Introducing Corporate Profit Freedom Day beta 0.1

The Corporate Profit Freedom Day (CPFD) project is intended to be an open one, in which the way CPFD is calculated is open and public.  It is available for scrutiny and open to constructive critique.  In fact, as noted, it is still is a beta (preliminary) form, so it is fully intended that this statistic, and the date on which CPFD is celebrated, will change as the method of calculating it is improved.

So, in that spirit, here is how the beta CPFD 0.1 is calculated:

1. "Total Individual Income" is calculated as the sum, from the Bureau of Economic Analysis (BEA) Table 1.10 "Gross Domestic Income by Type of Income", of (A) "Compensation of employees, paid", (B) "Proprietors' income with inventory valuation and capital consumption adjustments" and (C) "Rental income of persons with capital consumption adjustment".
2. The "Percent of Income Going to the Richest 1%" is from "Top Incomes in the Long Run of History" by Emmanuel Saez Tony Atkinson and Thomas Piketty, revised January 2010, forthcoming Journal of Economic Literature. (Data [Excel]).  Since the latest numbers from this source are to 2007, the 2007 numbers are used from the current year.
3. The "Income for Wealthy Individuals" is (1) times (2).
4. "Total Corporate Profit" is calculated as the sum (3) and "Profits after tax with inventory valuation and capital consumption adjustments" from the BEA Table 1.10.
5. "Total Base Income" is calculated as the sum of (1) and "Profits after tax with inventory valuation and capital consumption adjustments" from the BEA Table 1.10.
6. "Percent of Base Income Going to Corporate Profits" is calculated by dividing (4) by (5).
7. The "Number of Calendar Days Going to Corporate Profits" is calculated by multiplying (6) by the number of calendar days in the year.
8. By counting, from January 1st, the number of days calculated in (7), the date on which "Corporate Profit Freedom Day" occurs can be determined.  This is CPFD beta 0.1

And, to be more specific, (8), above, is to be referred to as CPFD-C, based on the calendar year.  A separate CPFD-W, based on a typical number of annual weekdays, 260, is also calculated, but the standard Corporate Profit Freedom Day is to be considered the CPFD-C.

Included in this method of calculating corporate profits is an estimate of the share of various forms of individual income that go to the wealthiest 1%.  That is because the purpose of Corporate Profit Freedom Day is to calculate how much of the year the working people of the United States labor to support both the accumulated wealth and lavish lifestyles of those with control of the wealth and power in our country.  To only count the booked profit of corporate entities would, as one can see from the statics calculated, miss the vast bulk of the true profits in the nation.

Another note is that CPFD is calculated using the most up-to-date statistics, which means that each year's CPFD is actually calculated from the previous year's final numbers.  A future version of CPFD may include a method of imputing the trends in progress for a year to get a more up-to-date picture, but beta 0.1 version relies on the more stable previous-year method.

Once again, constructive critique of the method of calculating Corporate Profit Freedom day is welcome and encouraged as the work now begins on the next, more refined, version of the CPFD statistic.

Thanks!