I have held a large position in JNJ for a long time. Its one of my retirement stocks as I like the consistently rising dividends. Not sure how much Ill like them once Obummer decides to tax the shit out of them, I might switch some more into muni bonds.
JNJ won't be affected much about the tax. Look at their earnings report.
The only thing that will affect JNJ so far is the 2.3% tax on medical device makers, which is overplayed.
They can increase prices by an equal amount to compensate.
And from what I know, the $80 billion cost reductions the pharmaceutical industry promised to Obama is non-binding, but then again details of this deal was never released to congress or the media.
JNJ's total Medical device revenue based on 2009 10-k: $23.574 Million
Amount subject to tax: $11.01 Million (Only medical devices shipped to the US are subjected to the tax)
Approximate amount of tax: $253 million
Deduct that $253 million as a loss on 35% corporate income tax:
And you get an "actual" tax bill of $164 million.
JNJ's net profit for 2009 was $12.9 billion.
Only a 1.3% reduction in net income if you're comparing $164 million to $12.9 billion...Big deal.
I don't expect any new thing from the Obama administration because I expect Republicans to win lots of seats. If they bring the DEM seats in the senate from 58(60) to 52(or even less), that's good enough for me.