Realizing common prosperity requires a proper understanding and handling of the relationship between economic growth and income distribution. This paper matches the economic growth target data of cities above prefecture level and the data of A-share listed companies from 2005 to 2021 to empirically study the impact of local economic growth targets on the corporate labor income share. The results show that high economic growth targets significantly reduce the share of corporate labor income. Further tests show that local officials intervene in corporate decision-making and regional markets to achieve economic growth targets, exacerbating overinvestment in corporate capital factors and increasing corporate monopoly profits, which serve as the important paths for local economic growth targets to reduce corporate labor income shares. Moreover, local economic growth targets have a more pronounced effect on reducing the labor income share of firms that have stronger capital-labor substitution effects and are subject to a greater degree of government intervention. Overall, this paper enriches the literature on the economic effects of economic growth targets and the factors affecting the labor income share of enterprises, and has policy implications for the management of local economic growth targets, the appraisal and promotion mechanism of local officials, and the promotion of the strategic goal of common prosperity.