Booming corporate profits aren't being taxed by Feds, but are balancing the books in Wisconsin

As part of the revised GDP figures that came out for Q1 last week, there also was a revision in another stat for the first three months of the year in that report.

Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $74.4 billion in the first quarter, revised up $34.0 billion.

Oh? So profit growth nearly doubled from what we had in the original report? And that's on top of what has been a remarkable runup in that figure over the last few years, including an increase of nearly 13% between Q1 2025 and Q1 2026.

And companies are also squeezing out higher rates of profit from their products than they have for most of our lifetimes.

Corporate profits, on an after-tax basis, represent 12.4% of US gross domestic product, the highest reading since the second quarter of 2021, when profits peaked as the COVID pandemic ebbed. It also marks the second-highest quarterly reading ever in the data, which goes back to 1947. Compared against a closely linked measure of US gross domestic income, the total income earned by residents and businesses, corporate profits are even healthier, with a ratio of 12.2%, according to Axios, the highest figure since the early 1950s.

No matter how you slice it, corporate profits in 2026 are soaring higher from what were already historically high levels as a variety of factors — from the AI boom to improved efficiency — have yielded even better returns for corporate America and its investors....

The data also shows that high corporate profit margins have become a longer-term feature of the US economy for years now. From 1950 through 2010, corporate profits as a percentage of GDP were nearly always below 10%.

But in the 16 years since, those margins have been above 10% nearly every quarter, outside of a modest dip during the early stages of the COVID pandemic.

But because of the 2 GOP Tax Scams of the last decade, we aren't seeing those higher corporate profits translate into higher corporate tax revenues at the IRS. Corporate tax revenue is down nearly 30% through May of this fiscal year compared to the same 8 months in FY 2025, and it's down over $100 billion from the same time period in the last full fiscal year under Joe Biden.

Ironically, these corporate tax breaks at the federal level might well have led to much higher corporate taxes being collected for the State of Wisconsin. We haven't had too many additional corporate giveaways at the state level since Tony Evers became Governor in 2019, and while we don't have May's state revenues publicly available, we do have them through April, and Wisconsin's corporate tax is up more than 11% compared to the same time period in Fiscal Year 2025.

That comes on top of a major jump in state corporate taxes that started in 2021 and hasn't come down since.

So while the result of all this profit-taking in corporate in America in the 2020s may suck for everyday people, and has helped to blow up our deficit even more in recent years, I'd say it's helped out Wisconsin's fiscal situation at the same time. That extra $1 billion+ a year has opened the door for income tax cuts for individuals to spend down some of the surplus that's come about in the last few years, and in an odd way, has likely made for more tax fairness in Wisconsin in a time of massive increases in inequality in the US.