These 35 Minnesota Corps, led by US Bancorp’s exceptional earnings growth, generated Total Pretax Earnings in 2011 of $47.6 bil, up 13% over 2010, and up a more robust 35% over 2009.
These Minnesota Corp above percentage earnings increases are particularly robust when you factor in the fact that because of the extremely high quality of these Minnesota Corps, their earnings remarkably held up very well in 2009. In fact, Minnesota is the only larger US State whose Total Earnings of its largest Corps in 2009 were higher than that in 2008. The Total Pretax Income of the 11 Minnesota Corps, generating more than $1 bil of Pretax Income in any of these years, was $29.0 bil in 2009, a 2% increase over 2008.
The highest profit earner in Minnesota is the very well run Health Insurance Giant UnitedHealth Group. Its 2010 Pretax Income increased by 27% over 2009. Then its 2011 Pretax Income growth decelerated to an increase of only 8% over 2010. The positive aspect here with this UnitedHealth marked earnings growth deceleration in 2011 is that it shows that the Affordable HealthCare Act, parts of which started kicking in early in 2011, has really helped to rein in the country’s health care costs.
Minnesota citizens should be extremely proud of the operating performance in the most recent two years of their fine Minnesota Corporations.
Clearly, the Obama Administration has created an economic environment in the past two years that has permitted these Minnesota Corporations to flourish.
Minnesota is very fortunate to have as its US Senators, one of the most effective twosomes of any US State: Amy Klobuchar and Al Franken. These two have been very strong advocates and have done a great job in helping foster the operating success of these superb Minnesota companies.
And the following Minnesota members in the US House…..Keith Ellison, Betty McCollum, Collin Peterson, and Tim Walz…..have all been particularly strong advocates for these fine Minnesota companies.
I think the only way to ensure that these fine Minnesota Corps will generate Total Pretax Earnings growth for the remainder of 2012 that at least matches their 13% total earnings growth in 2011, and at the same time, also result in very robust US job creation, is for the US Congress to immediately pass the following economic initiatives:
- Extend the 100% first-year tax expensing of equipment and computer software investments made in the remainder of 2012. The CBO-scored cost should not be very significant.
- Substantially accelerate first-year tax depreciation on all new building and building remodeling investments made in the remainder of 2012, and rein in its CBO-scored cost, by lowering tax depreciation in years 2 through 10.
- Pass the Research and Experimentation Tax Credit for businesses for all 2012 expenditures, but substantially enhance it, especially for smaller businesses, and simplify it.
- Give small businesses, creating US jobs in 2012, a 10% tax credit.
- Give businesses a 20% income tax credit for the expenses of moving operations from overseas back to the US. And pay for this by removing income tax deductions businesses now get for moving their production from the US to overseas. This one's pretty cool, where the pay-for is also positive to the US job count.
- Permit US taxpayers, who have their mortgage loans financed by either Fannie Mae or Freddie Mac, to have their mortgages refinanced at the current lower prevailing market interest rates.
- Pass the substantial amount of school construction infrastructure fix ups for K-12 Schools and for Community Colleges, which is in the American Jobs Act (AJA). And all of these school investments should occur in 2012, and mostly from now through the end of the summer of 2012.
The above first two will result in explosive US economic stimulation, particularly when viewed in light of future business income tax reform, which should result in a much lower business income tax rate in 2013 and going forward.
Thus, businesses will get both the 100% first-year tax depreciation on equipment purchases and the substantially accelerated first-year tax deprecation on building investments in 2012 at a business income tax rate reduction which is much higher in 2012, and then the future earnings from these equipment and building investments will generate post 2012 earnings streams from these investments which are taxed at a much lower post tax reform business income tax rate. Wow, now that is bold economic stimulation.
This above bold economic stimulation effectively works like a back-door, stealth investment tax credit in 2012, due to the expected future reduction in business income tax rates starting in 2013 under any reasonable business tax reform.
The investment tax credit was used first by President Jack Kennedy in the early 1960s to get the US out of a deep recession. And President Lyndon Johnson also used it after he took over. The end result was US real GDP growth which averaged 4.85% from 1960 to 1968. And the US unemployment rate dropped substantially while this investment tax credit was in effect during the 1960s.
This kind of very robust US real GDP growth, markedly north of 4%, and for an extended period of time, is precisely what the US economy now needs. And this very strong GDP growth is by far the best way to substantially reduce the massive US Deficit.
But these explosive economic benefits to US businesses from this accelerated first-year tax depreciation does not necessarily mean that there will be resultant substantial US job creation from it.
Thus, I would make sure that the largest of the US Corps…..say the top 50 or so…..would get these first-year accelerated tax depreciation benefits in 2012 only if they add a sufficient number of US full-time workers in 2012.
