Corporations profit while we suffer.
I thought profiteering was illegal.
Are you worried about your family’s future, wondering how you’ll make it through the next year? Do you see prices going up, yet your hours are cut and you still haven’t made up the time from being sick last year?
In the third quarter of 2021, US corporate profits were up over 10 percent of gross domestic product. That’s after taxes.
Do you mean to tell me that corporations are raising prices AND earning more income than they have since 1947?
Here’s how they are justifying the increases.
There have been materials shortages pushing prices up and large corporations aren’t just passing them on to the customer. They may be adding a profit margin to the increase as well.
For example, an extra 100 dollars in material cost to the company will be marked up by 30 percent (for example) and the customer will be charged 130 dollars extra.
The pandemic caused shutdowns and then delays in shipping. As demand went up, so did the cost of freight. Again, the corporation passed the extra costs on to the consumer with a mark-up.
Corporations have a tendency to try and boost profits during times of inflation and this is no exception. They are part of the problem.
Price increases caused by additional markups are a big part of inflation. It’s a vicious loop.
We’ve heard that some companies have had to pay higher wages to attract employees, but most large corporations aren’t paying the little guy any better than they were before the pandemic.
Nearly 2 out of 3 companies reported fatter profit margins than they did before the pandemic. Let’s use that word again. WTF?
This is a symptom caused by a few economic giants pulling strings in the background.
There should be a law against that. Wait, there is one. Or at least there used to be.
What About Profiteering Laws?
When they raise prices during an emergency, business owners should be accused of profiteering.
Profiteering isn’t illegal in the US or Canada, only in the UK and Germany, and only under specific circumstances.
Price fixing or price gouging is illegal, but you have to prove that two large competitors agreed to work together to keep prices high.
We have a structural problem where a few large American corporations control huge swaths of the consumer goods markets. It doesn’t take much for them to <wink-wink> raise prices at the same rate.
Corporations are using their hold on the market and the excuse of inflation, shipping costs, materials cost…to increase prices.
Excess Profits Tax
During WWI, American companies were using the circumstances of the war to jack up prices. They were making record profits and something had to be done.
The US charged an excess profits tax in 1917. They looked at prewar earnings and charged taxes of 20 to 60 percent on business profits above that level after the war.
Excess profits taxes were also charged at different times during WWII and the Korean war.
Is There An Excess Profits Tax In 2021?
In 2020, several economists have proposed an excess profits tax should be imposed on corporations that benefited from the epidemic and the government closures. Mainly online shopping, streaming services, and cloud services have seen increases in business.
It didn’t happen.
Instead, governments ramped up spending and put more money into circulation.
They printed money and paid support payments. This money was passed on to the corporations that were making excess profits.
Will They Get Away With It?
Now that you understand how corporations are justifying their price increases, you can see how they’re contributing to the problem without any consideration for their customer.
The government isn’t doing anything about it either.
Corporations are sensitive to customer demands. We changed the face of the world with the #MeToo movement.
Let’s do it again.
Tell your story. Post it on social media. Tag the big corporations.