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cashinmattress

Profits At Largest 500 Corporations Grew By 81 Percent In 2010

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One of the dominating justifications that the right uses for its economic policies is that lowering taxes and regulations on society’s wealthiest members and big businesses will cause an explosion of wealth that will eventually “trickle down” to the vast majority of Americans. Yet while a record number of Americans are receiving some form of government assistance as unemployment remains high and the economy is in shambles, one group is doing very well: corporate America. The 2011 Fortune 500 list was unveiled today, surveying the growth and profits of the nation’s largest 500 corporations. It found that the profits of these companies “soared 81″ percent over the past year, causing the editors of Fortune to say that “we’ve rarely seen such a stark gulf between the fortunes of the 500 and those of ordinary Americans”:

All told, the Fortune 500 generated nearly $10.8 trillion in total revenues last year, up 10.5%. Total profits soared 81%. But guess who didn’t benefit much from this giant wave of cash? Millions of U.S. workers stuck mired in a stagnant job market. [...] Nevertheless, we’ve rarely seen such a stark gulf between the fortunes of the 500 and those of ordinary Americans.

At the same time, corporate tax revenue as a percentage of GDP is lower than it has been in years, meaning that not only is the wealth not trickling down, but that these big firms are also becoming less and less likely to pay their fair share.

The same thing is happening in most western economies.

And there are still those that say it wasn't planned...

And as Mr Krugman points out:

Who Benefits From Bubbles?

One of the more interesting documents published by the IRS — I know, I know, not the hardest criterion in the world — is its report on the income and taxes of the top 400 taxpayers (pdf). A lot of attention gets focused, rightly, on the remarkably low average tax rate these people pay — less than 17 percent in 2007, the lowest on record.

But I was struck by something else: in several years during the last decade the top 400 accounted for more than 10 percent of all capital gains income in America. Just 400 people!

Conservatives often try to sell the notion that reducing the capital gains tax is about helping small business people. But you really want to think of the fact that a significant chunk of that tax break is going to just 400 people.

And when you think about financial regulation, you similarly want to bear in mind that when asset prices rise, a tiny handful of people get a large chunk of the gains; I don’t know this for sure, but I’d bet that they somehow end up bearing a much smaller share of the losses when the bubble bursts.

Anyway, think about it: a lot of policy is dictated by the interests of a group of people who, if you could separate them from their entourages, would fit easily into McCosh 10.

Yes, 400 people paid 10 percent of the capital gains tax in America, in a country of 300 million.

IRS data: http://www.irs.gov/pub/irs-soi/07intop400.pdf

Edited by cashinmattress

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well 2009 was a recession year so 81% profit growth is not surprising.

some companies lost money so they had infinite percentage growth.

what would you rather? That all companies lost money and went bust so all their employees lost their jobs?

capital gains tax is about the small business person - are those 400 people the same every year? probably not.

Do most people pay capital gains tax every year? no. they pay it infrequently such as when they sell a business or other investment.

the bailouts etc and QE were designed to help the elite and the bankers and they have done - why so surprised?

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No surprises here.

It's just some editorial pieces I threw together, for discussion purposes.

Nothing to be discussed.

The question is...what do you do about it!?

Straight to the root of the problem I say....(see below).

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If it's true that most wealthy people keep most of their money in shares, aren't those share values dependant on business profits which are in turn dependant on people buying stuff?

So the strategy of sucking all the wealth to the top would seem to have a rather obvious flaw- sooner or later there will not be enough demand to keep those business profits coming in.

So on the one hand we have massive corporate profits, and on the other Walmart is seeing a decline in business as the cash runs out for joe sixpack.

Can you have a consumer based economy without consumers? :unsure:

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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