These 30 North Carolina Corps, generated Total Pretax Earnings in 2011 of $24.7 bil, up 14% over 2010, and more than tripling with a 203% increase over 2009.
Bank of America dominates the corporate landscape in North Carolina. Merrill Lynch is owned by Bank of America, but because it is based in New York City and files separate financial statements with the SEC, I am including it with the other New York Corps.
Thus, the below Bank of America Pretax Earnings and Loss numbers exclude both Merrill Lynch and Goodwill Impairment Charges.
North Carolina citizens should be extremely proud of the operating performance in the most recent two years of their fine North Carolina Corporations.
Clearly, the Obama Administration has created an economic environment that has permitted these North Carolina Corporations to flat-out flourish.
North Carolina is very fortunate to have as one of its US Senators, Kay Hagan, and as two of its US House members G. K. Butterfield and David Price. All three of them are strong advocates for all of their North Carolina businesses of all sizes.
I think the only way to ensure that these fine North Carolina Corps will be able to generate Total Pretax Earnings growth for the remainder of 2012 that at least matches their 14% 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 North Carolina headquarters location and the Sector of each of these 30 North Carolina Corporations.
| North Carolina Corporation | North Carolina HQs | Sector |
| Bank of America | Charlotte | Banking |
| Lowes | Mooresville | Retail: Building Materials |
| Reynolds American | Winston-Salem | Cigarettes |
| Lorillard | Greensboro | Cigarettes |
| BB&T | Winston-Salem | Banking |
| Nucor | Charlotte | Manufacturing: Steel Works |
| Goodrich | Charlotte | Gided Missiles & Space Vehicles: US Defense Contractor |
| VF Corp | Greensboro | Apparel and Footwear |
| Laboratory Corp America | Burlington | Health Care: Medical Labs |
| Family Dollar Stores | Charlotte | Retail: Variety Stores |
| Hanesbrands | Winston-Salem | Apparel |
| Carlisle | Charlotte | Manufacturing: Fabricated Rubber Products |
| Belk | Charlotte | Retail: Department Stores |
| Babcock & Wilcox | Charlotte | Manufacturing: Engines and Turbines |
| Old Dominion Freight | Thomasville | Trucking |
| SPX | Charlotte | Manuacturing: Metalworking Machinery and Equipment |
| Harris Teeter Supermarkets | Matthews | Retail: Grocery Stores |
| Cree | Durham | Technology: Semiconductors |
| First Citizens Bancshares | Raleigh | Banking |
| Polypore | Charlotte | Manufacturing: Miscellaneous |
| Red Hat | Raleigh | Technology: Software |
| Sonic Automotive | Charlotte | Retail: Auto Dealer |
| RF Micro Devices | Greensboro | Technology: Semiconductors |
| Salix Pharmaceuticals | Raleigh | Health Care: Pharmaceuticals |
| Martin Marietta Materials | Raleigh | Mining |
| CATO | Charlotte | Retail: Women's Clothing |
| Triad Guaranty | Winston-Salem | Surety Insurance |
| Late Additions | ||
| Alliance One Intl | Morrisville | Wholesale: Farm Products |
| Hatteras Financial | Winston-Salem | REITs |
| Speedway Motorsports | Concord | Services: Racing, Including Track Operation |
And below here is the Pretax Income (PTI) and Pretax Loss (PTL) of these 30 North Carolina Corps for each of the most recent three years, with the most recent fiscal year ends ranging from March 2011 to February 2012.
| 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 | |||
| North Carolina | |||||
| Bank of America | 7,648 | 7,154 | (3,629) | 7% | 311% |
| Lowes | 2,906 | 3,228 | 2,825 | -10% | 3% |
| Reynolds American | 2,534 | 2,315 | 2,089 | 9% | 21% |
| Lorillard | 1,770 | 1,635 | 1,519 | 8% | 17% |
| BB&T | 1,628 | 969 | 1,036 | 68% | 57% |
| Nucor | 1,252 | 267 | 414 | 369% | 202% |
| Goodrich | 1,165 | 805 | 784 | 45% | 49% |
| VF Corp | 1,165 | 952 | 777 | 22% | 50% |
| Laboratory Corp America | 866 | 916 | 885 | -5% | -2% |
| Family Dollar Stores | 617 | 564 | 451 | 9% | 37% |
| Hanesbrands | 316 | 234 | 58 | 35% | 445% |
| Carlisle | 254 | 188 | 176 | 35% | 44% |
| Belk | 250 | 196 | 97 | 28% | 158% |
| Babcock & Wilcox | 235 | 236 | 232 | 0% | 1% |
| Old Dominion Freight | 220 | 124 | 57 | 77% | 286% |
| SPX | 220 | 271 | 291 | -19% | -24% |
| Ruddick | 181 | 158 | 152 | 15% | 19% |
| Cree | 178 | 205 | 40 | -13% | 345% |
| First Citizens Bancshares | 160 | 168 | 79 | -5% | 103% |
| Polypore | 157 | 89 | 17 | 76% | 824% |
| Red Hat | 208 | 154 | 122 | 35% | 70% |
| Sonic Automotive | 126 | 78 | 28 | 62% | 350% |
| RF Micro Devices | 124 | 85 | (260) | 46% | 148% |
| Salix Pharma | 113 | 11 | (46) | 927% | 346% |
| Martin Marietta Materials | 101 | 130 | 111 | -22% | -9% |
| CATO | 100 | 93 | 67 | 8% | 49% |
| Triad Guaranty | (108) | 102 | (612) | -206% | 82% |
| Total all 27 | 24,386 | 21,327 | 7,760 | 14% | 214% |
| Late Additions | |||||
| Hatteras Financial | 284 | 170 | 174 | 67% | 63% |
| Speedway Motorsports | 74 | 71 | 109 | 4% | -32% |
| Alliance One Intl | (38) | 133 | 109 | -129% | -135% |
| Grand Total all 30 | 24,706 | 21,701 | 8,152 | 14% | 203% |
