Corporations Are Doing Great. Workers, Not So Much.
Burger King is the latest American-born company that is ditching corporate patriotism in favor of exploiting a tax loophole by moving its headquarters abroad. Companies like this and others insist that they make these decisions because America’s corporate tax rate is too much of a burden for them to be competitive. But the reality is that America’s corporations have never done better. It is America’s workers, with wages stagnating and prices increasing, that are having a harder and harder time to make ends meet.
Let’s look at corporations first. Corporations are capturing a greater share of the national income overall. In 1946, corporate profits accounted for 4.5 percent of all the money earned over the course of the year. Now they have more than doubled that share to 11.2 percent.
Meanwhile, corporate tax obligations make up a smaller share of federal revenue. In 1946, 30.2 percent of all taxes collected by the federal government came from corporations; now corporate income taxes only cover 9.9 percent of federal revenue.
Center for American Progress fiscal policy expert Harry Stein explains the backward logic of corporations complaining that taxes are too high: “The claim that taxes are somehow ‘crushing’ corporations gets it backward—corporations could not survive without taxes. To list just a few examples, federal taxes fund education and training for the American workforce, a national transportation network to deliver products to market, a navy to keep shipping lanes safe from piracy around the world, and a legal system to protect copyrights and patents.”
While corporations have been doing better than ever, workers have not been capturing their fair share of these profits. Simply put, trickle-down isn’t trickling. In 2013, the share of corporate income that went to workers hit its lowest point since 1950, according to an analysis from the Economic Policy Institute.
Workers aren’t earning less because they’re working less. Oppositely, their productivity increased 8 percent between 2007 and 2012 while their wages actually fell.
BOTTOM LINE: These new economic numbers are more proof that our economy is not working for most Americans. Companies may point to the tax code as a reason for their corporate desertion, but the fact is they are doing better than ever. It’s middle and working class families, the real engines of the economy, that are left with less. We need an economy that works for them.
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