ABSTRACT
This chapter focuses on aggregate behavior of business assets—of the businesses themselves—and on corporate profits specifically. The record of the average corporate-tax rate documents a trend approaching repeal of the corporate income tax. The difference between aggregate corporate cash flow and aggregate corporate profits obviously contains this accounting reconciliation, but it also reflects a much more significant item: the amount of the aggregate cash flow contributed by nonprofit corporations. The largest class of nonprofit corporations, measured by cash flow, is hospitals. For a profit-making business, the gap between cash flow after direct costs and profits is largely caused by expensing depreciation of major durable assets. The stock market, which occupies entire cable-television networks, is evidently far from indicative of corporate America. The stock market is not, as commonly thought, the playground of American capitalism. It is the playground of 15 percent of American capitalism.
