The stock market isn’t the economy. Many times if a person makes a negative comment about the economy, the frequent reply is “What do you mean? Look at the stock market.”
But that’s not the whole picture. In 2020, the top 1% of wealthy Americans increased their wealth by hundreds of billions of dollars. Another 9 million Americans slipped into poverty. Many small businesses went bankrupt.
Largely due to the pandemic, large corporations, and by extension the stock market, were enjoying a big increased flow of money due to the fact that people were doing much more buying online rather than locally. Big boost for Wall Street, not so much for Main Street.
Federal tax code and policy has not helped.
I’m not picking on Amazon, but I’ll use it as an example, being it is probably the best known online retailer and one of the most profitable corporations in the world. Amazon’s Jeff Bezos is one of the world’s wealthiest people. Reports are that Amazon didn’t pay federal income tax again last year, but lacking exact figures, I’ll use a previous tax year, which is pre-pandemic. In taxes filed in 2019 for 2018, Amazon had a profit after expenses of $11.2 billion. Amazon paid zero federal income tax on all that profit. Not only that, those of us who pay taxes had the privilege of chipping in to give Amazon a $129 million refund.
Amazon isn’t alone. Thanks to loopholes and breaks afforded to big business, the list of highly profitable corporations that don’t pay federal income tax is long. It’s the tax code that allows that.
Corporations use tax funded infrastructure much more than the average working American. They use airports much more often than the average American. The highways and streets that their products are delivered on are built and maintained with taxes.
Large corporations are doing great while millions of Americans are out of work and many small businesses are going out of business. All those dollars being spent online are dollars not going into local businesses. Small businesses up and down Main Streets all across America are the backbone of this country, yet are struggling to stay afloat.
When these small businesses go bankrupt, it can have a devastating impact on the local economy, but has zero effect on the stock market.
The stock market is not the economy.
Joe T. Chyle, Pisek, N.D