These 18 Wisconsin Corps had their Total Pretax Earnings in 2011 increase by 15% over 2010, and increase by an off-the-charts 331% over 2009.
And in the most recent 1Q 2012, these 18 Wisconsin Corps had their Total Pretax Earnings increase by a lower 6% over the 1Q 2011, going from $2,497 mil in the 1Q 2011 to $2,655 mil in the 1Q 2012.
While fiscal year ended 2011 results of Wisconsin Corps were pretty good, with total earnings growth of 15%, fiscal year ended 2010 results were spectacular, with earnings growth of 274%. The fiscal year ended 2010, which ran from the second half of 2009 to the second half of 2010 for nearly all of these Wisconsin Corps, was when the Obama Administration’s economic stimulus programs, both business income tax incentives and wise, very carefully vetted US Government investments, were going full throttle.
Thus, the result was that for these 18 Wisconsin Corps, the Total Pretax Income increased from $2.2 bil in fiscal years ended 2009 to $8.3 bil in fiscal years ended 2010, for an increase of a clearly off-the-charts 274%.
Johnson Controls led this massive earnings growth charge. It went from a Pretax Loss of $0.2 bil in its fiscal year ended September 2009 to a Pretax Profit of $1.8 bil in its fiscal year ended September 2010.
And so many of Wisconsin’s manufacturing companies followed the earnings turnaround pattern set by Johnson Controls in fiscal year ended 2010. The manufacturers at least roughly doubling their earnings in fiscal year ended 2010 were Oshkosh, Rockwell Automation and Harley Davidson.
A combination of the Obama Administration and both the US House and the US Senate being under Democratic control created the robust economic environment for these Wisconsin Corporations to flat out flourish in the fiscal year ended 2010.
In this fiscal year ended 2010 period, where Wisconsin companies flat-out flourished, Wisconsin had two outstanding US Senators: the brilliant Russ Feingold and the very effective, solutions-oriented Herb Kohl, who were both Democrats. On the other hand, in 2011 and in the 1Q 2012, where the Wisconsin Corporate earnings growth was substantially lower, there was only one US Democratic Senator from Wisconsin.
And in this same economically robust 2010 period, Wisconsin had five outstanding, results-driven Democrats in the US House: Tammy Baldwin, Ron Kind, the legendary Dave Obey, Gwen Moore, and Steve Kagan. On the other hand, in 2011 and in the 1Q 2012, where the Wisconsin Corporate earnings growth was substantially lower, there were only three US Democratic House members from Wisconsin.
Also, when the Wisconsin economy was absolutely on fire during 2010, with the Total Pretax Earnings growth of these 18 Wisconsin Corporations being an incredible 274% over 2009, the Wisconsin Governor was Jim Doyle, a Democrat, who clearly viewed his job as one of governing equally for all of his constituencies…..Democrats, Republicans, and Independents, as well as for all Wisconsin businesses of all sizes. On the other hand, Wisconsin had a Republican Governor in annual 2011, when the total earnings growth over 2010 of these 18 Wisconsin Corporations was a much lower 15%, and also in the most recent 1Q 2012, when such total earnings growth was an even lower 6%.
In addition, the Wisconsin State Senate and the Wisconsin State Assembly were both in Democratic Control during 2010, when Wisconsin's economy was so highly charged.....working on all cylinders, as evidenced by the 274% total earnings growth of these 18 Wisconsin Corporations in 2010. On the other hand, in 2011 and in the 1Q 2012, where the Wisconsin Corporate earnings growth was substantially lower, the Wisconsin State Senate and the Wisconsin State Assembly were both in Republican Control.
Now that is what I call massive earnings growth deceleration.....274% in 2010 under a Democratic Governor and a Democratic State Legislature.....15% in 2011 under a Republican Governor and Republican State Legislature.....6% in the 1Q 2012 under a Republican Governor and a Republican State Legislature.....something is clearly needed to turn this massive earnings growth deceleration around for the good of all Wisconsin citizens.
Further, in this same robust 2010 fiscal year, the Mayor of Milwaukee, by far Wisconsin’s largest city, was the visionary, practical, solutions-oriented Tom Barrett, a Democrat, who like Wisconsin Governor Jim Doyle, also clearly viewed his job as one of governing equally for all of his constituencies…..Democrats, Republicans, and Independents. And Barrett was and still is a strong, very effective advocate for Milwaukee area businesses and for all Wisconsin businesses of all sizes.
