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Analysis

A trip through the local strip mall might suggest that corporations are taking over America—everywhere you look, you'll see Starbucks and Walmarts; the locally owned "mom and pop" business might start to seem like a dinosaur. But, as is often the case, the statistics tell a different story. The number of sole proprietorships and partnerships (based on the number of tax returns filed) increased by more than 53% between 1990 and 2006; the net income earned by this sector of the economy increased by almost 500%. In comparison, the number of corporations increased by 57%; their net income increased by 425%.

But corporate receipts accounted from more than 80% of all dollars earned in 2006.

Does that mean that America’s small business community is growing as fast as its corporate sector? Not exactly. Sole proprietorships, partnerships, and corporations are distinct forms of business organization—and size is not really the defining feature of any of them.

Table Legend: NF = Nonfarm Proprietorships, P = Partnerships, C = Corporations

Number of Firms (000s)Revenue ($USD, Billions)Net income ($USD, Billions)
NFPCNFPCNFPC
199014,7831,5543,71773154110,91414117371
199115,1811,5153,80371353910,96314221345
199215,4951,4853,86973757111,27215443402
199315,8481,4683,96575762711,81415667498
199416,1541,4944,32479173212,85816782577
199516,4241,5814,74780785413,969169107714
199616,9551,6544,6318431,04214,890177145806
199717,1761,7594,7108701,29715,890187168915
199817,4091,8554,8499181,53416,543202187838
199917,5761,9374,9369691,82918,009208228929
200017,9052,0585,0451,0212,31619,593215269928
200118,3382,1325,1361,0172,56919,308217276604
200218,9262,2425,2671,0302,66918,849221271564
200319,7102,3755,4011,0502,81819,755230301780
200420,5912,5475,5581,1403,14221,7172483851,112
200521,4682,7645,6711,2213,71924,0602705461,949
200622,0752,9475,8411,2784,13126,0702786671,933

(source)

Why It Matters Today

What do corporations do for you?

  • Provide employment: corporations provide the majority of American jobs
  • Provide things you want and need: the vast majority of the stuff you consume is produced by corporations

Sometimes, a Song Says it Better: 9 to 5, by Dolly Parton

Dolly says better than anyone else why working 9 to 5 can be a grind….depending on the boss for a promotion.

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