Procter & Gamble dominates the corporate landscape in Ohio. It generated Pretax Income in 2011 of $15.2 bil, up only 1% from 2010, and up only 5% from 2009.
The remaining 59 Ohio Corps generated Total Pretax Earnings in 2011 of $33.2 bil, up $9.3 bil, or up a very impressive 39% over 2010, and up a massive $23.2 bil, or up an off-the-charts 233% over 2009. Whoa!
In deriving Pretax Income, I start with Pretax Income under Generally Accepted Accounting Principles (GAAP), and then exclude several clearly unusual very large items relative to Pretax Income, such as Asset Impairments, Gains and Losses on both Debt Retirements and Asset Dispositions, Acquired In Process Research and Development Charges, and Special Litigation Charges and Gains.
Ohio citizens should be extremely proud of the operating performance in the most recent two years of their superb Ohio Corporations.
Clearly, the Obama Administration has created an economic environment that has permitted these Ohio Corporations to flat-out flourish.
With this off-the-charts 233% Total Pretax Earnings growth of these remaining 59 Ohio Corps in the most recent two years, which includes very strong Total Pretax Earnings growth of 39% in 2011 over 2010, there is no way that this robust 39% total earnings growth in 2011 will continue in 2012.
And this 39% earnings growth in 2011 for these 59 Ohio Corps has massively decelerated in the 1Q of 2012 to only 4%, going from Total Pretax Income of $9,515 mil in the 1Q 2011 to $9,879 mil in the 1Q 2012.
- 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 Ohio headquarters location and the Sector of each of these 60 Ohio Corporations.
| Ohio Corporation | Ohio HQs | Sector |
| Procter & Gamble | Cincinnati | Home Products |
| Marathon Petroleum | Findlay | Petroleum Refining, Marketing and Transportation |
| Cliffs Natural Resources | Cleveland | Metal Mining |
| Macy's | Cincinnati | Retail: Department Stores |
| Fifth Third Bancorp | Cincinnati | Banking |
| Kroger | Cincinnati | Retail: Grocery Stores |
| Eaton | Cleveland | Manufacturing: Power Management |
| Cardinal Health | Dublin | Wholesale: Drugs |
| Progressive Corp | Mayfield Village | Property and Casualty Insurance |
| Parker Hannifin | Cleveland | Manufacturing: Motion and Control Technologies and Systems |
| Limited Brands | Columbus | Retail: Clothing |
| Key Corp | Cleveland | Banking |
| Scripps Networks Interactive | Cincinnati | TV Services: Lifestyle Content |
| Sherwin Williams | Cleveland | Retail: Paints |
| JM Smucker | Orrville | Foods |
| Huntington Bancshares | Columbus | Banking |
| Timken | Canton | Manufacturing: Ball and Roller Bearings |
| Goodyear Tire & Rubber | Akron | Manufacturing: Tires and Inner Tubes |
| American Financial | Cincinnati | Property and Casualty Insurance |
| Teradata | Dayton | Technology: Computers |
| Cintas | Cincinnati | Workclothing |
| Owens Corning | Toledo | Manufacturing: Fiber Glass and Building Materials |
| Mettler Toledo | Columbus | Manufacturing: Lab Analytical Instruments |
| Big Lots | Columbus | Retail: Variety Stores |
| Nordson | Westlake | Manufacturing: Miscellaneous |
| TransDigm | Cleveland | Aircraft and Parts |
| Lincoln Electric | Cleveland | Manufacturing: Metalworking Machinery and Equipment |
| Dana Holding | Maumee | Manufacturing: Motor Vehicle Parts |
| RPM Intl | Medina | Manufacturing: Paints |
| Greif | Delaware | Paperboard Container and Boxes |
| Express | Columbus | Retail: Apparel |
| Owens-Illinois | Perrysburg | Manufacturing: Glass Containers |
| Health Care REIT | Toledo | Health Care: REIT |
| Steris | Mentor | Health Care: Orthopedics, Prosthetic and Surgical Appliances |
| Polyone | Avon Lakes | Manufacturing: Plastics |
| Scotts Miracle-Gro | Marysville | Agriculture Chemicals |
| Abercrombie & Fitch | New Albany | Retail: Clothing |
| Worthington Industries | Columbus | Manufacturing: Steel Works |
| Convergys | Cincinnati | Technology: Customer, Information and Human Resource Management |
| Cincinnati Financial | Fairfield | Property and Casualty Insurance |
| First Merit | Akron | Banking |
| Diebold | North Canton | Manufacturing: Accounting Machines |
| Lancaster Colony | Columbus | Foods |
