Corporation Profits and Taxes in Prosperity

Report Outline
Business Profits and Taxes in the Campaign
Profit Picture of American Corporations
Tax Load of Corporations in United States
Corporation Taxes and Small Business Aid
Special Focus

Business Profits and Taxes in the Campaign

With republicans making national prosperity a major campaign appeal, Democrats between now and Nov. 6 are bound to hammer on the theme, stressed for three years, that the Eisenhower administration is dominated by big business and caters primarily to its interests. Adlai E. Stevenson, Democratic presidential nominee, already has indicated how he will respond to Republican boasts of good times. Returning Aug. 31 from a countrywide tour to confer with party leaders, he said that everywhere he went he found people concerned about “America's lopsided prosperity.” Stevenson added that the voters were “indignant about the highest cost of living in history” and “troubled about regional unemployment [and] the plight of the small businessman.”

Democratic Assault on “Lopsided Prosperity”

With retail prices at record levels and apparently embarked on a climb to new heights, the public is likely to pay closer attention than usual to what candidates have to say about business profits and taxes. Ordinary citizens may ask why the corporations which are making so much money cannot reduce prices of their products instead of constantly raising them. They may want to know whether the big corporations, despite high profits, are in line for tax reduction next year. Or will the 85th Congress reserve for small business and individuals any tax relief it is in position to grant? In the meantime, what is the actual profit-price-tax situation?

Near-Record Profits in 1955 and 1956

Combined profits after taxes of American corporations amounted to between $16 billion and $17 billion in each of the three years 1952–1954 and then jumped in 1955 to $21.1 billion. In the first and second quarters of 1956 corporate profits after taxes were accumulated at annual rates of $21.6 billion and $21.5 billion, respectively, for an increase of about 7.5 per cent over the first half of 1955.