The attacks on corporate America and its earnings by some politicians is dangerously misguided.
When you mention this, left leaning supporters often note that most Americans don’t own stock. That’s somewhat true. Most studies (surveys) indicate 50% to 53% own stocks including in retirement accounts, but generally those percentages do not include those who participate in a defined benefit pension plan where trust assets are invested in the stock market. According to the Pension Rights Center about 31 million workers are in a defined benefit pension plan (not counting already retired workers). 80% of all public employees have a traditional pension plan.
Here’s the thing, every state has at least one retirement plan; most including a defined benefit pension. And, most are poorly funded, that is, not meeting the 80% funding of liabilities standard, some like Illinois and NJ are only funded around 30% +- of liabilities.
Now, if you live in any state in the US you have a stake in the stock market. A good portion of your taxes, especially your property taxes, go toward funding these pensions.
Funding has two parts; contributions and the earnings on the investments. Each plan assumes its investments will earn a certain return each year, say 6-7%. If that doesn’t happen more tax money must be invested; higher taxes or often that means taking money from other government services. Or, in the case of some states ignoring the funding and creating a future fiscal crisis. Either way, you as a taxpayer are in the hook.
So when you hear the rhetoric to have corporate America pay more in taxes, share more of their earnings or any other idea that affects its stock value, remember you too are affected by the consequences.