Impact of US Tax Code on Market Concentration

This technical report analyzes the effects of the US tax code on market concentration, focusing on how corporate taxation influences profit shares and shareholder payouts. It highlights the growing concerns regarding the market power of large corporations and the implications for economic inequality and innovation. The authors, Sandy Brian Hager and Joseph Baines, present empirical data indicating that the current tax structure disproportionately benefits larger corporations, allowing them to capture a significant share of profits. The report discusses the historical context of tax policy as a tool for addressing market concentration and the necessity for reform. It reveals that the top 10 percent of corporations now control 95 percent of profits, a stark increase from 75 percent in the 1970s. The findings suggest that the domestic tax structure plays a crucial role in exacerbating corporate concentration, advocating for a reevaluation of tax policies to promote a more equitable economic landscape. The report calls for a combination of corporate tax reform and strengthened antitrust regulations to address these issues.