In addition, the Wisconsin State Senate and the Wisconsin State Assembly were both in Democratic Control during 2010, when Wisconsin's economy was so highly charged.....working on all cylinders, as evidenced by the 274% total earnings growth of these 18 Wisconsin Corporations in 2010. On the other hand, in 2011 and in the 1Q 2012, where the Wisconsin Corporate earnings growth was substantially lower, the Wisconsin State Senate and the Wisconsin State Assembly were both in Republican Control.
Now that is what I call massive earnings growth deceleration.....274% in 2010 under a Democratic Governor and a Democratic State Legislature.....15% in 2011 under a Republican Governor and Republican State Legislature.....6% in the 1Q 2012 under a Republican Governor and a Republican State Legislature.....something is clearly needed to turn this massive earnings growth deceleration around for the good of all Wisconsin citizens.
Further, in this same robust 2010 fiscal year, the Mayor of Milwaukee, by far Wisconsin’s largest city, was the visionary, practical, solutions-oriented Tom Barrett, a Democrat, who like Wisconsin Governor Jim Doyle, also clearly viewed his job as one of governing equally for all of his constituencies…..Democrats, Republicans, and Independents. And Barrett was and still is a strong, very effective advocate for Milwaukee area businesses and for all Wisconsin businesses of all sizes.
With this extremely high 331% Total Pretax Earnings growth of these 18 Wisconsin Corps in the most recent two years, which includes Total Pretax Earnings growth of 15% in 2011 over 2010, there is no way that this 15% total earnings growth in 2011 will continue in 2012.
And this total earnings growth has decelerated in the 1Q of 2012 to only 6%.
- 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 Wisconsin headquarters location and the Sector of each of these 18 Wisconsin Corporations.
| Wisconsin Corporation | Wisconsin HQs | Sector |
| Johnson Controls | Milwaukee | Building Efficiency, Automotive and Power Solutions |
| Kohls | Menomonee Falls | Retail: Department Stores |
| Joy Global | Milwaukee | Mining Machinery |
| Rockwell Automation | Milwaukee | Manufacturing: Measuring and Controlling Devices |
| Fiserv | Brookfield | Computer Processing and Data Preparation |
| Harley Davidson | Milwaukee | Manufacturing: Motorcycles |
| Manpower | Milwaukee | Employment Services |
| Oshkosh | Oshkosh | Manufacturing: Motor Vehicles |
| Snap-On | Kenosha | Manufacturing: Tools |
| Bemis | Neenah | Manufacturing: Packaging Products |
| Regal Beloit | Beloit | Manufacturing: Motors and Generators |
| Associated Banc | Green Bay | Banking |
| Sensient Technologies | Milwaukee | Chemicals |
| AO Smith | Milwaukee | Manufacturing: Water Heaters and Boilers |
| Actuant | Menomonee Falls | Manufacturing: Machinery and Equipment |
| Brady | Milwaukee | Manufacturing: Miscellaneous |
| Spectrum Brands | Madison | Manufacturing: Elecrtrical Machinery and Equipment |
| MGIC Investment | Milwaukee | Surety 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 | |||
| Wisconsin | |||||
| Johnson Controls | 2,111 | 1,763 | (207) | 20% | 1120% |
| Kohls | 1,859 | 1,788 | 1,558 | 4% | 19% |
| Joy Global | 896 | 679 | 683 | 32% | 31% |
| Rockwell Automation | 868 | 544 | 274 | 60% | 217% |
| Fiserv | 814 | 793 | 734 | 3% | 11% |
| Harley Davidson | 793 | 475 | 207 | 67% | 283% |
| Manpower | 480 | 264 | 38 | 82% | 1163% |
| Oshkosh | 417 | 1,212 | 12 | -66% | 3375% |
| Snap-On | 413 | 277 | 205 | 49% | 101% |
| Bemis | 292 | 327 | 240 | -11% | 22% |
| Regal Beloit | 226 | 221 | 138 | 2% | 64% |
| Associated Banc-Corp | 183 | (41) | (285) | 546% | 164% |
| Sensient Technologies | 171 | 154 | 123 | 11% | 39% |
| AO Smith | 162 | 109 | 92 | 49% | 76% |
| Actuant | 159 | 89 | 58 | 79% | 174% |
| Brady | 144 | 109 | 97 | 32% | 48% |
| Spectrum Brands | 49 | (121) | 15 | 140% | 227% |
| MGIC Investment | (484) | (359) | (1,765) | -35% | 73% |
| Total all 18 | 9,553 | 8,283 | 2,217 | 15% | 331% |
