Profit Margins and Tax Rates, from Alston Mabry
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.