Corporate Profits Are Up. Their Tax Bill Should Be Too.
The corporate income tax rate got hacked nearly in half by the 2017 Tax Cut and Jobs Act. So nine years later, how’s that working out? Corporations’ effective tax rate (about 9%) is lower than what the average American household pays (about 14.5%). After-tax corporate profits have hit record highs for the last four years — about 9% of GDP, a figure not hit since 1929. Workers' share of total national income, by contrast, is at a 70-year low. If corporate taxes go back up, some companies may threaten to reincorporate somewhere cheaper. Call that bluff. Someone else will deliver the toilet paper and make the coffee.
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The corporate income tax rate got hacked nearly in half by the 2017 Tax Cut and Jobs Act. So nine years later, how’s that working out? Corporations’ effective tax rate (about 9%) is lower than what the average American household pays (about 14.5%). After-tax corporate profits have hit record highs for the last four years — about 9% of GDP, a figure not hit since 1929. Workers' share of total national income, by contrast, is at a 70-year low. If corporate taxes go back up, some companies may threaten to reincorporate somewhere cheaper. Call that bluff. Someone else will deliver the toilet paper and make the coffee.
- Donate to keep Optimist Economy going: https://optimisteconomy.com
- Video clips are on the Optimist Economy YouTube channel.
- Consume leisure with us on Instagram at @optimist_economy or TikTok at @optimist_economy. Or meet other Optimists on our Substack chat.
- Feel like dis-saving? Our merch: https://merch.ambientinks.com/collections/optimisteconomy
Got economic questions, concerns, or executive orders? Send them to optimist.economy@gmail.com
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