Job Creation Proposal #6: Three-Year and Enhanced Research Tax Credits

Presently, as one of many recurring annual US tax extenders, and the only one of these tax extenders that is a real job creator, businesses receive a tax credit for incremental research expenses incurred through the end of the current year. Generally, this tax credit is computed at 20% of the excess of qualified research expenses for the current year over a base period amount.

My proposal here is to step up this 20% to 40% for small US businesses in 2010, and from 20% to 30% for larger US businesses in 2010. Also, to give US businesses more certainty, the Research Tax Credit would be extended for two additional years, at 35% in 2011 and at 30% in 2012 for small US businesses, and at 25% in 2011 and at 20% in 2012 for larger businesses. Thus, my proposal will be a much more substantial US job creator than the previous annual tax extension approach. And with the way my proposal deals with US multinational corps creatively, and fairly, the total CBO scored cost of this three-year proposal should approximate the cost of the normal research tax credit one-year extension. How is that possible? Just read on.

Clearly, companies, and the US as a whole, receive major benefits from these US research expenditures. However, there is also a major drawback to the country. The majority of these US research tax credits are given to multinational corps who subsequently generate income overseas from the fruits of this US research. Thus the end result is that these multinational corps receive both US tax deductions and also US Research Tax Credits, even though much of the subsequent related taxable income is generated overseas and thus not taxed in the US. Also, the majority of the job creation of multinational corps from this US research is overseas. Let me explain in much more depth.

From income tax footnotes in their annual reports, of the present 30 Dow Industrial Stocks, there are 12 of them which either have minor research expenditures, such as Financial companies and Retailers, or which are predominately domestic companies.

Thus, here are the remaining present 18 Dow Industrial Stocks with significant overseas operations and also significant research expenditures. Also shown here are the total Pretax Operating Income earned outside the US (or Intl Operating Income) as well as the percentage these Intl Earnings, which were generated outside of the US (or Intl % Mix), comprised of the Worldwide Earnings of each of these 18 companies in total for the last 11 years….the last two Clinton/Gore years (1999 and 2000), all eight Bush/Cheney years (2001-2008), and the first year of Obama/Biden (2009).

……………………....Intl Income....Intl Mix
Exxon Mobil……….$363.8 bil……78%
Chevron…………….$160.1 bil……74%
GE………………….....$115.5 bil…….53%
Pfizer………………...$ 89.0 bil…….85%
IBM……………….....$ 68.1 bil…….49%
Microsoft…………..$ 62.4 bil…….37%
JNJ…………………...$ 60.2 bil…….48%
Merck………………..$ 55.2 bil…….57%
Hewlett-Packard… $ 50.0 bil…….90%
Coca Cola…….........$ 45.5 bil…….67%
Procter & Gamble…$ 41.4 bil…….39%
Cisco Systems………$ 36.4 bil…….56%
Intel…………………...$ 28.7 bil…….31%
United Technologies$ 25.4 bil…….54%
3M…………………......$ 21.4 bil…….47%
Kraft Foods…………..$ 15.1 bil…….35%
Caterpillar…………....$ 14.9 bil…….53%
DuPont……………......$ 14.0 bil…….45%

Total………………...$1,267 bil……60%

Yeah, that’s correct, a monstrous $1.3 trillion of overseas earnings for just these 18 Dow companies, which represents a massive 60% of their worldwide pretax operating earnings.

But even more important, check out the annual trend in the Total Intl Pretax Income Mix as a Percentage of Worldwide Pretax Income for these 18 huge Dow companies:

2009…..74%
2008…..71%
2007…..66%
2006…..62%
2005…..56%
2004…..58%
2003…..52%
2002…..55%
2001…..48%
2000…..46%
1999…..43%

Yeah, that’s a 31% Intl income mix growth in just the last decade (43% in Clinton’s 1999 to 74% in Obama’s 2009). And get ready for these just incredible numbers….Intl income for these 18 companies more than tripled from $50 bil in 1999 to $155 bil in 2009, whereas US income for these 18 companies declined from $66 bil in 1999 to $53 bil in 2009. And this trend was most pronounced in the last four years of the Bush/Cheney Administration, with Intl income of these 18 companies growing from $130 bil in 2005 to $211 bil in 2008 (yeah, that’s up 62% in only three years), but with US income of these same 18 companies declining from $100 bil in 2005 to $85 bil in 2008 (yeah, that’s down 15% in the same three years). Whew, we clearly need some policies that will get us back much closer economically to the Clinton years.

The Bush/Cheney income tax rate reductions on the wealthy and the unfunded wars both contributed heavily to the build up of the US deficit in the 2000s decade. However, I think this US multinational corps massive shift from US income to Intl income is the single main reason for the present US double economic disaster…sky-high US federal deficit and sky-high US unemployment/underemployment rates. The earnings, along with the US jobs, were transferred overseas in the decade of the 2000s. And these companies still received massive R&D US federal income tax deductions and also R&D tax credits for doing just that. Thus the now massive US deficit ballooned from both the dramatic drop in US corporate income taxes paid by the multinational corps and also from the dramatic drop in US federal individual income taxes and payroll taxes from the US jobs transferred overseas, with the latter also causing substantial financial pressure on State government coffers, along with the additional US deficit increases from the necessary funding of State government shortfalls.

Yeah, it’s the “Leave Multinational Corp Businesses Alone” decade of the 2000s, predominately in the Bush/Cheney years, causing the present US double economic disaster. You can’t blame the US multinational corps for these massive offshoring steps to maximize their worldwide income. After all, the CEOs of these US multinational corps are rightfully working for their stockholders. However, I think you can rightfully blame the US government for either not being financially savvy enough to understand it or looking the other way while all of this long-term financial devastation to the US jobs picture and to the US federal deficit was happening in the 2000s decade. And then for the US government to pile on by allowing the foreign earnings repatriation in 2004 with a 85% dividend received deduction…..Whoa, and there were even some Democrats who voted for this US multinational corp boondoggle, that effectively forgave US multinational corps of billions and billions of dollars of what they owed the US government in income taxes.

Further, I think it is helpful to look at the changing global income mix of each of these 18 companies in the past decade.

………………………International Pretax Income Mix Percentage
…………………………………………………………............2008-2009
……………………………………………………………..............vs
…………………………………………………………............1999-2000
..........................................................................Average
………………………..2009…..2008…..2000…1999….Change
Caterpillar…………214%.....52%.......29%.....26%.....105%
GE…………………….105%.....87%.......30%.....28%.......67%
Pfizer…………………134%...118%.......82%.....55%.......57%
Microsoft……………72%.....47%.......17%.....10%.......46%
Cisco Systems…….79%......79%......41%......35%......36%
Coca Cola…………..70%......93%......56%......61%......23%
Exxon Mobil……...93%......88%......66%......71%......22%
Chevron…………….93%......75%.......59%......70%.....20%
3M……………………...50%......56%.......40%......30%.....18%
Merck………………….65%......48%.......46%......35%.....16%
JNJ……………………..55%......61%.......43%.......43%.....15%
Kraft Foods…………46%......48%.......36%.......35%.....12%
DuPont……………….92%......59%.......55%.......73%.....11%
Hewlett-Packard….73%......79%........67%......67%......9%
Intel…………………….43%......20%........26%......36%......1%
Procter & Gamble…41%......44%........46%......40%......0%
IBM…………………….47%......50%........49%......50%.....-1%
United Technologies55%......58%........45%......72%.....-2%

Total……………………74%......71%........46%......43%.......28%

To further extend the research here, below are 27 US Non-Dow Industrial Stocks that I found from a quick review which had significant International Operations, significant Research Expenditures and also pretty healthy annual worldwide consolidated income for the most recent five years. You can clearly see the growing Intl income mix trend, particularly so for the 5 Oil-Related Stocks shown here.

…………………… …..........Intl
…………………… …........Income... Intl Operating Income % Mix
…………………… ….........2009 …. 2009. 2008.. 2007. 2006. 2005
Conoco Phillips……... $7.6 bil... 76%... 54%... 40%... 53%... 47%
Abbott Labs…………... $5.7 bil... 79%.. 101%... 85%.. 138%... 55%
Google………………..... $4.8 bil... 57%... 65%... 43%... 33%... 28%
Apple………………….... $4.4 bil... 55%... 51%... 44%... 53%... 51%
Oracle………………...... $4.1 bil... 52%... 50%... 45%... 43%... 52%
PepsiCo……………...... $3.9 bil... 48%... 54%... 47%... 45%... 50%
Schlumberger………... $3.8 bil... 98%... 79%... 74%... 68%... 70%
Amgen………………..... $3.1 bil... 60%... 52%... 63%... 58%... 38%
Bristol-Myers Squibb $2.9 bil... 52%... 53%... 74%.. 126%... 82%
Occidental Petroleum $2.8 bil... 57%... 48%... 46%... 43%... 35%
Ebay…………………...... $2.7 bil... 95%... 85%.... 4%... 50%... 39%
Colgate Palmolive…... $2.4 bil... 67%... 66%... 69%... 71%... 57%
Baxter………………...... $2.3 bil... 84%... 89%... 95%... 89%... 76%
Dell……………………..... $1.8 bil... 89%... 81%... 86%... 78%... 65%
Corning………………..... $1.7 bil... 90%... 72%... 74%... 13%... 32%
Medtronic…………….... $1.5 bil... 56%... 75%... 55%... 50%... 63%
Emerson Electric…...... $1.3 bil... 53%... 53%... 50%... 43%... 46%
Honeywell…………....... $1.2 bil... 41%... 48%... 38%... 33%... 33%
Nike…………………....... $1.1 bil... 57%... 72%... 63%... 61%... 59%
Halliburton…………….. $1.1 bil... 65%... 31%... 36%... 31%... 30%
Qualcomm…………...... $1.0 bil... 50%... 59%... 54%... 54%... 44%
Kimberly-Clark……..... $.9 bil... 36%... 45%... 37%... 26%... 21%
Apache………………..... $.9 bil.. 274%.. 138%... 63%... 68%... 64%
Dow Chemical……...... $.8 bil.. 162%.. 201%... 95%... 55%... 58%
Illinois Tool Works….. $.7 bil... 59%... 49%... 36%... 39%... 36%
Texas Instruments….. $.6 bil... 32%... 30%... 26%... 29%... 36%
Deere…………………..... $.6 bil... 44%... 45%... 40%... 34%... 42%

Total………………….. $65.7 bil... 63%... 61%... 53%... 54%... 49%

My Research Tax Credit Proposals

For 2010, I would
• Increase the US Research Tax Credit from 20% to 40% for 100% domestic small businesses with revenues under a certain amount.
• Increase the US Research Tax Credit from 20% to 30% for 100% domestic businesses with revenues higher than the above small business threshold
• For corps with both US and Intl revenues, set the maximum US Research Tax Credit at 30%, however multiply this 30% by a fraction, which cannot exceed 100%, the numerator being the US pretax operating income and the denominator being the Consolidated worldwide pretax operating income (both numbers coming from the income tax footnote in the most recent annual report)
• Give corps with both US and Intl revenues a second option of instead of the above fraction of the maximum 30% approach, they would be entitled to the entire maximum 30% US Research Tax Credit, if they choose to fund it completely with their foreign earnings repatriation tax (I would set the Research Tax Credit pecking order for foreign earnings repatriation tax tranches precisely in between the Jobs Tax Credit and the Manufacturing Tax Credit)

For 2011, I would reduce the above 40% to 35% for 100% domestic small businesses. Also, I would reduce the above 30% to 25% for larger 100% domestic businesses. On multinationals, the maximum 30% drops to 25%, and the fraction is computed the same way as in 2010, and also the Research Tax Credit would be the first tax tranch for foreign earnings repatriation tax purposes.

For 2012, I would reduce the above 40% to 30% for 100% domestic small businesses. Also, I would reduce the above 30% to 20% for larger 100% domestic businesses. On multinationals, the maximum 30% drops to 20%, and the fraction is computed the same way as in 2010 and the Research Tax Credit would be the first tax tranch for foreign earnings repatriation tax purposes.

I think this three-year approach on the US Research Tax Credit gives US businesses more certainty, which they claim they really need to add US jobs.

The overall CBO cost of this three-year program should approximate the cost of a normal one-year tax extender for the US Research Tax Credit. This very desirable result occurs even though the proposal includes Research Tax Credits for three years instead of for one year and also includes a higher maximum Research Tax Credit percentage. The reason the CBO cost doesn't vary substantially is due to the fact that the majority of the US Research expenditures are made by the large US multinational corps. If these multinational corps choose the maximum Research Tax Credit option, there will be no CBO-scored cost to the US government, since it is completely funded by the foreign earnings repatriation tax. And if they don’t choose the maximum option, their high international operating income mix will substantially and fairly eat into the US Research Tax Credit they will be entitled to.

Now, let me address how I would consider paying for this strong US job-creating proposal, in addition to the above mentioned substantial foreign earnings repatriation tax funding.

