Income Dynamics, Economic Rents and the Financialization of the ...

%Profits
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Figure 2. Finance Sector Profits Before Tax and Realized Profits as Percent of all US Profits
FIRE (SIC, PBT without CCA*)
FIRE + Holding Companies** (NAICS, PBT without CCA)
FIRE (SIC, with CCA)
FIRE + Holding Companies (NAICS, with CCA)
1950 1960 1970 1980 1990 2000 2010
Year
Source: Bureau of Economic Analysis, Table 6.17 Corporate Profits Before Tax by Industry and Table 6.22 Corporate Capital Consumption Allowance by
Industry: Classification: SIC1972: 1948-1987, SIC1987: 1988-2000, NAICS2002: 1998-2008
*Realized Profits do not include Capital Consumption Allowances, Profits before Taxes include Capital Consumption Allowance. Profits reported here are
corporate profits with inventory valuation adjustment before tax and dividends are paid. We use realized profits, instead of cash flow (Krippner 2005), to
conceptualize the sum of profits before tax and capital consumption allowance. Cash flow is commonly used to indicate the sum of undistributed profits
(i.e. profits net of dividends and tax) and depreciation allowance. Realized profits can also be interpreted as profits before tax with inventory valuation and
capital consumption adjustments plus consumption of fixed capital.
** This category includes non-financial holding companies.
50