................24%..........30%........(6)%
PepsiCo........................49%...........53%........(4)%
Bristol Myers Squibb.....63%..........65%........(2)%
McDonalds....................39%..........34%.........6%
Ford..............................61%..........49%........12%
3M................................48%..........35%........14%
Yeah, there are 5 Big Pharma Corps, with their income shifting to low foreign tax havens, including to Puerto Rico, in the above list. Also, there are 4 Big Oil Corps shifting income out of the US in the above list.
And below here are the 18 second largest US Multinational Corps which disclosed financial information needed for me to compute both the US Pretax Income Mix as well as the US Asset Mix.
..................................................................US
...............................................................Income
....................................US...........US...........vs
...................................PTI.........Asset.......Asset
...................................Mix..........Mix.......Spread
Pfizer........................(26)%.........57%........(83)%
Cisco Systems..............16%.........84%........(68)%
Abbott Labs................(5)%........45%........(50)%
Marathon Oil...............11%.........55%........(44)%
Occidental Petroleum..44%........78%........(34)%
Coca Cola....................24%.........56%........(32)%
Apache.......................26%.........50%........(24)%
Freeport-McMoran.....15%.........37%........(22)%
Amgen........................42%.........59%........(17)%
Morgan Stanley...........57%.........72%........(15)%
Eli Lilly (A)..................45%.........58%........(13)%
PepsiCo.......................49%.........59%........(10)%
United Technologies....41%.........48%.........(7)%
3M..............................48%.........53%.........(5)%
Bristol Myers Squibb...63%.........67%.........(4)%
GM..............................46%.........47%.........(1)%
McDonalds..................39%.........39%..........0%
Ford............................61%.........52%..........9%
(A) Eli Lilly includes its income from its operations in its Puerto Rico tax haven in with its US Pretax Income, thus its true US Pretax Income Mix is much lower than the above 45%.
From a quick review of the above two charts, the two clear patriotic US Multinational Corps are 3M, with US Pretax Income Mix of 48% and US Revenue Mix of a much lower 35%, and McDonald's, with US Pretax Income Mix of 39% and US Revenue Mix of a lower 34%. Also, both huge Auto Companies (Ford and GM) had favorable patriotic numbers.
On the other hand, many of these US Multinational Corps were the farthest thing away from being patriotic, as follows:
..BIG PHARMA
......Pfizer, with US Pretax Income Mix of a negative (26)%, Revenue from US Customer Mix of 43%, and US Asset Mix of 57%.
......Abbott Labs, with US Pretax Income Mix of a negative (5)%, Revenue from US Customer Mix of 43%, and US Asset Mix of 45%.
......Amgen, with US Pretax Income Mix of 42%, Revenue from US Customer Mix of 77%, and US Asset Mix of 59%.
......Eli Lilly, with US and Puerto Rico Combined Income Mix of 45%, Revenue from US Customer Mix of 56%, and US Asset Mix of 58%.
..BIG OIL
......Marathon Oil, with US Pretax Income Mix of only 11%, US Revenue Mix of 89%, and US Asset Mix of 55%.
......Occidental Petroleum, with US Pretax Income Mix of 44%, US Revenue Mix of 64%, and US Asset Mix of 78%
......Apache, with US Pretax Income Mix of 26%, US Revenue Mix of 35%, and US Asset Mix of 50%
......Schlumberger, with US Pretax Income Mix of 12%, and US Revenue Mix of 24%.
..BIG OTHER
......Cisco Systems, with US Pretax Income Mix of only 16%, and Revenues from US Customer Mix of a much higher 50%.
......Freeport-McMoran Copper and Gold, with US Pretax Income Mix of 15%, with Revenues from US Customer Mix of 28%, and US Asset Mix of 37%.
......United Technologies, with US Pretax Income Mix of 41%, and US Revenue Mix of 53%
......Morgan Stanley, with US Pretax Income Mix of 57%, and US Revenue Mix of 69%.
Given the above massive income shifts to minimize taxes, US Tax Policy must be changed to close these huge US Multinational Corp tax loopholes.
I think the optimal way to deal with all of the above tax unfairness, and at the same time, to permanently and substantially reduce US Federal Income Tax Rates for all business income (both to C Corps and to income from all pass thru entities), and to also reduce the US Deficit, is to close many of the tax loopholes of Big Corps, and to also institute a fair progressive minimum US Federal Income Tax on Worldwide Income.
With the resultant permanent, much lower US federal income tax rates on smaller businesses, I am pretty certain that a major dent in US unemployment and US underemployment will result.
When I get some time, I will research similar information related to Big US Corps with Worldwide Pretax Income ranging from $3 bil to $5 bil in the most recent year. It should be interesting.