For the largest funding vehicle, I would focus on the incentives to move US job overseas and try to reverse this financially devastating trend. It’s all about lower wages and lower corporate income taxes offshore. I have no problem with a US multinational corp setting up a manufacturing plant in Ireland for its very favorable corporate income tax environment, and then those products manufactured in Ireland getting subsequently sold to somewhere in Europe. Likewise, ignoring the unfair air pollution problem which needs to get addressed in climate change legislation, I have no problem with a US multinational corp manufacturing products in places like the Puerto Rico tax haven or in Mexico, and then these manufactured goods are subsequently sold to somewhere in South America.

However, if these products manufactured by a US multinational corp in a low-taxed or low-wage environment offshore are subsequently sold in the US (the Manufacturing Bounce Back), then I do have a major problem with that. Therefore, to be fair, I think the US should impose a duty or tax on US multinational corps that set up manufacturing operations in low-taxed and/or low-waged offshore locations, and then subsequently sell these products back to US customers. This duty or tax, payable to the US government, with a portion of it subsequently shared with US States in some fair manner, should be based on a percentage of the sales price of the products sold to the US customer.

To substantially soften the blow to multinational corps subject to this duty or tax on Manufacturing Bounce Backs, I think I would give them an option of paying for this duty or tax by a like amount of repatriation foreign earnings tax from repatriating foreign earnings.

Second, the 2000s were a lost decade to the US middle class, to those below the middle class, to small and mid-sized purely domestic businesses, and to the country as a whole, with the resultant massive federal deficit increase. When I study who benefited the most from the demise of the US middle class, the US have-nots, and the domestic businesses, I see two main major industries. And these two benefiting industries unfairly placed severe cost pressures on these suffering groups during the decade of the 2000s.

First, there’s the health care industry….all three main parts of it….the health insurance industry, Big Pharma, but just as important and probably even more so, the non-profit hospital industry. The massive rise in health care costs in the 2000s decade put immense financial pressure on both US individuals and on US businesses. Further, in the recently-passed health care legislation, all three of these made out like bandits and hosed the outfoxed US government. The health care cost increases in the 2000s decade will be significantly curtailed with the new health care legislation, but not by nearly as much as they should be. The day will come for these health care industry outsized beneficiaries, but since I’m all health cared out, I’ll pass on them for now. However, Big Pharma would get hit heavily and fairly by my above import tax proposal on Manufacturing Bounce Backs.

But the second and just as significant industry beneficiary is Big Oil. In the 11 years from 1999 to 2009, Exxon Mobil earned worldwide consolidated pretax income of $468 bil and Chevron earned $217 bil, with this total of $685 bil comprising 32% of the total earnings for these 18 huge US multinational corps. But more to the point, Exxon Mobil generated 78% and Chevron 74% of their earnings overseas for that 11 year period. And in the most recent year 2009, it gets even worse, with both Exxon Mobil and Chevron generating 93% of their earnings overseas. Further, in 2009, Exxon Mobil generated 30% of its worldwide revenues in the US, but still only generated 7% of its pretax earnings in the US....there's clearly something out of synch in 2009, partly due to the LIFO Inventory tax loophole in the US, but there's also got to be something unusual going on with the cost allocations between the US and foreign.

Exxon Mobil has paid paltry amounts of US income tax over the years in comparison to its incredibly high profits. When I do the math from its annual report tax footnotes, and add in its very lucrative tax benefits from its executive stock based awards, Exxon Mobil's effective US federal income tax rate paid on its total US pretax profits in the past 11 years is less than 25%....and that's based on severely-deflated LIFO Inventory earnings. At December 31, 2009, the current cost of Exxon Mobil's inventory was an incredible $17.1 bil higher than, or triple, the recorded inventory in its financial statements, much of which was based on oil prices of decades ago. I think the FASB should get its act together and ban unrealistic LIFO Inventory. Pretty much the rest of the world has.

Both of these Big Oil companies are getting massive US tax breaks from tax loopholes like from LIFO Inventory, from Percentage Depletion, and from expensing Intangible Drilling Costs. And other Big Oil companies benefiting from these tax loopholes include foreign-owned companies BP and Royal Dutch Shell, both of which generate a significant portion of their revenues and earnings in the US.....BP generated $84 bil, or 35% of its worldwide revenues, in the US in 2009. I would eliminate these tax breaks for the entire oil industry, for all oil and oil-related companies over a certain size, and scale it in over say a ten-year period. Also, I don't think the oil industry has any business receiving the very lucrative Domestic Production Activity Deduction and I would eliminate its eligibility for all of the oil related industry.

With its severe cost pressure placed on US businesses and US individuals, Big Oil was a major contributor to the lost decade of the 2000s. Thus, I think it is only fair for Big Oil, and for the entire oil related industry for that matter, to now step up to the plate and do its part and pay for some of the tab of these US job-creating Research Tax Credits proposals that could help turn the Bush/Cheney driven 2000s lost decade into an Obama/Biden driven 2010s recovery-from-a-deep-economic-crater decade.

My hunch here is with all of the above substantial funding, there should also be a lot of money left over to reduce the massive US deficit.

And frankly, I think a fair CBO scoring here could well permit my Research Tax Credit proposal for the year 2012 to be made permanent for all subsequent years. Now that would be what I call Increased Business Certainty, the ideal business environment to jump-start job creation.

And further, I think there is enough funding here in the above proposals to also give an additional Research Tax Credit for any US Research that is clearly Green....i.e. whose purpose is to help make the US Energy Independent as quickly as possible. Perhaps call it the Steven Chu Premium Green R&D Tax Credit.

Job Creation Funding #3 Update: Large Corp Deposits on Open IRS Tax Audits

About two months ago, I performed a very quick review of some US large corporation footnotes and from just my very limited review, I found 106 companies that had amounts owed for all open tax audit years in excess of $300 mil each, that in the aggregate totaled $176.8 bil at the most recent year end, which for the majority of these companies was December 31, 2008. This total amount owed for these 106 companies was up 13.4% from the $155.9 bil owed one year earlier. And that 13.4% increase was registered in a year where taxable income of corps was severely hampered by a deep recession.

Projecting that $176.8 bil amount out eleven years using the same 13.4% annual increase of 2008 over 2007, the estimated total tax liability, including accrued interest, at Dec 31, 2019 would be $705 bil.

Now, I am updating and expanding this research. So far, I have found 381 companies that had amounts owed for all open tax audit years of at least $100 mil each, that in the aggregate totaled $269.2 bil, up a substantial 52% from my two month ago estimate. Included in these 381 companies are a handful of foreign companies, with significant US operations.

Most large foreign corps apply International GAAP rather than US FASB GAAP. Thus most foreign corps do not disclose their estimated tax audit exposure amount. I did find two large foreign corps (AstraZeneca and Sanofi-Aventis), which follow International GAAP, but which still disclosed their tax audit exposure amounts. These two foreign corps had $2.9 bil of tax reserves each. Sales to US customers in 2009 was 31% for AstraZeneca and 32% for Sanofi-Aventis.

Projecting that $269.2 bil amount out ten years using the same 13.4% annual increase, the estimated total tax liability, including accrued interest, at Dec 31, 2019, would be an incredibly high $947 bil.

Thus, by using the updated numbers, my best guess is that my 20% tax deposit scheme increases the positive ten-year CBO scoring from the previous range of $120 bil to $140 bil to now a much higher range of $160 bil to $180 bil. And over the second ten-year period, the positive CBO scoring balloons to a range of $403 bil to $453 bil.

My 50% tax deposit scheme increases the positive first ten-year CBO scoring from the previous range of $300 bil to $350 bil to now a much higher range of $400 bil to $450 bil. And over the second ten-year CBO scoring period, the positive CBO scoring goes off the charts to a range of $1.01 trillion to $1.13 trillion....the power of compounding a fairly high annual growth rate over many years.

With these huge potential “pay for” amounts, the US government has a great opportunity to implement some really broad, critically-needed, long-term, private sector Jobs Creation Legislation. And given how large the potential "pay-fors" are here, perhaps even this funding could also be used to solve the Doc Fix on Medicare Fees. And perhaps it might be a lot easier to pass substantial job creation legislation if it is paired with the very popular Medicare Doc Fix.

Let me now focus on why I think the above gigantic $947 bil tax reserve projection in ten years is even substantially understated.

First, the interest growth will be much more pronounced over the next ten years than it has been in the past. The present extremely low interest rates will not continue.

Second, there will be hundreds of companies, which presently have tax reserves below $100 mil, but with these tax reserves growing to above that threshold in the next ten years.

Third, these are just the 381 companies that I found in my quick review. There are many more that I didn’t find.

And fourth, there are thousands of large foreign companies excluded from my tax reserve list, even though they have significant operating activities in the US. Let me explain this in depth.

When I review just the top 50 worldwide profit generators in 2008, the most recent annual rankings by Fortune, only 15 are US corps. Thus, only 15 of these giant corps are included on my US tax reserve list, even though many of the other 35 will be paying much to the US government upon future tax audits.

The highest global earner is Exxon Mobil, with after tax earnings of $45.2 bil. The top six on the top 50 list are all oil companies, and there are many other global oil companies in the top 50. Chevron, another US oil corp, is fourth on the list.

Third on the top 50 list is Royal Dutch Shell, with after tax earnings of $26.3 bil. It makes 22% of its sales to US customers.

Fifth on the top 50 list is BP, with earnings of $21.2 bil. It makes 35% of its sales to US customers.

Neither Shell nor BP are on my tax reserve list of 381 companies.

Other foreign corps on this top 50 earnings list, but not on my list of 381 companies with tax reserves of at least $100 mil are:

• Nestle, with 2008 earnings of $16.7 bil, and with 2009 sales to US customers of 29%
• ArcelorMittal, with earnings of $9.4 bil, and with 2009 sales to US customers of 15%
• Siemens, with earnings of $8.6 bil, and with 2009 sales to US customers of 20%
• GlaxoSmithKline, with earnings of $8.3 bil, and with 2009 sales to US customers of 39% (Also, in 2006, Glaxo paid the US government upon tax audit $3.4 bil to settle a transfer pricing dispute)
• Roche Group, with earnings of $8.3 bil, and with 2009 sales to US customers of 35%
• Novartis, with earnings of $8.2 bil, and with 2009 sales to US customers of 32%
• Barclay’s, with earnings of $8.0 bil, and with US revenues comprising 19% of worldwide revenues
• Unilever, with earnings of $7.4 bil, and with 2009 sales to US customers of 16%
• Volkswagen, with earnings of $7.0 bil, and with 2009 sales to US customers of 11%

Further, there are thousands of huge foreign companies that aren’t in the top 50 global profit list, with very significant US operations, but not on my tax reserve list of 381 companies. Let me just point out two of the numerous such foreign financial institutions.

UBS generated $9 bil of pretax operating profit in the US in 2009, which represented 41% of its worldwide pretax operating profit. And ING generated 15.2 bil of Euros pretax operating income in North America in 2009, which comprised 32% of its worldwide profit. In 2008, ING generated a much higher similar profit in Euros in North America of 25.0 bil, which was 40% of its worldwide 2008 profit.

And here’s just a few of the non-financial global giants not on the top 50 profit list:

• Nintendo, with sales to the Americas of 43%
• Takeda Pharmaceuticals, with sales to US customers of 37%
• Cadbury, with sales to the Americas of 30%, and operating profit to the Americas of 54%
• Alcatel-Lucent, with sales to the Americas of 29%
• British American Tobacco, with sales to the Americas of 22%, and operating profit to the Americas of 27%
• Daimler, with sales to US customers of 21%
• Samsung Electronics, with sales to the Americas of 19%
• Hyundai, with sales to the US of 12%

Thus, my best hunch on what that above $947 bil projected number should be….I’ll stick my neck out and say…..more than $1.5 trillion.

Anyway, here is a listing of the 381 companies, whose income tax footnotes I reviewed, that had estimated tax liabilities, including accrued interest, of at least $100 mil each, for a total of $269.2 bil, owing to all taxing authorities for all open tax audit years at their most recent balance sheet date.

