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The analysis I’m doing is trying to identify where the revenue that flows through a corporation ends up. I’m not focused on what is happening with the recipients. Part of the revenue is used to buyback shares and that money flows to the asset owners, while the company gains back a portion of its outstanding shares.

I’m admittedly a novice on the accounting practices of national accounting. But I am curious why the “Owners v. Corporations” chart has rental income on the owners side, when it can technically include landlords who do not have rental income travel through a corporation. If rental income is counted on the assumption that corporations rent some of their properties to others, this is how the BEA explains the definition:

Rental income of persons is the net income of persons from the rental of property. It consists of the net income from the rental of tenant-occupied housing by persons, the imputed net income from the housing services of owner-occupied housing, and the royalty income of persons from patents, copyrights, and rights to natural resources. It does not include the net income from rental of tenant-occupied housing by corporations (which is included in corporate profits) or by partnerships and sole proprietors (which is included in proprietors’ income). Like other measures of income in the national income and product accounts (NIPAs), rental income of persons measures income from current production and excludes capital gains or losses resulting from changes in the prices of existing assets.

If the intention is to naively look at the flow of profits (before economics defines what is rent or not), your case can be made with undistributed v. dividends. In the United States, at least, the ratio of dividends/undistributed profits has tended to increase since the 1980s.

  • This reply was modified 2 days, 11 hours ago by jmc.
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