The U.S. government could easily ensure that all Americans and the global community benefit from the profits that many wealthy U.S. companies have raked in during the coronavirus pandemic, Oxfam America said in a report released Wednesday as the group called for the country to implement a Pandemic Profits Tax, similar to one used during World War II.
In its report, "Pandemic Profiteers Exposed," Oxfam revealed that 17 of the nation's 25 most profitable companies--including Johnson & Johnson, Microsoft, and Facebook--are expected to make nearly $85 billion more in 2020 than they did in previous years.
The profits are flowing in as the U.S. faces Great Depression-level unemployment, millions of Americans have reported being unable to pay their rent and mortgage payments in recent months, and cities across the country face coronavirus testing shortages, severely weakening the nation's ability to track and contain the spread of Covid-19.
"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, Oxfam America
But while Microsoft, which is poised to see its profits grow more than any other U.S. company in 2020, is among the corporations that have claimed "We're all in this together" during the pandemic, the vast majority of the tech giant's profits this year are expected to go to its shareholders, a majority of whom are white, male, and already wealthy, according to Oxfam.
The group found that among the 25 most profitable U.S. companies, 99% of net profits will be distributed to shareholders this year rather than going to efforts to protect workers during the historic economic downturn.
"Amid the deepest public health and economic crisis since World War II, this is hardly a shared sacrifice from the nation's preeminent business elite," Oxfam's report reads.
To correct this, the group said, the federal government must reintroduce an excess profits tax--the same tax which was used during World War II and similar to one implemented by 22 countries during World War I "to tax the portion of profits that derive not from hard work, but from an external event the taxpayer had no hand in making."
The Pandemic Profits Tax would apply only to companies with $500 million or more in annual gross receipts; small companies, which have reported their earnings have been cut in half in the first quarter of 2020 and which are expected to lose 85% in profits in the second quarter, would be exempt.
"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," said Niko Lusiani, senior advisor on corporate advocacy at Oxfam America, and lead author of the report. "Corporations like Microsoft, Johnson & Johnson, Facebook, Pfizer, and Visa, flush with billions in pandemic profits and disproportionately benefitting 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."
With its report, Oxfam joined economists and political observers who have called for the use of an excess profits tax for the duration of the pandemic since the crisis began.
\u201cAbout once a day I think about major online retailers - namely AMAZON - who have been making insane profits off of this pandemic and once a day, I'm enraged that they are not hit with an EXCESSIVE PROFITS TAX. We have done it in previous wars, why not this one????????????????????\u201d— Negin Farsad (@Negin Farsad) 1594218298
\u201cAbsolutely not. There are billionaires making a killing during this pandemic. Just as we once did in other periods of crisis, impose an excess profits tax to back stop landlords like Ma & Pa. Problem is 1 % own our politics.\u201d— Bob Hennelly (@Bob Hennelly) 1595291281
\u201cI'll say it again: EXCESS PROFITS TAX NOW! Important new findings from @OxfamAmerica - "more than 9 out of every 10 dollars of excess pandemic profits are likely to end up in the hands of white Americans, with only 32 cents for Black and Latinx communities"\u201d— Kate Donald (@Kate Donald) 1595449260
\u201cwe need a special gift for Trump-Kushner and friends, an excess profits tax to take back some of the money they make off of the bailout https://t.co/OYtYNwtiTP\u201d— Dean Baker (@Dean Baker) 1586833219
According to Oxfam, the Pandemic Profits Tax could raise $80 billion just by taxing the most profitable U.S. companies--and would raise far more if the tax was implemented across all large U.S. corporations.
The group reported that the revenue could immediately fund ongoing coronavirus testing needs across the globe, as well as research and development, manufacturing, and delivery of a Covid-19 vaccine for everyone on the planet.
"Taxing excess profits during a crisis is an old idea whose time has come again," said Irit Tamir, director of the private sector department at Oxfam America. "Repurposing a tool used during WWII could raise almost $80 billion from just 17 super-profitable corporations, which could be reinvested in fighting Covid-19 and its economic toll."