1 Pfizer************************** $9,557 mil
2 JP Morgan Chase**************** $9,008 mil
3 GE***************************** $8,719 mil
4 ATT**************************** $7,523 mil
5 Bank of America***************** $6,353 mil
6 Microsoft*********************** $5,957 mil
7 General Motors****************** $5,822 mil
8 Merck************************** $5,741 mil
9 Wells Fargo********************* $5,692 mil
10 AIG*************************** $5,678 mil
11 Exxon Mobil******************** $5,496 mil
12 IBM*************************** $5,269 mil
13 Morgan Stanley***************** $4,419 mil
14 Entergy************************ $4,098 mil
15 Verizon************************ $3,952 mil
16 Citigroup*********************** $3,449 mil
17 Chevron*********************** $3,427 mil
18 Cisco Systems****************** $3,145 mil
19 Tyco Electronics**************** $2,909 mil
20 AstraZeneca******************** $2,892 mil
21 Sony*************************** $2,884 mil
22 Sanofi-Aventis****************** $2,880 mil
23 Proctor and Gamble************* $2,739 mil
24 JNJ*************************** $2,712 mil
25 Oracle************************* $2,692 mil
26 Dell**************************** $2,300 mil
27 Time Warner******************** $2,226 mil
28 PepsiCo************************ $2,192 mil
29 Abbott Labs******************** $2,172 mil
30 News Corp********************* $2,125 mil
31 Goldman Sachs***************** $2,119 mil
32 Boeing************************ $2,072 mil
33 Hewlett Packard**************** $2,003 mil
34 Energy Future Holdings********* $1,999 mil
35 Covidien********************** $1,844 mil
36 Comcast*********************** $1,704 mil
37 Exelon************************ $1,498 mil
38 ConocoPhillips***************** $1,374 mil
39 Swiss Reinsurance Group******** $1,373 mil
40 Honda Motor****************** $1,365 mil
41 American Express************** $1,363 mil
42 Boston Scientific*************** $1,337 mil
43 Google************************ $1,288 mil
44 Amgen************************ $1,265 mil
45 Apple************************* $1,262 mil
46 Walmart*********************** $1,250 mil
47 Accenture********************* $1,243 mil
48 Starwood Hotel & Resort********* $1,232 mil
49 Ford Motor********************* $1,211 mil
50 Eli Lilly************************ $1,205 mil
51 Credit Suisse******************* $1,194 mil
52 Schlumberger****************** $1,194 mil
53 Public Service Enterprise******** $1,190 mil
54 Johnson Controls*************** $1,117 mil
55 Edison Intl********************* $1,044 mil
56 Kraft************************** $1,039 mil
57 Bristol Myers Squibb*********** $1,022 mil
58 Agilent Technologies************ $971 mil
59 Metlife************************ $971 mil
60 Cardinal Health**************** $958 mil
61 Fannie Mae******************** $952 mil
62 United Technologies************ $935 mil
63 Caterpillar********************* $931 mil
64 Ebay************************** $930 mil
65 Altria Group******************* $928 mil
66 Berkshire Hathaway************ $926 mil
67 Yahoo************************ $908 mil
68 ABB************************** $888 mil
69 Honeywell******************** $870 mil
70 Dupont*********************** $864 mil
71 Disney************************ $828 mil
72 Freddie Mac******************* $805 mil
73 Home Depot******************* $797 mil
74 Mitsubishi UFJ Fincl Group****** $793 mil
75 Illinois Tool Works************* $770 mil
76 Symantec********************* $770 mil
77 Teva Pharmaceuticals********** $726 mil
78 Dow Chemical***************** $718 mil
79 Sara Lee********************** $713 mil
80 Pitney Bowes****************** $702 mil
81 AXA Fincl Group*************** $700 mil
82 Kroger************************ $694 mil
83 PG&E Corp******************** $684 mil
84 3M*************************** $671 mil
85 Duke Energy******************* $664 mil
86 NRG Energy******************* $660 mil
87 Transocean******************** $660 mil
88 Rovi************************** $658 mil
89 Vale************************** $657 mil
90 General Mills****************** $642 mil
91 HCA************************** $641 mil
92 McKesson********************* $627 mil
93 Avis Budget******************** $622 mil
94 Ingersoll-Rand***************** $605 mil
95 DIRECTV Group**************** $599 mil
96 Raytheon********************** $592 mil
97 Kimberly Clark***************** $588 mil
98 Valero Energy****************** $584 mil
99 Target************************* $579 mil
100 Southern Calif Edison********** $561 mil
101 Computer Sciences************ $552 mil
102 Medtronic******************** $545 mil
103 Fortune Brands**************** $543 mil
104 Dr Pepper Snapple Group******* $534 mil
105 Western Union**************** $523 mil
106 Monsanto********************* $513 mil
107 AES************************** $511 mil
108 McDonalds******************** $511 mil
109 Motorola********************** $506 mil
110 Baxter Intl********************* $499 mil
111 CNH Global******************** $493 mil
112 US Bancorp******************** $493 mil
113 First Data********************** $485 mil
114 Toyota Motor****************** $476 mil
115 Celgene************************ $463 mil
116 IAC/Interactive**************** $463 mil
117 Visa*************************** $461 mil
118 Capital One Financial************ $460 mil
119 Praxair************************ $449 mil
120 Coca Cola********************** $448 mil
121 Danaher*********************** $439 mil
122 Liberty Global****************** $436 mil
123 Federal-Mogul***************** $432 mil
124 Northrop Grumman************ $429 mil
125 State Street Corp*************** $424 mil
126 Lincoln National*************** $422 mil
127 PNC Fincl Svcs***************** $421 mil
128 Best Buy********************** $419 mil
129 Harrah's Entertainment********* $416 mil
130 Bank of NY Mellon************* $415 mil
131 Broadcom********************* $413 mil
132 Textron*********************** $408 mil
133 Pulte Homes******************* $407 mil
134 Cadence Design Systems********* $405 mil
135 Intl Paper********************** $403 mil
136 SAP*************************** $394 mil
137 Sears************************** $381 mil
138 MeadWestvaco***************** $380 mil
139 Viacom************************ $378 mil
140 Applied Materials************** $371 mil
141 BearingPoint******************* $364 mil
142 United Parcel Service*********** $360 mil
143 NCR*************************** $356 mil
144 Stryker************************ $352 mil
145 TD Ameritrade***************** $350 mil
146 Adecco************************ $348 mil
147 Discover Fincl Svcs************* $345 mil
148 GMAC************************* $342 mil
149 Yum Brands******************** $342 mil
150 Flextronics********************* $340 mil
151 Baker Hughes******************* $339 mil
152 Century Tel******************** $337 mil
153 Constellation Energy*********** $336 mil
154 Republic Services************** $336 mil
155 Electronic Arts**************** $334 mil
156 Tyco International************* $334 mil
157 Black Rock******************** $333 mil
158 Sprint Nextel****************** $333 mil
159 Carefusion********************* $330 mil
160 Estee Lauder****************** $327 mil
161 Prudential Financial************ $326 mil
162 Rite Aid*********************** $326 mil
163 Eastman Kodak**************** $325 mil
164 Dover************************* $324 mil
165 Nike************************** $324 mil
166 Pall Corp********************** $316 mil
167 El Paso************************ $312 mil
168 Computer Associates*********** $311 mil
169 CC Media Holdings************* $308 mil
170 Deere & Co******************** $307 mil
171 Tyson Foods******************* $304 mil
172 CBS*************************** $298 mil
173 Genworth Financial************* $296 mil
174 Black & Decker***************** $292 mil
175 Halliburton******************** $292 mil
176 Qwest Communications********* $292 mil
177 Altera************************ $291 mil
178 Dominion Resources************ $291 mil
179 Marriott*********************** $291 mil
180 Amerada Hess****************** $288 mil
181 Freeport-McMoRan Copper****** $287 mil
182 Goodrich*********************** $287 mil
183 Macy's************************* $285 mil
184 Staples************************* $283 mil
185 FPL Group********************* $279 mil
186 Garmin************************ $276 mil
187 Graham Packaging************** $276 mil
188 Intel*************************** $275 mil
189 HSBC Finance******************* $274 mil
190 Devon Energy****************** $272 mil
191 Mylan Labs******************** $269 mil
192 Gannett*********************** $266 mil
193 Forest Labs******************** $265 mil
194 United Health Group*********** $264 mil
195 Pepco Holdings**************** $259 mil
196 Dish Network Corp************* $256 mil
197 American Electric Power******** $255 mil
198 Reinsurance Group America***** $255 mil
199 Celanese*********************** $253 mil
200 Fluor************************** $249 mil
201 PPL**************************** $248 mil
202 Mattel************************* $245 mil
203 TJX**************************** $243 mil
204 L-3 Communications************* $242 mil
205 Chesapeake Energy************** $241 mil
206 Eaton************************** $240 mil
207 Mosaic************************* $240 mil
208 Liberty Capital Group*********** $238 mil
209 Liberty Media****************** $238 mil
210 Marsh & McLennan************** $238 mil
211 Adobe************************** $235 mil
212 Atmel************************** $230 mil
213 Sysco************************** $230 mil
214 R R Donnelly & Sons************* $228 mil
215 Cigna*************************** $227 mil
216 EMC**************************** $227 mil
217 Domtar************************* $226 mil
218 PMI**************************** $222 mil
219 Atlas Air WW Holdings*********** $220 mil
220 Southern Co******************* $220 mil
221 Omnicom********************** $219 mil
222 Lockheed Martin*************** $217 mil
223 BB&T************************** $215 mil
224 Expedia************************ $215 mil
225 Visteon************************ $215 mil
226 First Energy******************* $212 mil
227 Colgate Palmolive************* $211 mil
228 Toll Bros********************** $211 mil
229 Pinnacle West Capital********** $209 mil
230 Juniper Networks************** $208 mil
231 LSI*************************** $206 mil
232 Avery Dennison**************** $205 mil
233 Advanced Micro Devices******* $201 mil
234 TRW Automotive Holdings***** $201 mil
235 Sun Trust Banks*************** $200 mil
236 Amazon.com****************** $198 mil
237 Lam Research***************** $197 mil
238 Progress Energy************** $196 mil
239 Air Products & Chemicals****** $195 mil
240 ITT************************** $194 mil
241 Office Depot******************* $194 mil
242 ST Microelectronic************ $193 mil
243 Emerson Electric************* $192 mil
244 Moodys********************** $192 mil
245 Newell Rubbermaid*********** $192 mil
246 Weyerhaeuser***************** $192 mil
247 Travelers********************* $191 mil
248 Center Point Energy************ $190 mil
249 Burlington Northern Sante Fe**** $189 mil
250 Whirlpool********************* $189 mil
251 Owens Corning***************** $186 mil
252 MGM Mirage******************* $185 mil
253 Supervalu********************** $181 mil
254 Autodesk********************** $180 mil
255 Biogen Idec******************** $180 mil
256 San Disk*********************** $180 mil
257 Zimmer Holdings************** $179 mil
258 Levi Strauss******************* $178 mil
259 Ace Limited******************** $175 mil
260 Brocade Communication Sys***** $175 mil
261 Sun Microsystems*************** $172 mil
262 Canon************************* $170 mil
263 Cleco************************** $170 mil
264 Lowe's************************* $169 mil
265 H&R Block********************* $167 mil
266 JC Penney********************* $167 mil
267 Terex************************* $167 mil
268 Unum Group******************* $167 mil
269 MasterCard******************** $165 mil
270 Williams Cos****************** $165 mil
271 Coach************************* $164 mil
272 Limited Brands**************** $164 mil
273 Ashland*********************** $163 mil
274 National Semiconductor******** $162 mil
275 Kellogg*********************** $161 mil
276 Xerox************************* $161 mil
277 Maxim Integrated Products***** $159 mil
278 Northeast Utilities************** $159 mil
279 Genentech********************* $158 mil
280 Imperial Oil******************** $158 mil
281 Tata Communications*********** $158 mil
282 Checkpoint Software************ $157 mil
283 Flowserve********************** $156 mil
284 Polo Ralph Lauren************** $155 mil
285 Solutia************************* $155 mil
286 Constellation Brands************ $154 mil
287 Mohawk Industries************** $154 mil
288 Navistar Intl******************** $153 mil
289 Safeway************************ $153 mil
290 Gap*************************** $152 mil
291 Bunge, Ltd********************* $151 mil
292 Interpublic Group************** $151 mil
293 Owens Illinois****************** $151 mil
294 St Jude Medical**************** $149 mil
295 Wynn Resorts****************** $148 mil
296 Activision Blizzard************* $147 mil
297 Apache*********************** $147 mil
298 Dun & Bradstreet*************** $147 mil
299 Reynolds American************ $147 mil
300 Toys R Us********************* $146 mil
301 W R Grace********************* $146 mil
302 Walgreen's********************* $146 mil
303 Nucor************************* $144 mil
304 Rockwell Automation*********** $144 mil
305 Wellpoint********************** $144 mil
306 Ameren************************ $143 mil
307 Newmont Mining**************** $143 mil
308 SPX**************************** $143 mil
309 Parker Hannifin***************** $142 mil
310 Research in Motion************* $142 mil
311 BMC Software****************** $141 mil
312 Avon Products***************** $139 mil
313 Dole Food********************** $138 mil
314 Avnet************************* $136 mil
315 Coventry Health Care*********** $136 mil
316 Western Digital***************** $136 mil
317 Teleflex*********************** $135 mil
318 Infosys Technologies*********** $134 mil
319 Seagate Technology************ $134 mil
320 Marvell Technology************ $133 mil
321 Quest Diagnostics************** $133 mil
322 Life Technologies************** $132 mil
323 WIPRO*********************** $132 mil
324 Allegheny Energy************** $131 mil
325 Ecolab*********************** $129 mil
326 Goodyear Tire & Rubber******* $129 mil
327 Armstrong World Industries*** $128 mil
328 Monster Worldwide*********** $126 mil
329 Magellan Health Services****** $125 mil
330 Automatic Data Processing**** $122 mil
331 ArvinMeritor***************** $121 mil
332 Nvidia*********************** $121 mil
333 PPG Industries*************** $121 mil
334 Loral Space & Commun******** $120 mil
335 Xilinx*********************** $120 mil
336 Anheuser-Busch************** $119 mil
337 Peabody Energy************** $119 mil
338 Ricoh************************ $119 mil
339 Mizuho Financial Group******* $118 mil
340 NISource******************** $118 mil
341 Northern Trust*************** $117 mil
342 Hasbro********************** $116 mil
343 Noble Corp******************* $116 mil
344 Bed Bath & Beyond************ $115 mil
345 Calpine*********************** $115 mil
346 Canadian Pacific Railway******* $115 mil
347 Clorox************************ $115 mil
348 Intl Game Technology********** $114 mil
349 Kohl's************************** $114 mil
350 Kyocera************************ $114 mil
351 Cintas************************** $111 mil
352 Lennar************************* $111 mil
353 Medco Health Solutions********** $111 mil
354 SLM**************************** $111 mil
355 Heinz*************************** $110 mil
356 NetApp************************* $110 mil
357 Temple-Inland****************** $110 mil
358 US Steel*********************** $110 mil
359 Logitech*********************** $109 mil
360 McAfee************************ $109 mil
361 New Page Holdings************* $109 mil
362 Rohm & Haas****************** $109 mil
363 Apollo Group****************** $108 mil
364 Alliant Energy***************** $107 mil
365 Gilead Sciences*************** $107 mil
366 Nabors Industries************* $107 mil
367 Rockwell Collins*************** $107 mil
368 Norfolk Southern************** $106 mil
369 YRC Worldwide*************** $106 mil
370 Harley Davidson*************** $105 mil
371 ABM Industries**************** $103 mil
372 Amdox Limited**************** $103 mil
373 American Tower*************** $103 mil
374 Delphi************************* $103 mil
375 Tenneco*********************** $103 mil
376 Iron Mountain***************** $101 mil
377 Aon*************************** $100 mil
378 Costco************************* $100 mil
379 NII Holdings******************** $100 mil
380 ProLogis*********************** $100 mil
381 Sempra Energy***************** $100 mil
Total************************** $269,192 mil