| Nacco Industries | Cleveland | Manufacturing: Industrial Trucks, Tractors and Trailers |
| Aleris Intl | Beachwood | Manufacturing: Metals |
| American Greetings | Cleveland | Greeting Cards |
| Thor Industries | Jackson Center | Manufacturing: Motor Homes |
| Applied Industrial Technologies | Cleveland | Wholesale: Machinery, Equipment and Supplies |
| Andersons | Maumee | Wholesale: Farm Products |
| Graftech Intl | Parma | Manufacturing: Graphite Electrodes |
| DSW | Columbus | Retail: Shoe Stores |
| Chemed | Cincinnati | Health Care: Home Services |
| Momentive Specialty Chemicals | Columbus | Manufacturing: Plastics |
| Cooper Tire | Findlay | Manufacturing: Tires and Inner Tubes |
| Park National | Newark | Banking |
| First Financial Bancorp | Cincinnati | Banking |
| Cincinnati Bell | Cincinnati | Telephone Communications |
| OM Group | Cleveland | Manufacturing: Metals |
| AK Steel | West Chester | Manufacturing: Steel Works |
| State Auto Financial | Columbus | Property and Casualty Insurance |
| 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 | |||
| Ohio | |||||
| The Dominant One | |||||
| Procter & Gamble | 15,189 | 15,047 | 14,413 | 1% | 5% |
| The Rest | |||||
| Marathon Petroleum | 3,719 | 1,023 | 685 | 264% | 443% |
| Cliffs Natural Resources | 2,242 | 1,303 | 297 | 72% | 655% |
| Macy's | 1,968 | 1,320 | 898 | 49% | 119% |
| Fifth Third Bancorp | 1,831 | 940 | (991) | 95% | 285% |
| Kroger | 1,796 | 1,734 | 1,702 | 4% | 6% |
| Eaton | 1,553 | 1,036 | 303 | 50% | 413% |
| Cardinal Health | 1,518 | 1,212 | 1,160 | 25% | 31% |
| Progressive | 1,487 | 1,565 | 1,557 | -5% | -4% |
| Parker Hannifin | 1,414 | 755 | 683 | 87% | 107% |
| Limited Brands | 1,348 | 1,251 | 650 | 8% | 107% |
| Key Corp | 1,345 | 793 | (2,057) | 70% | 165% |
| Scripps Networks Interactive | 883 | 736 | 531 | 20% | 66% |
| Sherwin Williams | 742 | 678 | 623 | 9% | 19% |
| JM Smucker | 717 | 731 | 396 | -2% | 81% |
| Huntington Bancshares | 707 | 352 | (1,071) | 101% | 166% |
| Timken | 697 | 406 | 14 | 72% | 4879% |
| Goodyear Tire & Rubber | 618 | (65) | (357) | 1051% | 273% |
| American Financial | 560 | 689 | 812 | -19% | -31% |
| Teradata | 481 | 414 | 334 | 16% | 44% |
| Cintas | 393 | 344 | 411 | 14% | -4% |
| Owens Corning | 353 | 216 | 81 | 63% | 336% |
| Mettler Toledo | 349 | 308 | 225 | 13% | 55% |
| Big Lots | 342 | 355 | 323 | -4% | 6% |
| Nordson | 315 | 231 | 116 | 36% | 172% |
| TransDigm | 301 | 251 | 251 | 20% | 20% |
| Lincoln Electric | 301 | 187 | 87 | 61% | 246% |
| Dana Holding | 296 | 35 | (298) | 746% | 199% |
| RPM Intl | 295 | 268 | 181 | 10% | 63% |
| Greif | 243 | 252 | 138 | -4% | 76% |
| Express | 236 | 142 | 77 | 66% | 206% |
| Owens-Illinois | 235 | 424 | 215 | -45% | 9% |
| Health Care REIT | 226 | 156 | 170 | 45% | 33% |
| Steris | 204 | 192 | 166 | 6% | 23% |
| Polyone | 199 | 141 | 93 | 41% | 114% |
| Scotts Miracle-Gro | 195 | 320 | 208 | -39% | -6% |
| Abercrombie & Fitch | 186 | 229 | 120 | -19% | 55% |
| Worthington Industries | 183 | 113 | (44) | 62% | 516% |
| Convergys | 182 | 123 | 96 | 48% | 90% |
| Cincinnati Financial | 176 | 501 | 582 | -65% | -70% |
| First Merit | 166 | 140 | 108 | 19% | 54% |
| Diebold | 164 | 174 | 124 | -6% | 32% |
| Lancaster Colony | 162 | 175 | 137 | -7% | 18% |
| Nacco Industries | 157 | 116 | 19 | 35% | 726% |
| Aleris Intl | 157 | 63 | (461) | 149% | 134% |
| American Greetings | 156 | 156 | 121 | 0% | 29% |
| Thor Industries | 153 | 171 | 33 | -11% | 364% |
| Applied Industrial Technologies | 153 | 105 | 103 | 46% | 49% |
| Andersons | 148 | 104 | 61 | 42% | 143% |
| Graftech Intl | 143 | 174 | 81 | -18% | 77% |
| DSW | 142 | 112 | (54) | 27% | 363% |
| Chemed | 141 | 134 | 121 | 5% | 17% |
| Momentive Specialty Chemicals | 135 | 103 | (100) | 31% | 235% |
| Cooper Tire | 134 | 160 | 116 | -16% | 16% |
| Park National | 117 | 75 | 97 | 56% | 21% |
| First Financial Bancorp | 105 | 92 | 12 | 14% | 775% |
| Cincinnati Bell | 94 | 114 | 154 | -18% | -39% |
| OM Group | 25 | 107 | 37 | -77% | -32% |
| AK Steel | 14 | (111) | (98) | 113% | 114% |
| State Auto Financial | (109) | 25 | (13) | -536% | -738% |
| Total 59 Rest | 33,193 | 23,850 | 9,965 | 39% | 233% |
