As the working class struggled with high inflation in America, corporate profits reached a record high of nearly $3 trillion in 2021.
Data from the Department of Commerce’s Bureau of Economic AnalysisIt is clear that pre-tax profits outnumber aftertax profits. the whole year increasedBy a staggering 25 percent, the total reached $2.8 trillion. The annualized profit rate for the fourth quarter was even higher at 2.94 trillion.
The profit increase is greater than the 7 percent inflation in consumer prices. Stimulating argumentsIn order to boost their profits, companies raise prices above inflation. The hourly wage for U.S. workers has risen by 8%. about 4.7 percentThis is equivalent to a pay cut approximately 2.4 percent last year.
Experts say that the record profits are evidence that inflation isn’t a concern for corporations.
“Clearly, mega-corporations could easily absorb the higher costs of goods and services right now,” wrote Robert ReichFormer labor secretary, economist, University of California Berkeley. “They’re not raising prices because they have to. They’re doing it because – with so few competitors – they can. The problem, at its core, is corporate greed.”
Indeed, corporate executives Have admitted on earnings calls with shareholders that they’re not afraid to exploit inflation and current crises like the pandemic and the Russian invasion of Ukraine in order to increase their profits.
“Our business operates the best when inflation is about 3 percent to 4 percent,” Kroger CEO Rodney McMullen told investors last June. “A little bit of inflation is always good in our business.”
Other corporate executives have lied to their customers about the reasons they raised prices. As CBS reported, Tyson’s CEO told shareholders that the company it’s only raising prices on meat products in order to cover inflation costs for the company. It did however post profits of $1 billion for the first quarter of 2022. This is a 48 percent increase over the same period lastyear.
Lawmakers have proposed legislation in an effort to curb runaway profits. Last year, Senator Elizabeth Warren (D.Massachusetts), proposed legislation to curb runaway profits. Introduced a billThis would have led to a minimum tax rate equal to 15%. Stop companies fromTaxes paid at $0 a negative tax rateThanks to corporate subsidies,
Other recent proposals are aimed directly towards current profits. Last week, Sen. Bernie Sanders (I-Vermont) unveiled His corporate windfall profits are taxThe tax would be imposed at 95 percent on corporate profits exceeding pre-pandemic levels. This would apply to companies making more than $500 million in profits annually. The tax is similar to policies that the U.S. put in placeDuring World Wars I and II, and the Korean War, to discourage companies profiteering from these conflicts.
“We cannot allow big oil companies and other large, profitable corporations to continue to use the war in Ukraine, the COVID-19 pandemic, and the specter of inflation to make obscene profits by price gouging Americans at the gas pump, the grocery store, or any other sector of our economy,” Sanders said in a press release on the bill. “During these troubling times, the working class cannot bear the brunt of this economic crisis, while corporate CEOs, wealthy shareholders, and the billionaire class make out like bandits.”