President Obama's Health Care Plan: A Well-Crafted Stroke of Genius

I think President Obama’s Health Care Plan is very well designed and by far the pinnacle point of his Presidency.

Everyone will quibble with certain parts of it, but I really liked every one of the many changes that he made.

I would have liked to see the hospitals pony up more money, but after the very bright and savvy Kathleen Sebelius sees the windfall profits and/or frivolous spending increases reported by many of the hospitals start trickling in, I trust that she’ll take the proper actions to further reduce health care costs.

Job Creation Funding #2 Update: Pecking Order of Foreign Earnings Repatriation Tax Tranches

With the December 2009 year-end, US public companies with calendar years ends, just very recently filed their 10-Ks with the SEC. Thus, let me update the very key unremitted foreign earnings disclosure of US multinational corps.

In my quick review here, I found 606 US multinational corps so far with unremitted foreign earnings in excess of $50 mil each, for a total of a monstrous $1.263 trillion.

And I reviewed many more than 400 additional US multinational corp footnotes so far where there were significant, and in many cases very substantial, foreign earnings, but where the corp decided to not disclose the amount of its key unremitted foreign earnings. I have to ask...Whatever happened to financial transparency? And just where is the SEC here?

Also, I only reviewed public company footnotes and there certainly will be many private companies with unremitted foreign earnings.

Thus, my hunch is that in total, there are much more than 1,000 US multinational corps with unremitted foreign earnings of more than $50 mil each, which would total more than $1.6 trillion of unremitted foreign earnings as of Dec 31, 2009. This is much higher than my previous estimate of more than $1.1 trillion. And those more than 1,000 don't even include the many hundreds of public multinational corps reporting unremitted foreign earnings of less than $50 mil.

When I do the mathematics using the past 16.4% annual growth of this key unremitted foreign earnings number, if nothing changes, these $1.6 trillion of unremitted foreign earnings will grow to more than $4.6 trillion by the end of President Obama's second presidential term.

This US multinational corp meteoric overseas expansion is probably the main cause of the sky high US unemployment and US underemployment rates, and if President Obama's economic team continues to ignore it, I think the US unemployment and US underemployment rates will not decline much from where they are now through the end of the President's second term.

With none of this $4.6 trillion of unremitted foreign earnings used for wise US job creation, for US R&D, and for US capital expenditures, the Dow will be at 20,000, the NASDAQ will be north of 5,000, and the Non-profit hospitals will have investment treasure chests much above $1 trillion, but the US National Debt will hit nosebleed levels and the US middle class will be substantially depleted. I don't think that is much of an economic legacy....It's great for the haves, but not much for the country as a whole or for the substantially increased number of have-nots.

At the end of President Obama's second term, I would much prefer to see a Dow at 18,000, an unemployment rate of 5% and a modest underemployed rate, rather than a Dow at 20,000, an unemployment rate of 9% and also very high underemployed numbers. The former makes for a substantially lower National Debt, a much more robust middle class and also fairly spreads the economic benefits over the entire US population.

Now there is no rightful place for international tax evasion like corporate inversions, the use of international tax havens like Bermuda and the Cayman Islands, and the use of Controlled Foreign Corps in places like Puerto Rico, but you just can't blame a US multinational corp for factoring in the legitimate lower international tax rates in making its business placement decisions.

From reviewing these thousands of income tax footnotes, the number of countries granting tax holidays to US multinational corps is growing like weeds. Here are a few of the many countries I found that were granting US multinational corps substantial tax holidays:

China
India
Taiwan
Singapore
Ireland
Costa Rica
Switzerland
Dominican Republic
The Philippines
Thailand
Malaysia
Israel
Vietnam
The Netherlands
Turkey
Uruguay
Argentina
Brazil

Clearly, the US government is way behind the curve here. I think US citizens can fairly fault the US government for not attempting to be more competitive with the widespread and growing legitimate lower international tax rates, particularly if the result is so many of its US citizens are placed on the employment sidelines or are underemployed.

With so many multinationals with such huge unremitted foreign earnings numbers, I think it would be very beneficial to the very troubled US economy if many of these multinational corps can be tax incentivized, in a very measured way, to repatriate some of their foreign earnings, and for them to invest the resultant cash proceeds in new US job creation, in US R&D, and in US capital expenditures. I think it is high time for some serious backshoring.

Here is a listing of the 606 US multinational corps with unremitted foreign earnings of $50 mil or more, as disclosed in their most recent 10-K:

.................................. Amount
................................... in bils

