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After-Tax Corporate Profits At Record Levels

October 9, 2012

After averaging 6% of GDP for the last 60 years, after-tax corporate profits are now at over 10.5%! This is the highest level since official records began in 1947.

This is certainly great news for the economy, stock holders and corporate executives.

In 2011 the chief executives of the 500 biggest companies in the U.S. (as measured by a composite ranking of sales, profits, assets and market value) got a collective pay raise of 16% last year, to $5.2 billion. This compares with a 3% pay raise for the average American worker. The total averages out to $10.5 million apiece.

But after knowing this fact, can anybody still say that a corporate tax cut is needed to help create jobs?

  1. Kiersten Marek permalink

    Reblogged this on and commented:
    In case you were wondering how corporate profits are doing in this Great Recession economy…

  2. Donald Wolberg permalink

    Corporate profits are a good thing. They mean people will keep their jobs or stay employed and be able to spend money to employ other people or buy products that will help employ other people. Government does not, cannot create jobs. The absurd or obscene dollars spent in the TARP nonsense created 1 job for every $780,000 spent–such is government success at job creation. Good old principles of profit and investment lead to prosperity, not the inefficent and ineffectual government process.

    • I agree that corporate profits are a good thing. But obviously, they don’t create jobs. If they did, we would have record low unemployment to go along with record high profits!

  3. Donald Wolberg permalink

    Actually the fact that there are any private sector jobs at all reflects reinvestment of profit, as well as the continued employment of workers already working. Without the generation of capital there would be no work for anyone. Of course the employment picture is complex, but the absurdly ineffectual interference of this administration into the private sector has slowed growth, reduced wealth for the majority of Americans,and quadrupled the national debt. If one looks at those parts of the American economy relatively free of federal interference, one sees prosperity. Thus, the energy sector in North Dakota, almost entirely on private or state land, has reduced unemployment to 3% and available jobs await qualified workers. Government does not create jobs, industry does.

    • I completely agree that profits are necessary for companies to stay in business. My only point is that those profits are now at record highs. IMO, this is a clear indication that corporations aren’t where the current economic weakness is coming from. Cutting their taxes will do little to solve the current problems with the economy.

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