As the COVID-19 pandemic leaves millions of people unemployed and the country faces a deep economic downturn, corporations are profiting at an exacerbating rate. Corporations with already wealthy, white male shareholders are expected to bring in $85 billion more in 2020 than in previous years.
A new analysis conducted by Oxfam found that 17 of the top 25 most profitable U.S. corporations, including Microsoft, Johnson & Johnson, Facebook, Pfizer, and Visa are profiting extraordinarily during the pandemic further deepening existing inequalities. With these corporations expected to distribute 99 percent of net profits to shareholders, Oxfam is “calling for a resurrection of the WWII-era excess profits tax to limit pandemic price-gouging, level the playing field between companies, and raise much needed funds for COVID relief and recovery.”
“The COVID-19 pandemic has exposed deep inequalities and massive failures in our economic system, leaving tens of millions of people in the United States without jobs, devastating public services, and bankrupting countless small businesses,” Irit Tamir, director of the private sector department at Oxfam America, said. “Yet at the same time, thanks to a combination of government assistance and pure luck, a handful of corporations are raking it in and making already rich shareholders even richer.”
Titled, Pandemic Profiteers Exposed, Oxfam’s analysis exposed the increased inequality in America through the pandemic concluding that 9 out of every 10 dollars of corporate profits are “likely” to fill the pockets of White Americans with only 32 cents going to Black and Latino communities. The analysis also determined that companies listed on S&P 500 Index saw a 12 percent decrease in profits in the first quarter of 2020, and are expected to decrease by 39 percent come the second quarter, while small businesses reported their profits were halved in the first quarter of 2020 and could expect an 85 percent decrease in profits in the second quarter.
“Profit is not a four-letter word, but when such dramatic and excessive profits are made during a time of global crisis and distributed to the wealthiest, the situation is not just fundamentally unjust, it is also economically inefficient,” Niko Lusiani, senior advisor on corporate advocacy at Oxfam America, and lead author of the analysis, said. “Corporations like Microsoft, Johnson & Johnson, Facebook, Pfizer, and Visa, flush with billions in pandemic profits and disproportionately benefiting from taxpayer-funded economic relief, now have the opportunity to gobble up smaller companies and deepen their market power at the expense of true competition. Taxing these windfall profits is a fair, time-tested way to rebuild better.”
Oxfam’s response to preventing continued corporate profiting is for Congress to institute a Pandemic Profits Tax on excess corporate profits during this crisis. A similar tax was put in place in the 1940s and should be repurposed to “raise almost 80 billion dollars from just 17 super-profitable corporations, which could be reinvested in fighting COVID-19 and its economic toll,” Tamir said. The said tax will not take from small businesses or taxpayers, but rather help fight the existing inequalities and economic downturn caused by COVID-19 by taxing “those large corporations earning sums above and beyond what they earned on average before the pandemic,” Oxfam explained.
Oxfam outlined the options to help people recover from the pandemic as follows:
- Fund immediate and ongoing global coronavirus testing needs and deliver a COVID-19 vaccine to everyone on the planet, including necessary R&D, manufacturing, procurement, distribution, and delivery.
- Support working families and provide universal childcare and early learning programs for every child in the US.
- Provide extended paid and sick leave for essential workers and fund SNAP and WIC programs so no one goes hungry.
- Make voting safer and more accessible during the pandemic, including enhanced systems for vote by mail, raising voter awareness of how to vote, and shoring up vulnerabilities in election systems across the country.
As the analysis stated, “COVID-19 presents us with a choice as a society: Do we want to continue distributing our economic resources to the already-wealthy and well-connected, or shall we choose to redeploy this money into the once-in-a-century fight against COVID-19 and the inequalities it brings in its wake?”
“Taxing excess profits during a crisis is an old idea whose time has come again,” Tamir said.