May 2, 2011; Source: New York Times | Some poll results should give nonprofits pause. A New York Times/CBS News poll says that, “While most Americans say corporations do not pay their fair share in taxes, they still prefer cuts in government spending to increasing taxes on corporations as a means of cutting the federal deficit.”
Republicans and Independents favored cutting federal spending rather than raising corporate taxes, and Democrats were evenly divided.
Even more surprising, 37 percent of respondents favored raising corporate taxes, 32 percent favored keeping them where they are, and, despite the deficit, 26 percent called for corporate taxes to be decreased.
There are multiple potential interpretations for nonprofits. First and foremost, there is little appetite among Americans for undoing the proposed spending cuts in the competing FY2012 budget proposals of President Obama and Rep. Paul Ryan (R-WI). Second, the corporate sector seems to have recovered from the dual body blows it took to its reputation after the Enron scandal and then the Wall Street-induced recession.
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America’s poor and working class households are having a difficult time in this economy, but the most recent information from the Bureau of Economic Analysis suggests that corporations are doing better and better. In the fourth quarter of 2010, corporate profits from current production increased $38.2 billion compared to an increase of $26.0 billion in the third quarter of the year.
The most significant corporate winners were the financial corporations, whose domestic profits increased $57.7 billion in the fourth quarter compared to an increase of $34.6 billion in the third (the profits of non-financial corporations decreased $10 billion in the fourth quarter). Total corporate profits reached the all-time record level of $1.678 trillion in the fourth quarter.
One particular corporate sector has done especially well in the first quarter of 2011 – the oil and gas industry. Exxon’s profits in the first quarter of 2011 rose 69 percent over the last quarter of 2010 – that’s $10.2 billion in one quarter. Shell’s first quarter profits rose 30 percent to $6.3 billion, Occidental’s 46 percent, Conoco’s 44 percent, and Chevron’s 31 percent.
The implication is that Americans are more concerned about subsidizing the profitability of big oil and financial corporations than the social safety net programs that nonprofits deliver to help the nation’s poor and working class.—Rick Cohen