1 GE………………………. $84.0 bil
2 Pfizer………………….. $42.5 bil
3 Exxon Mobil………… $42.0 bil
4 JNJ…………………….. $32.2 bil
5 Merck…………………. $31.2 bil
6 Citigroup……………… $27.3 bil
7 IBM…………………….. $26.0 bil
8 Procter & Gamble…… $25.0 bil
9 Cisco……………………. $24.1 bil
10 PepsiCo………………. $21.9 bil
11 Abbott Labs…………. $20.6 bil
12 Chevron……………….. $20.5 bil
13 Coca Cola……………… $19.0 bil
14 Microsoft………………. $18.0 bil
15 Schlumberger…………. $18.0 bil
16 Bank of America……… $16.7 bil
17 Bristol Myers Squibb.. $16.5 bil
18 Hewlett Packard………. $16.5 bil
19 Goldman Sachs………. $16.2 bil
20 JP Morgan Chase……. $15.7 bil
21 Eli Lilly………………….. $15.5 bil
22 Apache………………… $15.3 bil
23 Amgen…………………. $14.3 bil
24 PMI…………………….. $14.0 bil
25 Tyco Electronics…… $14.0 bil
26 Oracle…………………. $13.7 bil
27 WalMart……………….. $13.7 bil
28 Google…………………. $12.3 bil
29 Dell…………………….. $11.3 bil
30 DuPont………………… $11.3 bil
31 Intel…………………….. $10.1 bil
32 Medtronic……………… $9.7 bil
33 Boston Scientific…….. $9.4 bil
34 McDonald's……………. $9.2 bil
35 Caterpillar……………… $9.0 bil
36 Dow Chemical………… $8.7 bil
37 Qualcomm…………….. $8.6 bil
38 Alcoa…………………… $8.1 bil
39 Xerox………………….. $8.0 bil
40 Ebay……………………. $7.9 bil
41 Corning………………… $7.3 bil
42 Baxter………………….. $6.8 bil
43 American Express….. $6.6 bil
44 Danaher……………….. $6.5 bil
45 General Motors………. $6.3 bil
46 Archer Daniels Midland $6.0 bil
47 Ingersoll-Rand………… $6.0 bil
48 Kimberly Clark………… $5.8 bil
49 Illinois Tool Works…… $5.7 bil
50 Kraft……………………… $5.7 bil
51 3M………………………… $5.6 bil
52 Occidental Petroleum.. $5.5 bil
53 News Corp……………. $5.3 bil
54 Praxair…………………. $5.3 bil
55 Apple………………….. $5.1 bil
56 Honeywell…………….. $5.1 bil
57 Eaton………………….. $4.9 bil
58 EMC……………………. $4.3 bil
59 Emerson Electric……. $4.3 bil
60 Bunge, Ltd…………….. $4.2 bil
61 Valero Energy………… $4.1 bil
62 Morgan Stanley………. $4.0 bil
63 Murphy Oil…………….. $4.0 bil
64 Berkshire Hathaway… $3.8 bil
65 Johnson Controls…….. $3.8 bil
66 International Paper….. $3.5 bil
67 Mattel……………………. $3.5 bil
68 Amerada Hess………… $3.4 bil
69 Cardinal Health……….. $3.4 bil
70 Forest Labs…………….. $3.4 bil
71 Franklin Resources….. $3.4 bil
72 Monsanto……………….. $3.4 bil
73 Heinz…………………….. $3.3 bil
74 Gilead Sciences………. $3.2 bil
75 Stryker………………….. $3.2 bil
76 Thermo Fisher Scientific $3.2 bil
77 Marsh & McLennan….. $3.1 bil
78 Paccar……………………. $3.1 bil
79 Texas Instruments……. $3.1 bil
80 Agilent Technologies…. $3.0 bil
81 Air Products&Chemicals $3.0 bil
82 CBS………………………… $3.0 bil
83 EOG Resources………… $3.0 bil
84 Colgate Palmolive…….. $2.9 bil
85 GMAC………………….. $2.9 bil
86 US Steel…………………. $2.9 bil
87 Celanese…………………. $2.8 bil
88 Celgene………………….. $2.8 bil
89 Goodyear Tire&Rubber. $2.8 bil
90 National Oilwell Varco.. $2.8 bil
91 Becton Dickinson…….. $2.6 bil
92 Ensco International…… $2.6 bil
93 Nike……………………….. $2.6 bil
94 Mosaic……………………. $2.5 bil
95 TRW Automotive Hldgs. $2.5 bil
96 Western Digital……….. $2.5 bil
97 Dole Food Co………….. $2.4 bil
98 Motorola………………. $2.4 bil
99 Overseas Shiphldg Grp $2.4 bil
100 Whirlpool………………. $2.4 bil
101 Baker Hughes………… $2.3 bil
102 Allergan……………….. $2.2 bil
103 Avon Products……….. $2.2 bil
104 Biogen Idec…………… $2.2 bil
105 Carefusion……………. $2.2 bil
106 United Parcel Service… $2.2 bil
107 AGCO…………………… $2.1 bil
108 Aon…………………….. $2.1 bil
109 Black & Decker……….. $2.1 bil
110 ConcoPhillips………….. $2.1 bil
111 General Mills………….. $2.1 bil
112 PPG Industries………… $2.0 bil
113 Pride International….. $2.0 bil
114 Western Union……….. $2.0 bil
115 Yahoo………………….. $2.0 bil
116 Analog Devices………. $1.9 bil
117 Autoliv………………….. $1.9 bil
118 Bank of NY Mellon……. $1.9 bil
119 Marathon Oil…………… $1.9 bil
120 Eastman Kodak………. $1.8 bil
121 McKesson…………….. $1.8 bil
122 MeadWesstvaco……… $1.8 bil
123 Owens Illinois………… $1.8 bil
124 Southern Copper…….. $1.8 bil
125 Transocean……………. $1.8 bil
126 Zimmer Holdings……… $1.8 bil
127 Cameron International… $1.7 bil
128 Chiquita Brands………. $1.7 bil
129 ITT……………………….. $1.7 bil
130 Prudential Financial…… $1.7 bil
131 Safeway………………… $1.7 bil
132 Vishay Intertechnology. $1.7 bil
133 Borg Warner…………… $1.6 bil
134 Costco…………………… $1.6 bil
135 Ingram Micro………….. $1.6 bil
136 Interpublic Group…….. $1.6 bil
137 SPX……………………….. $1.6 bil
138 Time Warner…………… $1.6 bil
139 Accenture…………….. $1.5 bil
140 Adobe…………………. $1.5 bil
141 Avnet………………….. $1.5 bil
142 Cognizant Tech Sols…. $1.5 bil
143 Noble Corp…………….. $1.5 bil
144 Sempra Energy………. $1.5 bil
145 Symantec……………… $1.5 bil
146 Arrow Electronics……. $1.4 bil
147 Genworth Financial….. $1.4 bil
148 Peabody Energy……… $1.4 bil
149 Pepsi Bottling…………. $1.4 bil
150 Rockwell Automation… $1.4 bil
151 St Jude Medical………. $1.4 bil
152 Waters Corp………….. $1.4 bil
153 Wells Fargo…………… $1.4 bil
154 CIT Group……………… $1.3 bil
155 Computer Associates… $1.3 bil
156 Computer Sciences….. $1.3 bil
157 CR Bard……………….. $1.3 bil
158 Deere………………….. $1.3 bil
159 Ford……………………. $1.3 bil
160 Herbalife………………. $1.3 bil
161 IMS Health…………….. $1.3 bil
162 Kellogg………………… $1.3 bil
163 Lexmark……………….. $1.3 bil
164 Mastercard……………. $1.3 bil
165 Parker Hannifin……….. $1.3 bil
166 Avery Dennison……… $1.2 bil
167 General Dynamics……. $1.2 bil
168 Lear……………………… $1.2 bil
169 Noble Energy………….. $1.2 bil
170 State Street Corp……… $1.2 bil
171 Tidewater……………… $1.2 bil
172 Viacom………………… $1.2 bil
173 Electronic Arts……….. $1.1 bil
174 Gap……………………. $1.1 bil
175 Microchip Technology.. $1.1 bil
176 Molson Coors Brewing $1.1 bil
177 Office Depot………….. $1.1 bil
178 Verizon Commun……… $1.1 bil
179 Best Buy………………. $1.0 bil
180 Estee Lauder…………. $1.0 bil
181 First Solar……………… $1.0 bil
182 Hospira………………… $1.0 bil
183 Intl Flavors & Frags…… $1.0 bil
184 Invesco……………….. $1.0 bil
185 Lubrizol………………… $1.0 bil
186 Altera………………….. $0.9 bil
187 Amazon.com………….. $0.9 bil
188 Autodesk……………… $0.9 bil
189 BJ Services…………… $0.9 bil
190 Citrix Systems………… $0.9 bil
191 Corn Products Intl…….. $0.9 bil
192 Duke Energy………….. $0.9 bil
193 Hasbro………………… $0.9 bil
194 Juniper Networks…….. $0.9 bil
195 Las Vegas Sands……. $0.9 bil
196 Marriott………………… $0.9 bil
197 Molex………………….. $0.9 bil
198 NCR……………………. $0.9 bil
199 NetApp………………… $0.9 bil
200 Rockwood Holdings….. $0.9 bil
201 Stanley Works………… $0.9 bil
202 Terex………………….. $0.9 bil
203 Unisys…………………. $0.9 bil
204 Yum Brands…………… $0.9 bil
205 Automatic Data Proc…. $0.8 bil
206 Black Rock…………….. $0.8 bil
207 Bruker…………………. $0.8 bil
208 CB Richard Ellis Group $0.8 bil
209 Coca Cola Enterprises.. $0.8 bil
210 Ecolab…………………. $0.8 bil
211 Energizer Holdings…… $0.8 bil
212 Harsco………………… $0.8 bil
213 Kinetic Concepts……… $0.8 bil
214 Lam Research………… $0.8 bil
215 MEMC Electronic Matls.. $0.8 bil
216 Nvidia………………….. $0.8 bil
217 Owens Corning………. $0.8 bil
218 Pall Corp………………. $0.8 bil
219 Pitney Bowes…………. $0.8 bil
220 Polo Ralph Lauren……. $0.8 bil
221 Rohm & Haas…………. $0.8 bil
222 Starwood Hotels & Res $0.8 bil
223 V. F. Corp……………… $0.8 bil
224 Warner Chilcott……….. $0.8 bil
225 Advanced Micro Device $0.7 bil
226 Aptar Group…………… $0.7 bil
227 Beckman Coulter……… $0.7 bil
228 Cabot………………….. $0.7 bil
229 Dover………………….. $0.7 bil
230 FMC Technologies……. $0.7 bil
231 FMC……………………. $0.7 bil
232 General Cable………… $0.7 bil
233 Jarden…………………. $0.7 bil
234 Manitowoc…………….. $0.7 bil
235 Manpower…………….. $0.7 bil
236 Mohawk Industries…… $0.7 bil
237 ON Semiconductor…… $0.7 bil
238 PPL…………………….. $0.7 bil
239 Precision Castparts…… $0.7 bil
240 RPM International……… $0.7 bil
241 Seaboard……………… $0.7 bil
242 Valhi…………………… $0.7 bil
243 W R Grace……………. $0.7 bil
244 Warner Music Group…. $0.7 bil
245 Xilinx…………………… $0.7 bil
246 Chicago Bridge & Iron… $0.6 bil
247 CNA Financial…………. $0.6 bil
248 CommScope…………… $0.6 bil
249 Edwards Lifesciences $0.6 bil
250 Exterran Holdings…….. $0.6 bil
251 Federal Mogul…………. $0.6 bil
252 Fortune Brands……….. $0.6 bil
253 Goodrich………………. $0.6 bil
254 Intercontinental Exchge $0.6 bil
255 McAfee………………… $0.6 bil
256 McCormick & Co………. $0.6 bil
257 Newell Rubbermaid…… $0.6 bil
258 Northrop Grumman…… $0.6 bil
259 PerkinElmer……………. $0.6 bil
260 PPL…………………….. $0.6 bil
261 ResMed……………….. $0.6 bil
262 Sigma Aldrich…………. $0.6 bil
263 Staples………………… $0.6 bil
264 Teleflex……………….. $0.6 bil
265 Tellabs…………………. $0.6 bil
266 Tenneco………………. $0.6 bil
267 The Cooper Cos………. $0.6 bil
268 Thomas & Betts………. $0.6 bil
269 Tupperware Brands…. $0.6 bil
270 USG……………………. $0.6 bil
271 Varian Medical Systems $0.6 bil
272 Varian…………………. $0.6 bil
273 VM Ware………………. $0.6 bil
274 Waste Management….. $0.6 bil
275 Activision Blizzard……. $0.5 bil
276 ArvinMentor…………… $0.5 bil
277 Ashland……………….. $0.5 bil
278 Atwood Oceanics……. $0.5 bil
279 AXA Fincl Group……… $0.5 bil
280 Barnes Group………… $0.5 bil
281 Bucyrus International…….. $0.5 bil
282 Campbell Soup………… $0.5 bil
283 Chemtura……………… $0.5 bil
284 Cliffs Natural Res…….. $0.5 bil
285 Covance………………. $0.5 bil
286 Dentsply International…… $0.5 bil
287 Donaldson…………….. $0.5 bil
288 Dun & Bradstreet……… $0.5 bil
289 Home Depot…………… $0.5 bil
290 Jabil Circuit……………. $0.5 bil
291 Liberty Global…………. $0.5 bil
292 Loew's Corp………….. $0.5 bil
293 McDermott Intl…………. $0.5 bil
294 MICROS System………. $0.5 bil
295 Millipore……………….. $0.5 bil
296 Moodys………………… $0.5 bil
297 Northern Trust………… $0.5 bil
298 Oil States International.. $0.5 bil
299 Penske Automotive Grp $0.5 bil
300 Priceline com………….. $0.5 bil
301 Reynolds American…… $0.5 bil
302 Roper Industries……… $0.5 bil
303 Spectrum Brands…….. $0.5 bil
304 Starbucks……………… $0.5 bil
305 Timken…………………. $0.5 bil
306 WABCO Holdings…….. $0.5 bil
307 West Pharmaceutical… $0.5 bil
308 World Fuel Services….. $0.5 bil
309 Ametek………………… $0.4 bil
310 Anixter International….. $0.4 bil
311 Applied Materials……… $0.4 bil
312 Avis Budget Group…… $0.4 bil
313 BearingPoint…………… $0.4 bil
314 Benchmark Electronics. $0.4 bil
315 Bio-Rad Laboratories… $0.4 bil
316 Brady………………….. $0.4 bil
317 Brinks………………….. $0.4 bil
318 Coach………………….. $0.4 bil
319 Commercial Metals……. $0.4 bil
320 Cytec Industries………. $0.4 bil
321 El Paso Corp…………… $0.4 bil
322 GameStop……………… $0.4 bil
323 Genpact……………….. $0.4 bil
324 Guess $0.4 bil
325 H B Fuller………………. $0.4 bil
326 Joy Global……………… $0.4 bil
327 McGraw-Hill…………… $0.4 bil
328 Micron Technology…… $0.4 bil
329 Modine Manufacturing.. $0.4 bil
330 Moog…………………… $0.4 bil
331 Nalco Holding…………. $0.4 bil
332 Navistar International… $0.4 bil
333 Reinsurance Grp Amer $0.4 bil
334 Rofin-Sinar Technology $0.4 bil
335 Ryder System………… $0.4 bil
336 sohu.com……………… $0.4 bil
337 Synopsys……………… $0.4 bil
338 Teradata………………. $0.4 bil
339 Travelers……………… $0.4 bil
340 Wynn Resorts………… $0.4 bil
341 A O Smith……………… $0.3 bil
342 A Schulman…………… $0.3 bil
343 Actuant……………….. $0.3 bil
344 AECOM Technology….. $0.3 bil
345 Affiliated Computer Svc $0.3 bil
346 Albany Intl……………… $0.3 bil
347 Alberto-Culver………… $0.3 bil
348 Amkor Technology…… $0.3 bil
349 Brocade Comm Systs… $0.3 bil
350 Charles River Labs…… $0.3 bil
351 Convergys……………. $0.3 bil
352 Delphi………………….. $0.3 bil
353 DirecTV Group………… $0.3 bil
354 Eastman Chemical……. $0.3 bil
355 Fairchild Semicondr….. $0.3 bil
356 Fidelity Natl Info Svcs… $0.3 bil
357 Flir Systems…………… $0.3 bil
358 Foster Wheeler……….. $0.3 bil
359 Gardner Denver………. $0.3 bil
360 Harris Corp……………. $0.3 bil
361 Hubbell………………… $0.3 bil
362 Huntsman Group……… $0.3 bil
363 Integrated Device Tech $0.3 bil
364 Linear Technology……. $0.3 bil
365 Mentor Graphics……… $0.3 bil
366 MKS Instruments……… $0.3 bil
367 National Instruments….. $0.3 bil
368 Nordson……………….. $0.3 bil
369 Orthofix Intl……………. $0.3 bil
370 Plantronics……………. $0.3 bil
371 Sensient Technologies $0.3 bil
372 Smith International……. $0.3 bil
373 Snap-On………………. $0.3 bil
374 Sonoco Products……… $0.3 bil
375 Sotheby's……………… $0.3 bil
376 Sungard Data Systems $0.3 bil
377 Sykes Enterprises……. $0.3 bil
378 Textron………………… $0.3 bil
379 Valeant Pharma………. $0.3 bil
380 Valspar………………… $0.3 bil
381 Visa……………………. $0.3 bil
382 Warnaco Group………. $0.3 bil
383 Watson Wyatt………… $0.3 bil
384 Watts Water Technol… $0.3 bil
385 Wyndham Worldwide… $0.3 bil
386 Anheuser-Busch $0.2 bil
387 Arch Chemicals $0.2 bil
388 BE Aerospace $0.2 bil
389 Bemis $0.2 bil
390 Blount Intl $0.2 bil
391 BMC Software $0.2 bil
392 Bristow Group $0.2 bil
393 Broadcom $0.2 bil
394 Brown-Forman $0.2 bil
395 Capital One Financial $0.2 bil
396 Carlisle $0.2 bil
397 Cinemark Holdings $0.2 bil
398 Cintas $0.2 bil
399 CIRCOR Intl $0.2 bil
400 Columbia Sportswear $0.2 bil
401 Compass Minerals $0.2 bil
402 Crane $0.2 bil
403 CROCs $0.2 bil
404 Crown Holdings $0.2 bil
405 Cypress Semiconductor $0.2 bil
406 Devry $0.2 bil
407 Diodes $0.2 bil
408 Dresser-Rand Group $0.2 bil
409 EnerSys $0.2 bil
410 EnPro Industries $0.2 bil
411 Federal Express $0.2 bil
412 Fossil $0.2 bil
413 Garmin $0.2 bil
414 Henry Schein $0.2 bil
415 Hercules $0.2 bil
416 Hexion Specialty Chemicals $0.2 bil
417 IDEXX Labs $0.2 bil
418 Inter Parfums $0.2 bil
419 Interactive Data $0.2 bil
420 Interface $0.2 bil
421 Inverness Med Inov $0.2 bil
422 John Wiley & Sons $0.2 bil
423 King Pharmaceuticals $0.2 bil
424 KLA Tencor $0.2 bil
425 Leggett & Platt $0.2 bil
426 Life Technologies $0.2 bil
427 Lowe's $0.2 bil
428 Mine Safety Appliances $0.2 bil
429 Minerals Technologies $0.2 bil
430 Nacco Industries $0.2 bil
431 Novell $0.2 bil
432 OM Group $0.2 bil
433 OmniVision $0.2 bil
434 Oshkosh $0.2 bil
435 Parametric Technology $0.2 bil
436 Parexel Intl $0.2 bil
437 Pentair $0.2 bil
438 Perot Systems $0.2 bil
439 Perrigo $0.2 bil
440 Pharmaceutical Prod Dev $0.2 bil
441 Plexus $0.2 bil
442 Polycom $0.2 bil
443 Polyone $0.2 bil
444 Quest Software $0.2 bil
445 Rockwell Collins $0.2 bil
446 Seacor Holdings $0.2 bil
447 Semtech $0.2 bil
448 Service Corp International $0.2 bil
449 Silicon Laboratories $0.2 bil
450 Solera Holdings $0.2 bil
451 Spansion $0.2 bil
452 Spectra Energy $0.2 bil
453 Steelcase $0.2 bil
454 SunPower $0.2 bil
455 Synaptics $0.2 bil
456 Take Two Interactive $0.2 bil
457 Teletech Holdings $0.2 bil
458 Tempur Pedic Intl $0.2 bil
459 Teradyne $0.2 bil
460 Tiffany $0.2 bil
461 Tim Hortons $0.2 bil
462 Titanium Metals $0.2 bil
463 Tyson Foods $0.2 bil
464 Valmont Industries $0.2 bil
465 Verisign $0.2 bil
466 Wesco International $0.2 bil
467 Williams Companies $0.2 bil
468 Wolverine World Wide $0.2 bil
469 Worthington Indust $0.2 bil
470 Air Gas $0.1 bil
471 Alliance One $0.1 bil
472 Amcol Intl $0.1 bil
473 American Greetings $0.1 bil
474 Ameriprise Fincl $0.1 bil
475 Ameron Intl $0.1 bil
476 Ansys $0.1 bil
477 Armstrong World Indus $0.1 bil
478 Asia Info Holdings $0.1 bil
479 Assurant $0.1 bil
480 Atmel $0.1 bil
481 ATMI $0.1 bil
482 Avid Technology $0.1 bil
483 Baldor Electric $0.1 bil
484 Broadridge Fincl Sol $0.1 bil
485 Burger King Holdings $0.1 bil
486 Cadence Design Syst $0.1 bil
487 Carpenter Technology $0.1 bil
488 Cascade $0.1 bil
489 Chart Industries $0.1 bil
490 Check Point Systems $0.1 bil
491 Church & Dwight $0.1 bil
492 CLACOR $0.1 bil
493 Clorox $0.1 bil
494 Coherent $0.1 bil
495 Colgax $0.1 bil
496 Cooper Tire & Rubber $0.1 bil
497 Covanta Holdings $0.1 bil
498 Cree $0.1 bil
499 Cubic Corp $0.1 bil
500 Curtiss Wright $0.1 bil
501 Cymer $0.1 bil
502 Digital River $0.1 bil
503 Dionex $0.1 bil
504 Disney $0.1 bil
505 Dr Pepper Snapple Group $0.1 bil
506 DST Systems $0.1 bil
507 Elizabeth Arden $0.1 bil
508 Entegris $0.1 bil
509 Equifax $0.1 bil
510 Exide Technologies $0.1 bil
511 Expedia $0.1 bil
512 Federal Signal $0.1 bil
513 FEI Co $0.1 bil
514 Ferro $0.1 bil
515 First America $0.1 bil
516 Foot Locker $0.1 bil
517 Genesee & Wyoming $0.1 bil
518 Graphic Packaging $0.1 bil
519 Haemonetics $0.1 bil
520 Harrahs Entertainment $0.1 bil
521 Heidrick & Struggles $0.1 bil
522 Helix Energy Solutions $0.1 bil
523 Herman Miller $0.1 bil
524 HIS $0.1 bil
525 Hormel Foods $0.1 bil
526 I H S $0.1 bil
527 Imation $0.1 bil
528 Instituform Technol $0.1 bil
529 Integra LifeSciences $0.1 bil
530 Intermec $0.1 bil
531 International Game Technology $0.1 bil
532 Internec $0.1 bil
533 ION Geophysical $0.1 bil
534 j2 Global Commun $0.1 bil
535 Jacobs Engineering $0.1 bil
536 JDS Uniphase $0.1 bil
537 John Bean Technolog $0.1 bil
538 KAR Auction Services $0.1 bil
539 Knoll $0.1 bil
540 Lockheed Martin $0.1 bil
541 LSI $0.1 bil
542 Lufkin Industries $0.1 bil
543 Masco $0.1 bil
544 Matthews Intl $0.1 bil
545 MBIA $0.1 bil
546 Microsemi $0.1 bil
547 MicroStratregy $0.1 bil
548 Monolithic Power Syst $0.1 bil
549 Monster Worldwide $0.1 bil
550 MTS Systems $0.1 bil
551 Mueller Water Products $0.1 bil
552 Multi-Fineline Electronix $0.1 bil
553 Nabors $0.1 bil
554 National Semiconductor $0.1 bil
555 NBTY $0.1 bil
556 NewMarket $0.1 bil
557 Newmont Mining $0.1 bil
558 NTK Holdings $0.1 bil
559 Nuance Communications $0.1 bil
560 Nucor $0.1 bil
561 OSI Systems $0.1 bil
562 Pactiv $0.1 bil
563 Park Electrochemical $0.1 bil
564 PH Glatfelder $0.1 bil
565 Pilgrim's Pride $0.1 bil
566 Power Integrations $0.1 bil
567 Pricesmart $0.1 bil
568 Q Logic $0.1 bil
569 Rackspace Hosting $0.1 bil
570 Regal Beloit $0.1 bil
571 Reliance Steel & Alum $0.1 bil
572 Robbins & Myers $0.1 bil
573 Rogers Corp $0.1 bil
574 Rovi $0.1 bil
575 Rowan $0.1 bil
576 San Disk $0.1 bil
577 Sanmina $0.1 bil
578 Sapient $0.1 bil
579 Sauer-Danfoss $0.1 bil
580 Scott's Miracle-Gro $0.1 bil
581 Seagate Technology $0.1 bil
582 SEI Investments $0.1 bil
583 Shaw Group $0.1 bil
584 Skechers USA $0.1 bil
585 SolarWinds $0.1 bil
586 Solutia $0.1 bil
587 Stepan Co $0.1 bil
588 Stericycle $0.1 bil
589 Steris $0.1 bil
590 Superior Energy Svcs $0.1 bil
591 Superior Industries $0.1 bil
592 Sybase $0.1 bil
593 Synutra Intl $0.1 bil
594 Techne $0.1 bil
595 Telco Energy $0.1 bil
596 THQ $0.1 bil
597 Timberland $0.1 bil
598 TNS $0.1 bil
599 Trimble Navigation $0.1 bil
600 Triquint Semiconductor $0.1 bil
601 Universal $0.1 bil
602 UTI Worldwide $0.1 bil
603 Viad $0.1 bil
604 W W Grainger $0.1 bil
605 Westinghse Air Brake $0.1 bil
606 Woodward Governor $0.1 bil
Total.......................... $1,263.1 bil