And similar economic benefits will result from the Research and Experimentation Expenditures. Not only will businesses get higher Research Tax Credits in 2012 for making investments in 2012, but they will also get 2012 tax deductions from these Research investments made in 2012 at the higher business income tax rate in 2012, and then subsequently get the future earnings stream from these Research investments taxed at the lower post tax reform business income tax rate that will be applicable starting in 2013 and going forward.
Below here is the Minnesota headquarters location of each of these 35 Minnesota Corporations.
| Minnesota Corporation | Minnesota HQs |
| UnitedHealth Group | Minneapolis |
| US Bancorp | Minneapolis |
| 3M | St Paul |
| Target | Minneapolis |
| Medtronic | Minneapolis |
| Mosaic | Plymouth |
| General Mills | Minneapolis |
| Best Buy | Richfield |
| Ameriprise Financial | Minneapolis |
| CHS | Inver Grove Heights |
| St Jude Medical | St Paul |
| Hormel Foods | Austin |
| CH Robinson | Eden Prairie |
| Ecolab | St Paul |
| Fastenal | Winona |
| Enbridge Energy Partners | Duluth |
| Alliant Techsystems | Minneapolis |
| Patterson Companies | St Paul |
| Supervalu | Eden Prairie |
| Polaris Industries | Medina |
| Pentair | Golden Valley |
| Donaldson Co | Minneapolis |
| Valspar | Minneapolis |
| Deluxe | Shoreview |
| Graco | Minneapolis |
| TCF Financial | Wayzata |
| Toro | Bloomington |
| Techne | Minneapolis |
| Life Time Fitness | Chanhassen |
| HB Fuller | St Paul |
Late Additions
| American Crystal Sugar | Moorhead |
| Two Harbors Investment | Minnetonka |
| Fair Isaac | Minneapolis |
| Regis Corp | Minneapolis |
| Obama | |||||
| Bump | |||||
| PTI(L) | PTI(L) | ||||
| 1 Year | 2 Year | ||||
| PTI(L) | PTI(L) | PTI(L) | % | % | |
| 2011 | 2010 | 2009 | Change | Change | |
| mils $s | mils $s | mils $s | |||
| Minnesota | |||||
| UnitedHealth | 7,959 | 7,383 | 5,808 | 8% | 37% |
| US Bancorp | 6,629 | 4,200 | 2,632 | 58% | 152% |
| 3M | 6,031 | 5,755 | 4,632 | 5% | 30% |
| Target | 4,456 | 4,495 | 3,872 | -1% | 15% |
| Medtronic | 3,723 | 3,969 | 3,061 | -6% | 22% |
| Mosaic | 2,585 | 1,190 | 2,233 | 117% | 16% |
| General Mills | 2,428 | 2,205 | 1,942 | 10% | 25% |
| Best Buy | 2,250 | 2,331 | 2,329 | -3% | -3% |
| Ameriprise Financial | 1,385 | 1,634 | 920 | -15% | 51% |
| CHS | 1,148 | 584 | 504 | 97% | 128% |
| St Jude Medical | 1,019 | 1,209 | 1,057 | -16% | -4% |
| Hormel Foods | 719 | 625 | 528 | 15% | 36% |
| CH Robinson | 695 | 624 | 587 | 11% | 18% |
| Ecolab | 680 | 748 | 620 | -9% | 10% |
| Fastenal | 575 | 431 | 297 | 33% | 94% |
| Enbridge Energy Partners | 507 | 471 | 401 | 8% | 26% |
| Alliant Techsystems | 439 | 473 | 407 | -7% | 8% |
| Patterson Companies | 356 | 339 | 320 | 5% | 11% |
| Supervalu | 404 | 347 | 632 | 16% | -36% |
| Polaris Industries | 347 | 219 | 151 | 58% | 130% |
| Pentair | 313 | 300 | 173 | 4% | 81% |
| Donaldson Co | 312 | 230 | 161 | 36% | 94% |
| Valspar | 307 | 319 | 238 | -4% | 29% |
| Deluxe | 223 | 236 | 170 | -6% | 31% |
| Graco | 210 | 149 | 69 | 41% | 204% |
| TCF Financial | 179 | 244 | 144 | -27% | 24% |
| Toro | 175 | 141 | 96 | 24% | 82% |
| Techne | 165 | 156 | 155 | 6% | 6% |
| Life Time Fitness | 154 | 134 | 120 | 15% | 28% |
| HB Fuller | 124 | 96 | 120 | 29% | 3% |
| Total all 31 | 46,497 | 41,237 | 34,379 | 13% | 35% |
| Late Additions | |||||
| American Crystal Sugar | 813 | 535 | 544 | 52% | 49% |
| Two Harbors Investment | 126 | 35 | 2 | 260% | 6200% |
| Fair Isaac | 97 | 92 | 101 | 5% | -4% |
| Regis Corp | 48 | 53 | 127 | -9% | -62% |
| Grand Total all 35 | 47,581 | 41,952 | 35,153 | 13% | 35% |
