Feb

9

I hear again and again how profit margins for the S&P 500 are doing very well, thank you. I was wondering if there were any special variables affecting these profit margins. So, I pulled before-tax-income and total-income-tax data for a dozen S&P big caps in order to compare the tax rates being paid in the years 2006 through 2009, with the tax rate paid on 2010 income.

Results:

ticker / meantaxrate2006-2009 / taxrate2010 / diff

DIS   36.0%   34.9%   -1.1%
XOM   42.6%   40.7%   -1.9%
CSCO   22.8%   17.5%   -5.3%
JNJ   22.9%   22.1%   -0.7%
AAPL   30.7%   24.4%   -6.3%
IBM   27.4%   24.8%   -2.6%
KO   23.9%   22.8%   -1.1%
PM   25.8%   29.1%   +3.3%
INTC   26.8%   28.7%   +1.9%
VZ   23.8%   19.4%   -4.4%
GOOG   24.8%   21.2%   -3.6%
WMT   33.7%   32.4%   -1.4%
 

So, ten out of twelve of the companies had lower rates for 2010. The aggregate numbers are:

tax rate on aggregate 2006-2009 before-tax income: 32.8% tax rate on aggregate 2010 before-tax income: 29.4% diff: -3.4%

It does appear the government is trying to help out.


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