Job Creation Funding #4: Housing Crisis Financial Relief: “The Double Deduction 90% Double Drop Down”

The US housing crash has been devastating. I think the related government financial rescue plans for this extremely complex issue have not been very effective and also very costly, particularly the housing tax credit programs, which are nothing but temporary, very expensive, US federal deficit increasing, piecemeal band aids.

This proposal addresses financial relief for the housing crisis broadly and I think is an effective initiative in starting to get to the core of solving this devastating multi-faceted problem,which negatively impacts so many people, and which is intertwined with the very troubled jobless recovery picture, with both sky-high unemployment and underemployment, and with very little hope of much improvement on the horizon for quite a while.

All present US government housing crisis plans I am aware of cost the US government tons of money, with a lot more downside potential, but with no upside potential. My proposal here takes a different approach, and in fact, actually should reduce, by a substantial amount, the US Government Federal Deficit over the next ten years. And the potential upside to the US Government could well be off the charts. In fact, I think the total amount raised here could well be enough to cover the present projected TARP funding shortfall. Could that be possible? Read on.

The first part and bulk of this proposal relates to all financial institutions holding home mortgage loans on principal home residences, in which there aren't second mortgages, and where the principal balance of the mortgage loan is more than 90% of the Fair Market Value (FMV) of the home. Thus, this would include all under water mortgages and also ones only slightly above water, which are less than 10% above water. Toward the end of this article, I also have a proposal for the many underwater home mortgages in which there are second mortgages.

First, the US government sets up a US Federal Government Infrastructure Bank to facilitate this whole financing process.

This proposal would apply only to 2010 and relates to any financial institution that sells to this US Federal Government Infrastructure Bank the entire portion of any mortgage loan that exceeds 90% of the FMV of the related home. The selling price would be equal to the excess of the mortgage loan principal balance transferred over the Loan Loss Provision (or Expense) that the financial institution has already reflected in its income statements through the most recent audited financial statements (Dec 31, 2009, in most cases).

If this Loan Loss Provision reflected on the books doesn’t represent the financial institution’s best estimate of its loss on its mortgages, then this financial institution better clean up its books and also fire its external auditors.

Let me give an illustration of how this proposal would work.

Say on Jan 28, 2010, Wells Fargo has a mortgage loan receivable on its books with a principal balance of $300,000. The related home has a FMV of $200,000. The interest rate is say 8% fixed and the remaining mortgage term is say 15 years. Also, assume Wells Fargo has already recorded a Loan Loss Provision on this loan cumulatively of $90,000 in its audited income statements, and thus probably also has included $90,000 in its Allowance for Loan Loss on its audited balance sheet at Dec 31, 2009.

The principal loan balance transferred, or sold, which only can be the maximum under this Double Deduction 90% Double Drop Down proposal, is $120,000 (i.e. $300,000 minus 90% X $200,000). The selling price would be $30,000 (i.e. this $120,000 minus the $90,000 Loan Loss Provision).

Wells Fargo should have no income statement impact on this mortgage sale. It is very important to companies to not get income statement earnings hits for transactions like these. For you financial types, Wells Fargo’s accounting journal entry to record the sale is simply:

DR…Cash………………………….....30,000
DR…Allowance for Loan Loss…90,000
…..CR…Mortgage Loan Receivable……120,000

And after this sale, Wells Fargo is left with a first mortgage with a principal loan balance of $180,000, with the interest rate remaining at 8% fixed, with the term still for 15 years, and with as security, a home with a FMV of $200,000, and thus its initial loan principal balance after sale is precisely 90% of the FMV of the home….thus, the first 90% Drop Down.

The US Infrastructure Bank acquiring this mortgage loan gets a second mortgage on this same home, with a term of 10 years, which also is the CBO scoring period. It reduces the $120,000 loan principal amount down to $30,000, its purchase price. Whew, the homeowner here is elated. But there’s more to this story.

The US Infrastructure Bank charges no interest to the homeowner in the first year, when the US economy is so weak. In the second year, it charges only interest for 50% of the interest rate the home owner is paying to Wells Fargo. Thus, interest for the second year would be $30,000 X 50% X 8% = $1,200, or $100 per month. In the third year, it charges only interest for 70% of the interest rate the home owner is paying to Wells Fargo. Thus, interest for the third year would be $30,000 X 70% X 8% = $1,680, or $140 per month.

For the next seven years, when hopefully the housing crisis is completely over and the US economy is running on all cylinders, the interest rate is 90% (thus, the second 90% Drop Down) of the interest rate paid to Wells Fargo on the first mortgage, or 90% X 8% = 7.2%. The $30,000 is payable monthly with 7.2% interest compounded monthly as an annuity over 84 months (or 7 years), with the resultant monthly mortgage payment of $455.72.

If all of these payments are made, the US Infrastructure Bank would net a positive cash flow over the next ten years of $11,160, the cumulative interest received. And also the $30,000 loan principal was repaid. Thus, the US government would have a reduction in its federal deficit of $11,160 related to this loan over the next ten years. Thus, the total interest income of $11,160 represents a cumulative 37% return on the $30,000 loan bought.

If you wanted a higher total income return than that, then it would be necessary to step up the interest rates used over the 10 year term.

For instance, if you just matched Wells Fargo’s 8% interest rate over the entire 120 months (or 10 years), you would get total interest income of $13,678, or a 46% return. And then if you stepped up Wells Fargo’s interest rate to 9% over the entire 120 months, you would get total interest income of $15,603, or a 52% return.

Now let me address the front end CBO scoring of this entire program.

