I ask my students this all the time … and I get ridiculously large answers. And these are business students, and I don’t teach 1000-level courses. I think the public is probably much further off.
Mark Perry reports that the median profit rate is about 6.5% of sales/revenue.
Think about that for a minute. Profits, by construction, are measured after corporate taxes are removed. So the government’s already gotten a share through the price you paid. Reasonable people can quibble about whether the amount they’ve gotten at this stage is too big or too small.
But then, at this juncture where the firm’s profit might become your cash the government imposes a tax on corporate profits. So the government is taking a share, and then asking for another share on top of that.
An analogy might help: this is like a bully that takes part of your money, and then when you go to buy lunch wants you to buy him lunch too.
But maybe that analogy is too harsh. Perhaps you like government. Well then, here’s another: government is like a dog that you give a treat to, so that they’re happier and perhaps bug you less, that turns around and begs for part of your dinner. I know lots of people that object to their dogs behaving that way. You should object when your government behaves that way too.