These 70 Pennsylvania Corps generated Total Pretax Earnings in 2011 of $41.2 bil, up a very robust 23% over 2010, and up an even more impressive 126% over 2009.
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, and Special Litigation Charges and Gains.
Pennsylvania citizens should be extremely proud of the operating performance in the most recent two years of their superb Pennsylvania Corporations.
Clearly, the Obama Administration has created an economic environment that has permitted these Pennsylvania Corporations to flat-out flourish.
And the legendary former Pennsylvania Governor Ed Rendell also was a major contributor to the success of these fine Pennsylvania companies.
With this extremely high 126% Pretax Earnings growth of these Pennsylvania Corps in the most recent two years, which includes very solid Pretax Earnings growth of 23% in 2011 over 2010, there is no way that this robust 23% total earnings growth in 2011 will continue in 2012.
And this total earnings growth has massively decelerated in the 1Q of 2012 to a meager 1%, with Total Pretax Income going from $10,628 mil in the 1Q 2011 to $10,780 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 Pennsylvania headquarters location of each of these 70 Pennsylvania Corporations. There are two of these Corps, Ace Ltd and TE Connectivity, which are Swiss Corporations, but with their CPA firm being located in Philadelphia.
| Pennsylvania Corporation | Pennsylvania HQs |
| Comcast | Philadelphia |
| PNC Financial | Pittsburgh |
| ACE Ltd | Philadelphia |
| Air Products & Chemicals | Allentown |
| TE Connectivity | Philadelphia |
| PPG Industries | Pittsburgh |
| Santander Holdings US | Wyomissing |
| HJ Heinz | Pittsburgh |
| Lincoln National | Radnor |
| AmeriSource Bergen | Chesterbrook |
| Alcoa | Pittsburgh |
| Hershey | Hershey |
| CONSOL Energy | Canonsburg |
| Mylan Inc | Canonsburg |
| Universal Health Services | King of Prussia |
| Crown Holdings | Philadelphia |
| FMC | Philadelphia |
| Ametek | Berwyn |
| EQT | Pittsburgh |
| Endo Pharmaceuticals | Chadds Ford |
| Airgas | Radnor |
| Dick's Sporting Goods | Coraopolis |
| Penn National Gaming | Wyomissing |
| Gardner Denver | Wayne |
| Radian Group | Philadelphia |
| Education Management | Pittsburgh |
| Erie Indemnity | Erie |
| Sunoco Logistics Partners | Philadelphia |
| Allegheny Technologies | Pittsburgh |
| Vishay Intertechnology | Malvern |
| SEI Investments | Oaks |
| Kennametal | Latrobe |
| Urban Outfitters | Philadelphia |
| Wesco Intl | Pittsburgh |
| Ansys | Canonsburg |
| Dentsply | York |
| Westinghouse Air Brake | Wilmerding |
| Federated Investors | Pittsburgh |
| American Eagle Outfitters | Pittsburgh |
| Triumph Group | Berwyn |
| Select Medical | Mechanicsburg |
| Viropharma | Exton |
| GNC Holdings | Pittsburgh |
| Sunoco | Philadelphia |
| Unisys | Blue Bell |
| Fulton Financial | Lancaster |
| Armstrong World Industries | Lancaster |
| Amerigas Partners | Valley Forge |
| Teleflex | Limerick |
| Kulicke & Soffa | Philadelphia |
| EnerSys | Reading |
| Liberty Property Trust | Malvern |
| InterDigital | King of Prussia |
| Aramark | Philadelphia |
| FNB Corp | Hermitage |
| Weis Markets | Sunbury |
| Natl Penn Bancshares | Boyertown |
| Matthews Intl | Pittsburgh |
| Mine Safety Appliances | Pittsburgh |
| II-VI Inc | Saxonburg |
| Harsco | Camp Hill |
| United States Steel | Pittsburgh |
| Harleysville Group | Harleysville |
| Toll Brothers | Horsham |
| SunGard Data Systems | Wayne |
| Rite Aid | Camp Hill |
| ING USA Annuity & Life Insurance | West Chester |
| DFC Global | Berwyn |
| United Refining | Warren |
| EME Homer City Generation LP | Homer City |
| 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 | |||
