Looking at the Federal Budget data documents directly is always revealing because it avoids being blindsided by political blah blah and media spin. Just the facts, no BS.
I looked at corporate tax revenue from 2014 to now and the projections for the immediate future. Then I made the following chart. This is what the current government is planning to do:
- Triple corporate tax revenue from $212 billion to $648 billion in FY2024
- Corporate tax revenue is budgeted to rise from 1% to 2.5% of GDP
(In case you are wondering about individual income taxes, they are
also budgeted to rise from $1.61 trillion to $2.29 trillion, or from
7.7% to 9.0% of GDP)
Looking at corporate taxes from a longer perspective, the budgeted 2.5% of GDP for FY2024 is the highest since 1979 - excluding 2006-07 when the financial sector had record profits during the Great Credit Bubble (that didn't end too well...).
The era of low taxes is over, clearly. This is the Biden administration's plan, anyway.
Corporate Tax Revenue As Percentage Of GDP
Given that the effective tax rate is currently at 14%, the lowest level in history, the Biden budget is effectively calling for it to at least double, taking it back to the levels of the early 1990's.
Right now S&P 500 is trading at 35 times after tax earnings. The only time P/E was higher was when financial sector earnings collapsed during the Credit Bubble implosion (ie huge losses dragged down average earnings) and at the top of the dotcom madness - see below, notice the scale is logarithmic.
S&P 500 12-Month Trailing P/E
So... equities trading at record P/Es at the time when the government is budgeting a tripling of taxes. Hmmmm....