There will be some loans that won’t be repaid, and these would reduce the positive CBO scoring. However, for all loans combined, the US Infrastructure Bank should have substantially positive net cash inflow, and thus there should be some pretty substantively positive, in the aggregate, CBO scoring on the front end. The cumulative interest received should trump the cumulative loan losses....by how much?....by up to $50 bil, is my best guess.

And with its second mortgage, the US Infrastructure Bank has some very nice credit protection, particularly since after the sale, the first mortgage loan is initially only at 90% of the FMV of the home, and as loan payments are made, this 10% cushion will grow, thus also benefiting the credit protection of the second mortgage-holding US Government Infrastructure Bank. And then this cushion will also grow for any subsequent home price appreciation over the ten-year period.

Wells Fargo gets no earnings charge on its income statement from the partial mortgage loan sale. And economically, it benefits because it now has a Mortgage Loan Receivable on its books at 90% of the FMV of the home., and also pocketed $30,000 of cash.

If you wanted to incentivize the first mortgage holder even more, here’s what I would consider doing and it would be at no CBO scored cost to the US Government over the next ten years.

In the above illustration, if Wells Fargo hasn’t received a federal income tax deduction for the $90,000 Loan Loss Provision yet (which should be the usual situation), they should be allowed to deduct the $90,000 in 2010, the year the partial mortgage loan is sold. And then I would also consider letting Wells Fargo deduct it again in the same year….thus a Double Deduction…call it perhaps a Housing Crisis Financial Relief incentive. And then, in the tenth year, this second deduction of $90,000 would turn around and be added to Wells Fargo’s taxable income, or alternatively, 25% of this $90,000 is included in taxable income in each of years seven through ten.

Financial institutions certainly have large enough Allowance for Loan Losses to tax incentivize…..after all, Bank of America’s is now at $37 bil and Wells Fargo’s is at $25 bil…Whew! To be fair, these banks have already suffered their loan losses economically, they just haven't yet been allowed a related federal income tax deduction on these economic loan losses.

A very key control here relates to the verification of the amount of the Loan Loss Provision when the partial mortgage loan is sold. If a financial institution wants to game the system, it could try to minimize the amount of the Loan Loss Provision it claims it has already recorded on its books on this loan being sold.

Thus, I would require at least three checks. First, the financial institution’s CFO must sign a certification of the accuracy of the Loan Loss Provision already recorded on the books for this loan being partially sold and further that this amount also accurately reflects his best estimate of the loan loss related to this mortgage loan. Second, the GAO should audit the company’s computation. And third, the CBO should review and verify the GAO’s audited conclusion.

And then if these three checks weren't considered sufficient, a fourth check could be for a CPA firm to attest to the financial institution CFO's Loan Loss Provision assertion related to the mortgage loans sold.

A second option for this proposal would be to instead of setting Wells Fargo’s mortgage loan receivable after partial loan sale at 90% of the FMV of the home, it could be set at a lower 80%.

What this would do is to increase the selling price of the partial loan. On the downside, that would give the US Federal Government Infrastructure Bank more downside risk because it would be paying more. However, it would also give it more interest income upside. An additional advantage with using this lower 80% is that the Loan Loss estimate would be a bit more accurate.

And using this lower 80% would also be more beneficial to the homeowner because more of his loan would be transferred to the US Infrastructure Bank, which has more favorable interest terms than does Wells Fargo, the first mortgagor.

I think the incentives here would be very effective ones to motivate financial institutions to transfer a lot of these underwater mortgage loans to the US Infrastructure Bank. If even more of an incentive is needed, it would be really easy to accelerate, for federal income tax purposes, even more of these loan loss tax deductions. And when you design these additional accelerated tax deductions to turn around over the ten-year period, they wash out in CBO scoring.

And I would also consider front-loading the amount of the accelerated loan loss federal income tax deductions to spur early in the year 2010 home mortgage loan sales. To illustrate, if the 2010 annual loan loss deduction would normally be $90,000, the tax deduction could instead be sauced up for loans sold in the earlier quarters of 2010, in a quarterly pattern like this:

1Q 2010 mortgage loan sales.....$120,000
2Q 2010 mortgage loan sales.....$100,000
3Q 2010 mortgage loan sales.....$ 80,000
4Q 2010 mortgage loan sales.....$ 60,000

And then the taxable income turnaround of the above amount would occur in the latter part of the ten-year CBO scoring period.

This program would work not just for fixed interest rate mortgage loans, but also for floating interest rate loans. The US Infrastructure Bank would just apply the applicable above percentages to the floating interest rates charged by Wells Fargo, the first mortgagor.

I think I would set up this proposal so that smaller community banks are given an additional incentive to sell these partial mortgage home loans to the US Infrastructure Bank. One way to do this is for the US Infrastructure Bank to give banks below a certain total assets size, say a 5% to 10% price premium for their home loan sales made under this program. Thus, these smaller banks would be getting an attractive GAAP earnings uptick on mortgage loan sale. And this premium would not be passed on to the homeowner.

From an operational perspective, there could be several ways the US Federal Government Infrastructure Bank could work. All of the loan administration work could be done by new government workers at this new US Federal Government Infrastructure Bank. Or, the loan administrative work could be done by segregating all of this loan work by the financial institution making the mortgage loan sale to the US Infrastructure Bank. Or alternatively, the loan administrative work could be outsourced to Fannie Mae and Freddie Mac…..man, do they both ever need revenue bumps, or outsourced to any companies in the private sector.

And the real beauty of this overall proposal is that you not only get tons of Job Creation Funding from the substantially positive CBO scoring, but you also get a substantial amount of Juice added to the US Economy….just think of all the cash going to the banking system from these sales of clearly troubled part of these mortgage loans. This cash will be available to be lent out to businesses, particularly to smaller businesses, and also will be available to finance new and existing home sales. Further, the private banking system gets significantly strengthened by getting rid of the toxic parts of so many of its mortgage loans.

To be able to move the needle on these many underwater home mortgages even more, I think I also would consider addressing all home mortgages that have second mortgages and where either the first mortgage alone, or where in combination with the second mortgage, create an underwater situation. If their accounting is proper, the financial institutions holding these second mortgages should have already recorded a 100% loan loss provision for most of these underwater loans. Thus, they would have no income statement accounting hit if they were to forgive the entire principal balance of the second mortgage loan. In those cases where there is not a 100% loan loss provision already on the books, then my proposal would be to permit the financial institution holding the second mortgage to sell this loan to the US Infrastructure Bank for the excess of the loan principal balance over the loan loss provision already recorded. The US Infrastructure Bank would then roll this homeowner loan acquired into the loan acquired from the first mortgage holding bank. To incentivize the second mortgage financial institution to totally forgive, or in some cases to sell, the loan amounts of these underwater mortgages, I would consider giving these financial institutions some amount of additional upfront federal income tax loan loss deduction for the loans they forgive or sell. And then these amounts deducted upfront in the first year by the financial institution would turn around and be taxable income in say the latter four years of the next ten-year CBO scoring period. Therefore, these financial institutions would receive a significant economic benefit to forgive or sell these loans and at no CBO-scored cost to the US government. And by eliminating the second mortgage on the loans, this will permit many more partial principal loan sales of first mortgage loans to the US Infrastructure Bank. Thus, by also including home mortgages with second mortgages, the total positive CBO scoring should increase to substantially above $50 bil.

I fortunately don’t have an underwater mortgage, but I think if the US Government can bail out AIG, Fannie Mae, Freddie Mac, General Motors and many other mainly financial companies, surely the US Government can also help out its many US citizens with underwater mortgage loans, who have been financially devastated by the housing market crash, caused in large part by the very same companies the US Government bailed out. And if this proposal here is handled properly, with very strong incentives, I think the CBO scoring upside to the US Government over the next ten years could be up to a total of $50 bil. And if these large financial institutions unreasonably and greedily decide to not participate in this program, then I think the US Government should consider stepping up their Tax Deposit percentages and/or accelerating the dates of the required tax deposits of these companies’ open IRS tax audits, both included as part of Job Creation Funding #3.

Further, I think this proposal would be dynamite to the very troubled US jobless recovery, and particularly light a fire to the very depressed housing market, and to the smaller bank community, as well as to many small businesses. Underwater homeowners are not doing much in the way of consumer spending now. With the fiscal relief provided by this proposal, these homeowners will be much more likely to step up their consumer spending, thereby spurring the US economy.

And frankly, I really can't understand why the US Government isn't doing more to help these economically desperate homeowners, who are scared to death of losing their homes.....and many have even already lost their homes. If the US Government would just apply some wise real-world business creativity on this critical issue here, it could solve a huge chunk of this problem. I am certain that my proposal here is just one of many out there that would help. The fact that the US Government is dragging its feet on this issue, is just not right.

Job Creation Funding #3: Large Corp Deposits on Open IRS Tax Audits

Under GAAP, public companies are required to disclose in their footnotes included in their annual reports, their best estimate of what they owe in total to all taxing authorities for all of their open tax audit years. The bulk of these amounts disclosed relate to the amounts owed to the US Federal Government. Also included in this total are amounts owed to State Governments and to Foreign Governments.

I did a very quick review of some US large corporation footnotes and from just my very limited review, I found 106 companies that had amounts owed for all open tax audit years in excess of $300 mil each, that in the aggregate totaled $176.8 bil at the most recent year end, which for the majority of these companies was December 31, 2008. This total amount owed for these 106 companies was up 13.4% from the $155.9 bil owed one year earlier. And that 13.4% increase was registered in a year where taxable income of corps was severely hampered by a deep recession.

It takes a very long time for these companies to settle their tax audits with the IRS and other taxing authorities. For these 106 companies, there was an average of more than 8 years of open tax audit years.

My proposal here is for all companies which have estimated liabilities to all taxing authorities for all open tax audit years of in excess of $100 mil, for these companies to make estimated income tax payments, or deposits, to the IRS each year on all open tax audits, such that these cumulative tax deposits as a cumulative percentage of what they claim they owe the IRS at the following calendar year-end dates, are at least equal to:

By Dec 31, 2010….2%
By Dec 31, 2011….4%
By Dec 31, 2012….6%
By Dec 31, 2013….8%
By Dec 31, 2014…10%
By Dec 31, 2015…12%
By Dec 31, 2016…14%
By Dec 31, 2017…16%
By Dec 31, 2018…18%
By Dec 31, 2019…20%

Thus, if a company estimates that it owes the IRS $200 mil in total for all open tax years at Dec 31, 2010, then the cumulative tax deposits by that date must be equal to at least 2% of $200 mil, or at least $4 mil.

And then if a company estimates that, before considering the related tax deposits already made, it owes the IRS $500 mil in total for all open tax years at Dec 31, 2019, then the cumulative tax deposits by that date on these open tax audits must be equal to a total of at least 20% of $500 mil, or $100 mil.

When you think about it, this very modest tax deposit of only 20% of what a large corporation admits it owes is an absolutely incredible deal to this corp. Presently, large corps make quarterly estimated tax payments equal to 25% of what they owe annually in their tax return as filed. Thus, after their 4Q estimated tax payment for a year, the cumulative tax deposits for the year are equal to 100% of what is owed.

Let me roughly estimate what I think is a fair CBO scoring for this proposal.

For my limited sample of these 106 companies with total estimated liabilities above $300 mil each, the aggregate tax liability for the most recent year, or mostly at December 31, 2008, was $176.8 bil. Projecting that amount out eleven years using the same 13.4% annual increase of 2008 over 2007, the estimated total tax liability, including accrued interest, at Dec 31, 2019 would be $705 bil. My estimate is that the US IRS piece of that total would be somewhere between $500 bil to $600 bil. Contributing to this high US IRS portion is the tendency of some large multinational corps to shift income from the higher-taxed US to lower-taxed international tax havens, with the resultant US tax exposure upon subsequent IRS tax audit.

And then I would need to add the companies I excluded from my sample, including the many companies with estimated liabilities to all taxing authorities for all open tax audit years ranging from $100 mil to $300 mil, and also the many foreign corporations operating in the US and owing at least $100 mil for their open tax audits. Thus, the total US IRS tax liability piece would be at the very least in the range of $600 bil to $700 bil at December 31, 2019.

And it should also be pointed out that this Dec 31, 2019 tax liability on open IRS tax audits projection assumes the present extremely low interest rate environment will continue for the entire decade. In reality, interest rates will rise (later I talk about the very steep variable interest rate used by the IRS), and thus any reasonable interest rate used would drive this tax liability close to $1 trillion.

The positive CBO scoring here for the ten-year period would be 20% of this $600 bil to $700 bil, or $120 bil to $140 bil…..that I think should be used first to fund only real, measurable, desperately-needed Job Creation, that can be objectively CBO confirmed as clearly worth the cost, unlike some of the projects included in the present US House Main Street Jobs proposal and some included in last year’s Economic Stimulus Plan. And if there are any excess funds, I think they should all be used to reduce the US federal deficit.

