"Corporate profits, after having reached 8% of GDP only once in the previous 94 years, have averaged 9% since 2021. The statutory corporate income tax rate, meanwhile, is now just 21% down from 52% in 1960 as federal tax revenue from corporations has fallen from 4% of GDP to just 1.8% in that same period."
"As corporate profits soar, the labor share of income in the U.S. has cratered. The last two years saw wages and compensation fall to the lowest levels since 1941. And these two developments workers get less money, corporations get more are absolutely related."
"Rather than collect 4% of GDP directly from corporations, as the U.S. did until the middle of the last century, the government now gives more than half that money back for those corporations to invest. Two points of a $31 trillion economy is $620 billion. What return has America gotten on that investment?"
Corporate profits now average 9% of GDP, the highest sustained level in decades, while the statutory corporate tax rate has plummeted from 52% in 1960 to 21% today. Federal tax revenue from corporations has correspondingly fallen from 4% to 1.8% of GDP. Conservative economists justify low corporate taxes by arguing capital mobility prevents excessive taxation, as companies relocate abroad if overtaxed. However, this logic overlooks significant consequences. As corporate profits soar, worker compensation has fallen to its lowest share since 1941. CEO compensation has dramatically increased from 21 times average worker pay to 281 times. The government effectively invests $620 billion annually through foregone corporate tax revenue, yet workers lack basic benefits including retirement plans, health insurance, paid family leave, and childcare support.
Read at www.mercurynews.com
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