Back to the 60s Post-Tax Profit Rate in 2012 Hits Highest Point Since LBJ Administration

[xchrom]

http://www.epi.org/publication/60s-post-tax-profit-rate-2012-hits-highest/

Thomas Piketty’s new book Capital in the Twenty-First Century, which is getting deserved attention and plaudits, argues that if the rate of return to capital exceeds the overall economic growth rate, then wealth and income will become more concentrated among the already comparatively well-off.

In the United States, a key driver of the overall rate of return to capital has been the profit rate in the corporate sector. As shown in the figure below, the corporate profit rate has risen fairly steadily (aside from dips during recessions) since 1979. By 2012, the post-tax profit rate had reached its highest level since the late 1960s. The data point for 2013 is estimated (capital stock data for 2013 have not yet been released)—but corporate profits came in significantly higher than in 2012, so it seems likely that the profit rate (given trends in corporate investment) will rise even further.

[Amak8]

1. Aside from crushing unions,

Antitrust enforcement disappearing starting the Reagan years is a big factor. ComcastTimeWarner provide terrible service; what are we going to do about it?

[malthaussen]

2. You need only look at the 1979 rate...

... to understand why it has become obligatory to deride the 70's. Profits have approximately doubled since then. Who would want a return to such terrible times for Business? (That's sarcasm, children)

-- Mal