And then there is always the opportunity to kick up this 20% to say 50%…..after all, this is not the large corp’s money, it belongs to the US Government, and thus it’s the US citizens’ money. This 50% assumption would result in positive CBO scoring in the range of $300 bil to $350 bil.

And I think this money should be used first to fund only long-term job-creation initiatives, properly designed and CBO objectively confirmed; and second to fund a substantial reduction in the US federal deficit.

After first allocating the substantial portion of this money to these two critical country needs (i.e. focused like a laser on just true, measurable job creation and on US federal deficit reduction), I would then consider allocating some of the excess funds to carefully selected infrastructure projects. At the very end of this post, I have an example of one very wise infrastructure invesment...in High Speed Mass Transit Systems.

And then I would also consider allocating some of the excess funds to well-designed, specially-tailored employment training programs for military veterans (perhaps, let Jack Reed design it) and for prison rehabilitation (let Jim Webb design it). Also, there should be special hiring programs for both military veterans and for released prisoners. I also would consider allocating some of the excess funds to targeted and very healthy tax incentives to employers for hiring and retaining military veterans and released prisoners. Whoa, the unemployment rates for these two groups are just too unacceptably high, even when the economy is strong.

For these companies making these tax deposits, there would be no earnings charge to them since these estimated liabilities are already recorded on the books. These companies would be simply partially paying, on a staggered-in basis over the next ten years, a small portion (20% to 50%) of what they agree they owe the IRS.

Also, there should be no negative economic impact to these companies. Further, these tax deposits made would stop the subsequent accrual of interest. In fact, nearly all of these large companies will be able to obtain financing for these tax deposits at a much lower interest rate than they would ultimately have had to pay to the IRS. Believe it or not, the IRS presently charges large corps interest at the federal short-term interest rate plus five percentage points.

Stockholders of these companies should buy into this Job Creation Funding proposal since they should want their companies to obtain the much cheaper outside financing on their debt than that provided by the steep financing required by the IRS.

In addition to the very favorable company financing mentioned above, another economic benefit here will accrue to the US States, since they could choose to require a somewhat similar tax deposit scheme for companies for all of their open state tax audits, and thus the present dire financial status of States could thereby be improved from the accelerated state tax deposits the States will be receiving.

Given how large US corporations will benefit greatly from the various Job Creation and Stimulus Proposals, I think it is only fair that these large corps make tax deposits that total only a very modest 20% to 50% of the amounts they agree that they owe to the IRS, staggered-in over the next ten-year CBO scoring period.

For the 106 companies I sampled, here is a listing of the 44 companies that had estimated tax liabilities, including accrued interest, of in excess of $1 bil each owed in total to all taxing authorities for all open tax audit years at their most recent balance sheet date.

1 Wells Fargo……………….. $9.1 bil
2 Pfizer/ Wyeth…………….. $8.2 bil
3 JP Morgan Chase………… $8.2 bil
4 GE………………………….... $8.0 bil
5 ATT………………………….. $8.0 bil
6 Merck/Schering Plough. $6.6 bil
7 Microsoft…………………... $6.0 bil
8 Bank of America…………. $5.9 bil
9 Exxon Mobil………………. $5.6 bil
10 IBM…………………………. $4.2 bil
11 Citigroup………………….. $4.1 bil
12 AIG………………………….. $3.8 bil
13 Morgan Stanley…………. $3.7 bil
14 Verizon…………………….. $3.2 bil
15 Cisco Systems………….... $3.1 bil
16 General Motors………….. $3.1 bil
17 Chevron………………….... $3.0 bil
18 Procter and Gamble……. $2.7 bil
19 Oracle……………………..... $2.7 bil
20 Edison Intl (Cal)…………. $2.4 bil
21 Comcast………………….... $2.2 bil
22 JNJ…………………………... $2.2 bil
23 Time Warner……………... $2.2 bil
24 PepsiCo…………………..... $2.1 bil
25 News Corp……………….... $2.1 bil
26 Hewlett Packard……….... $2.0 bil
27 Fannie Mae………………... $2.0 bil
28 Dell………………………...... $1.9 bil
29 Ford………………………..... $1.9 bil
30 Boeing…………………….... $1.7 bil
31 Nortel Networks………... $1.7 bil
32 Abbott Labs…………….... $1.5 bil
33 Exelon…………………….... $1.5 bil
34 Goldman Sachs………. $1.5 bil
35 WalMart………………….... $1.3 bil
36 Apple……………………..... $1.3 bil
37 Amgen…………………...... $1.2 bil
38 American Express……... $1.2 bil
39 Conoco Phillips……….... $1.2 bil
40 Eli Lilly………………….... $1.2 bil
41 Johnson Controls……... $1.1 bil
42 First Third Bank………... $1.1 bil
43 Kraft……………………...... $1.0 bil
44 Schlumberger…………... $1.0 bil
==============================

In reviewing the above list, I’ll make two very brief observations.

First, wow, look at all the financial companies located at the top of this list. Paul Volcker and Maria Cantwell are right on target in trying to rein in Wall Street. I think the one, at least, somewhat bright spot here is Goldman Sachs. Check out its income tax aggressiveness number here versus that of the rest of Big Wall Street Financial.

So the financial foundation of Big Wall Street Financial includes as one key ingredient the following financial firms disclosing that this is what they owe mostly the US Government upon IRS audit, but only assuming the IRS auditors can find it? These companies have to understand that the IRS is working for the US Government, and thus for US Citizens, who are the ones being financially harmed here. The US Citizens are shouting out that their money here is needed for wise investing in real, sustainable private sector Jobs, rather than invested by Big Wall Street Financial firms in risky financial strategies:

Wells Fargo………..$9.1 bil
JP Morgan Chase…$8.2 bil
Bank of America….$5.9 bil
Citigroup…………...$4.1 bil
AIG…………………...$3.8 bil
Morgan Stanley…..$3.7 bil

When there is this much carryover questionable financial sludge built up in one industry over many years, I think it might be time for a US Federal Government Infrastructure Bank.

Second, look at all the large multinational corps on the list. Given the International Tax Catch 22 many of these multinational corps are in here related to their income shifting and also given the deep crater the US economy continues to be in, I think that it might be wise for the US government to consider temporarily, on a one-time basis, permitting all multinational corps to repatriate at least a good chunk of their unremitted foreign earnings existing as of Dec 31, 2009, with a compromise dividend received deduction of say perhaps 40%, from now until Dec 31, 2010.

These multinational corps can’t pay the IRS what they owe them when they are audited, if their money is locked up in international tax havens like Ireland.

The past Administration left the current Adminstration with a country in a gigantic economic crater. But when the current Administration’s most, or perhaps second most, effective economic initiative so far is the "Pay Fors" program, which includes the highly successful implementation of a mandatory CBO scoring system, which is religiously followed and analyzed by all interested parties, it is no wonder that the country has only climbed about 10% out of this still very deep economic crater.

=======================================

Here is my specific proposal on spending some of the excess funds on High Speed Mass Transit Systems. To offset this high build out cost some, I think I would include in the proposal here some funding of the build out cost by all customers, including businesses, to be charged a bit of a System cost build out federal fee as a separately stated portion of the total ticket charge each time they use a High Speed Mass Transit Systems. Since customers, including businesses, will love using these systems, it is only fair that they pay for a substantial part of the build out cost. If you design this customer fee portion of the build out cost program on the front end, you'll get the positive CBO scoring for it. And frankly, I'd set this customer fee at a fairly high percentage of the total estimated build out cost of the High Speed Mass Transit System.

I would then consider allocating some of the excess funds on a fair-minded, logical, objectively ranked basis as down payments on some of the following long-term job-creating, economy juicing, energy independence abetting, upper education enhancing, and both medical treatment and scientific research facilitating, worker productivity improving, and yeah, even quality of life enriching (particularly applicable to retirees in places like Florida, Southern California and South Carolina) High-Speed Mass Transit Systems all over the country, again assuming that CBO can objectively confirm that the resultant job creation is worth its cost. Some of these systems are already partially built and thus the incremental cost to complete them won’t be nearly as substantial as ones where you are starting from scratch:

…From San Diego to Long Beach to Anaheim to Riverside to Claremont to San Bernardino to Las Vegas
…From USC and UCLA and Hollywood in LA to Caltech in Pasadena to the Jet Propulsion Lab to Santa Barbara to Monterey to San Jose to Silicon Valley to Stanford to San Fran to Oakland to U Cal: Berkeley to Sacramento
…From Redmond, WA to Bellevue to U WA: Seattle to Tacoma to Olympia to Vancouver to Portland, OR to Salem, OR to OR State U: Corvallis to U OR: Eugene
…From Cleveland Clinic to Toledo to Notre Dame: South Bend to Gary to Chicago
…From Ft. Wayne, IN to Detroit to U of Mich: Ann Arbor to Flint, MI to Mich ST: East Lansing to Grand Rapids, MI
…From New Orleans to LSU: Baton Rouge to Shreveport, LA to Jackson, MS to U of AL: Tuscaloosa to Birmingham to U of MS: Oxford to Memphis to St. Louis to Chicago to Milwaukee to U WI: Madison
…Indianapolis Spokes to all of Purdue: West Lafayette and on to Gary and Chicago; to Notre Dame: South Bend; to Ft. Wayne; to Columbus, OH; to Louisville, KY; to Evansville, IN; to St. Louis, MO; and to U of IL: Champaign-Urbana and on to Chicago
…Columbus, OH Spokes to all of Cleveland and on to Akron and Pittsburgh; to Wheeling, WV and on to Morgantown, WV; to Dayton and on to Cincy; and to Indianapolis, IN
…Nashville, TN Spokes to Louisville and on to Lexington, KY; to Knoxville; to Chattanooga and on to Atlanta; to Huntsville, AL and on to Birmingham; to Memphis; to Clarksville, TN and on to Evansville, IN and St. Louis, MO
…Atlanta Spokes to Chattanooga and on to Nashville; to Greenville, SC and on to Spartanburg, SC and to Charlotte, NC; to U of GA: Athens; to Augusta, GA and on to Columbia, SC; to Macon, GA and on to Savannah; to Macon, GA and on to Orlando, FL; to Columbus, GA and on to Montgomery, AL; to Birmingham
…Orlando, FL Spokes to U FL: Gainesville; to Daytona Beach and on to Jacksonville,FL and to Savannah, GA; to Jacksonville, FL direct; to JFK Space Center and on to Port St. Lucie and further to Ft. Lauderdale and Miami; to Miami direct; to Naples and on to Cape Coral, St. Pete and Tampa; to Tampa direct
…From St. Louis, MO to Springfield, IL to IL State U: Normal to Peoria to Quad Cities, IL/IA to U of Iowa: Iowa City to Cedar Rapids to Northern IL U: DeKalb to Rockford to Chicago
…From Houston to San Antonio to U TX: Austin to Dallas to Little Rock to U ARK at Fayetteville to Bentonville to Branson to U of MO: Columbia to Kansas City to U of KS: Lawrence to U Neb: Lincoln to Omaha to Des Moines to Mayo Clinic in Rochester, MN to Minneapolis/St. Paul
…From Myrtle Beach, SC to Charleston, SC to Columbia, SC to Atlanta to Chattanooga to U TN: Knoxville to Nashville to Louisville to Lexington, KY to Huntington, WV to Charleston, WV
…From Miami to Ft. Lauderdale to Naples to Ft. Myers to St. Pete to Tampa to Orlando to U FL: Gainesville to Jacksonville to both Tallahassee and to Savannah, GA and on to Charleston, SC and Myrtle Beach SC
…From Myrtle Beach, SC to Charlotte to Winston-Salem to Greensboro to Duke: Durham to UNC: Chapel Hill to Raleigh to Virginia Beach to Norfolk to Richmond to DC Metro Area
…From DC Metro Area to Baltimore to U of MD: College Park to Wilmington to Philly to Atlantic City to Trenton to Princeton to Newark to NY City Metro Area
…From NY City Metro Area to Yale: New Haven, CT to Providence, RI, to Boston, to MIT and Harvard: Cambridge, to Nashua, NH to Manchester, NH to Portland, ME
…Boston, MA Spokes to Lowell, MA and on to Nashua, NH and Manchester, NH; to Portland, ME; to Providence, RI; to Worcester, MA and on to Springfield, MA; to Worcester, MA and on to Hartford, CT; to Cambridge (MIT and Harvard)
…From Yale: New Haven, CT, to Hartford, CT, to U CT: Storrs, to Springfield, MA to U Mass: Amherst, to Albany, NY to U of Syracuse, NY to Cornell U: Ithaca, NY to Rochester, NY to Buffalo, NY
…From Fort Collins, CO to U CO: Boulder to Denver to Colorado Springs
…From U of AZ: Tucson to AZ State U: Tempe to Phoenix
…From Wichita, KS to Oklahoma City, OK to both U of OK: Norman and to Tulsa, OK to Dallas/Ft. Worth
…From Los Alamos, NM to Santa Fe, NM to Albuquerque, NM to U of NM: Las Cruces to El Paso, TX