Corporate Profits and Taxes
SOURCE: AP/Richard Drew
While middle-class and low-income Americans struggle to get by, corporate profits are soaring. In 2013, corporate after-tax profits consumed a record-breaking 11.2 percent of total national income. Between 1946 and 2010, after-tax corporate profits always remained below 10 percent of national income, but 2013 was the fourth consecutive year in which corporate profits exceeded 10 percent of national income.
Meanwhile, corporate income taxes only constituted about 10 percent of total federal revenues collected in fiscal year 2013, which is right in line with their average contribution since FY 1980 but down sharply from earlier decades, when corporations contributed double or triple that percentage.
The claim that taxes are somehow “crushing” corporations gets it backward—corporations could not survive without taxes. To list just a few examples, federal taxes fund education and training for the American workforce, a national transportation network to deliver products to market, a navy to keep shipping lanes safe from piracy around the world, and a legal system to protect copyrights and patents.
While the federal tax code has many flaws, it does not prevent corporations from competing in the global economy. Indeed, American corporations are doing better than ever.
Harry Stein is the Associate Director for Fiscal Policy at the Center for American Progress.
To speak with our experts on this topic, please contact:
Print: Liz Bartolomeo (poverty, health care)
202.481.8151 or firstname.lastname@example.org
Print: Tom Caiazza (foreign policy, energy and environment, LGBT issues, gun-violence prevention)
202.481.7141 or email@example.com
Print: Allison Preiss (economy, education)
202.478.6331 or firstname.lastname@example.org
Print: Tanya Arditi (immigration, Progress 2050, race issues, demographics, criminal justice, Legal Progress)
202.741.6258 or email@example.com
Print: Chelsea Kiene (women's issues, TalkPoverty.org, faith)
202.478.5328 or firstname.lastname@example.org
Print: Beatriz Lopez (Center for American Progress Action Fund)
202.741.6255 or email@example.com
Spanish-language and ethnic media: Rafael Medina
202.478.5313 or firstname.lastname@example.org
TV: Rachel Rosen
202.483.2675 or email@example.com
Radio: Sally Tucker
202.481.8103 or firstname.lastname@example.org