Should corporate America be contributing a greater share to reducing the federal deficit?
On the same day (Jan. 17) that the Business Roundtable, representing 200 of the nation's top chief executives, suggested reducing the federal deficit by raising eligibility ages for Social Security and Medicare recipients to 70 years, Bloomberg News reported that corporate profits are at a historic high: "U.S. corporations' after-tax profits have grown by 171 percent under [Barack] Obama, more than under any president since World War II, and are now at their highest level relative to the size of the economy since the government began keeping records in 1947. ... Profits are more than twice as high as their peak during President Ronald Reagan's administration and more than 50 percent greater than during the late-1990s Internet boom, measured by the size of the economy."
In the same article, Bloomberg reported that "workers' compensation is claiming a 54 percent share of the economy, down from 59 percent as recently as 2001 and the lowest mark since March 1955." (A summary of this article appeared in the Star Tribune on Jan. 20.) It has previously been reported that corporate tax rates are now at 30-year lows as a percentage of GDP. These data prompt the question of whether corporate America itself should be contributing a greater share to reducing the federal deficit instead of relying primarily on lowering employees' entitlements.
ELAINE HANDELMAN, MINNEAPOLIS