"2-2d Capital and Its Earnings
After deducting the small sliver of income that goes to the owners of land and natural resources, the rest of national income mainly accrues to the owners of capital—the machines and buildings that make up the nation’s industrial plants.
The total market value of these business assets—a tough number to estimate—is believed to be in the neighborhood of $40 trillion. Because that capital earns an aver- age rate of return of about 10 percent before taxes, total earnings of capital—including corporate profits, interest, and all the rest—come to about $4 trillion. (These are very rough numbers.)
Public opinion polls routinely show that Americans have a distorted view of the level of business profits in our society. The man and woman on the street believe that corporate profits after tax account for about 36 percent of the price of a typical product. (See the box “Public Opinion on Corporate Profits” on the next page.) The correct number is closer to 7 percent.
"Public Opinion on Corporate Profits
What people think is a "reasonable" corporate profit - 26%
What people estimate corporate profit is - 36%
Actual corporate profit - 7%"
SOURCES: “Public Opinion Survey,” Reason-Rupe Public Opinion Survey
(Princeton, NJ: Princeton Survey Research Associates International, May
2013. The older poll was: “Public Attitudes toward Corporate Profits,” Public
Opinion Index (Princeton, NJ: Opinion Research Corporation, June 1986)
A 2013 public opinion poll found that the average American thought that corporate profits after taxes amounted to 36 percent of sales for the typical manufacturing company. At the time, the actual profit share was closer to 7 percent! Interestingly, when a poll years earlier asked how much profit was “reasonable,” the mean response was 26 cents on every dollar of sales—more than six times as large as profits actually were at that time"
--- Macroeconomics: Principles & Policy, Fourteenth Edition / William J. Baumol, Alan S. BLinder, John L. Solow (2020)
