Wednesday, September 8, 2021

Record profits in COVID era makes for more reasons to stop the Tax Scam for corporations

When I hear complaints from the "business community" about how they can't find workers, what's rarely mentioned is that these are boom times for corporate profits. As we saw with two reports from earlier this week.

Let me start with the Census Bureau's report on retail profits.
Seasonally adjusted after-tax profits of U.S. retail corporations with assets of $50 million and over totaled $71.4 billion, up $23.3 (±0.6) billion from the $48.1 billion recorded in the first quarter of 2021, and up $32.8 (±0.9) billion from the $38.6 billion recorded in the second quarter of 2020.

Seasonally adjusted sales for the quarter totaled $963.9 billion, up $37.9 (±6.0) billion from the $926.0 billion recorded in the first quarter of 2021, and up $149.2 (±16.7) billion from the $814.7 billion recorded in the second quarter of 2020.
And that was after a big jump in profits in Q1 2021.

The manufacturers’ profit report tells the same story.
U.S. manufacturing corporations' seasonally adjusted after-tax profits in the second quarter of 2021 totaled $255.2 billion, up $26.9 (±0.8) billion from the after-tax profits of $228.4 billion recorded in the first quarter of 2021, and up $222.3 (±1.6) billion from the after-tax profits of $32.9 billion recorded in the second quarter of 2020.

Seasonally adjusted sales for the quarter totaled $1,800.5 billion, up $72.1 (±8.0) billion from the $1,728.4 billion recorded in the first quarter of 2021, and up $499.5 (±25.1) billion from the $1,301.0 billion recorded in the second quarter of 2020.
Much like retail, manufacturing profits are also significantly higher than they were at the end of last year.

The overall economy also has seen a sizable rise in profits at the start of 2021, as shown in the most recent GDP report.
Profits from current production (corporate profits with inventory valuation and capital consumption adjustments) increased $234.5 billion in the second quarter, compared with an increase of $123.9 billion in the first quarter.
That’s a record-high level of profits, coming 1 year after a quick, sharp decline when COVID first broke out in early 2020. The drop was only for 1 quarter, and profits have gone up ever since.

So companies certainly have money available, and it is likely that many of these companies received some kind of assistance to get through the economic and health crises of 2020. The least these guys can do is to invest more in their workers and grow their businesses.

And why should these corporations continue to have their profit-hoarding rewarded via lower tax rates through the GOP Tax Scam? Getting some of those Tax Scam giveaways reversed seems like an obvious move at this point, and given that those taxes can be plowed into infrastructure and added services, it would be likely that many of these companies would benefit from the added business that would result from the bills going through Congress.

Getting back some of those excess profits would start to rebalance our economy and keep our recovery going, which seems especially important if COVID's resurgence starts to leading to job losses. Particularly since those losses would likely affect lower-wage, non-office workers and smaller businesses.

Tell me what I’m missing on this one? Not only is increased taxing of corporate profits good economic policy, bringing up the FACT that these corporations are pulling in fat profits in 2021 while millions of jobs have yet to come back is winning politics. And it reallocates some of the excessive gains that corporations have pulled in over the last year of the COVID World.

PS- On a related note, maybe one area we can beef up our infrastructure on is enforcement of our tax laws.
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