| Pennsylvania | |||||
| Comcast | 8,207 | 6,104 | 5,106 | 34% | 61% |
| PNC Financial | 4,069 | 4,061 | 2,149 | 0% | 89% |
| ACE Ltd | 2,091 | 3,667 | 3,077 | -43% | -32% |
| Air Products & Chemicals | 1,661 | 1,394 | 837 | 19% | 98% |
| TE Connectivity Ltd | 1,629 | 1,558 | (123) | 5% | 1424% |
| PPG Industries | 1,597 | 1,295 | 617 | 23% | 159% |
| Santander Holdings US | 1,523 | 1,019 | (1,123) | 49% | 236% |
| HJ Heinz | 1,374 | 1,290 | 1,320 | 7% | 4% |
| Lincoln National | 1,346 | 1,234 | 209 | 9% | 544% |
| AmeriSource Bergen | 1,131 | 1,028 | 824 | 10% | 37% |
| Alcoa | 1,063 | 548 | (1,498) | 94% | 171% |
| Hershey | 963 | 809 | 671 | 19% | 44% |
| CONSOL Energy | 904 | 468 | 788 | 93% | 15% |
| Mylan Inc | 704 | 483 | 453 | 46% | 55% |
| Universal Health Services | 696 | 481 | 475 | 45% | 47% |
| Crown Holdings | 587 | 614 | 459 | -4% | 28% |
| FMC | 572 | 432 | 356 | 32% | 61% |
| Ametek | 557 | 406 | 295 | 37% | 89% |
| EQT | 556 | 355 | 254 | 57% | 119% |
| Endo Pharmaceuticals | 468 | 456 | 336 | 3% | 39% |
| Airgas | 450 | 355 | 429 | 27% | 5% |
| Dick's Sporting Goods | 432 | 298 | 223 | 45% | 94% |
| Penn National Gaming | 389 | 230 | 204 | 69% | 91% |
| Gardner Denver | 387 | 232 | 124 | 67% | 212% |
| Radian Group | 369 | (1,580) | (242) | 123% | 252% |
| Education Management | 369 | 297 | 166 | 24% | 122% |
| Erie Indemnity | 358 | 999 | 524 | -64% | -32% |
| Sunoco Logistics Partners | 347 | 228 | 250 | 52% | 39% |
| Allegheny Technologies | 339 | 126 | 74 | 169% | 358% |
| Vishay Intertechnology | 331 | 406 | (40) | -18% | 928% |
| SEI Investments | 318 | 370 | 362 | -14% | -12% |
| Kennametal | 296 | 77 | (12) | 284% | 2567% |
| Urban Outfitters | 289 | 417 | 344 | -31% | -16% |
| Wesco Intl | 279 | 158 | 137 | 77% | 104% |
| Ansys | 265 | 216 | 174 | 23% | 52% |
| Dentsply | 256 | 358 | 363 | -28% | -29% |
| Westinghouse Air Brake | 255 | 187 | 163 | 36% | 56% |
| Federated Investors | 246 | 301 | 327 | -18% | -25% |
| American Eagle Outfitters | 237 | 295 | 304 | -20% | -22% |
| Triumph Group | 234 | 126 | 136 | 86% | 72% |
| Select Medical | 215 | 124 | 102 | 73% | 111% |
| Viropharma | 208 | 201 | 86 | 3% | 142% |
| GNC Holdings | 208 | 147 | 111 | 41% | 87% |
| Sunoco | 207 | 563 | (120) | -63% | 273% |
| Unisys | 206 | 223 | 218 | -8% | -6% |
| Fulton Financial | 196 | 173 | 89 | 13% | 120% |
| Armstrong World Industries | 193 | 89 | 93 | 117% | 108% |
| Amerigas Partners | 179 | 171 | 190 | 5% | -6% |
| Teleflex | 164 | 155 | 164 | 6% | 0% |
| Kulicke & Soffa | 162 | 140 | (77) | 16% | 310% |
| EnerSys | 151 | 87 | 119 | 74% | 27% |
| Liberty Property Trust | 132 | 125 | 125 | 6% | 6% |
| InterDigital | 125 | 238 | 113 | -47% | 11% |
| Aramark | 122 | 33 | (24) | 270% | 608% |
| FNB Corp | 119 | 103 | 50 | 16% | 138% |
| Weis Markets | 118 | 107 | 98 | 10% | 20% |
| Natl Penn Bancshares | 113 | 33 | (137) | 242% | 182% |
| Matthews Intl | 112 | 110 | 91 | 2% | 23% |
| Mine Safety Appliances | 105 | 57 | 65 | 84% | 62% |
| II-VI Inc | 102 | 51 | 46 | 100% | 122% |
| Harsco | 42 | 20 | 159 | 110% | -74% |
| United States Steel | 27 | (385) | (1,845) | 107% | 101% |
| Harleysville Group | 16 | 83 | 116 | -81% | -86% |
| Toll Brothers | (29) | (117) | (496) | 75% | 94% |
| SunGard Data Systems | (143) | (219) | (175) | 35% | 18% |
| Rite Aid | (392) | (546) | (480) | -14% | 29% |
| Total all 66 | 40,802 | 33,564 | 18,173 | 22% | 125% |
Late Additions
| ING USA Annuity & Life Insurance | 399 | 26 | (133) | 1435% | 400% |
| DFC Global | 102 | 55 | 66 | 85% | 55% |
| United Refining | (11) | (115) | 54 | 90% | -120% |
| EME Homer City Generation LP | (75) | 38 | 111 | -297% | -168% |
| Grand Total all 70 | 41,217 | 33,568 | 18,271 | 23% | 126% |
