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But why? Double taxation of the same group of people with the same behaviors is equivalent to a higher tax. So why complicate matters? I guess you're suggestin

But why? Double taxation of the same group of people with the same behaviors is equivalent to a higher tax. So why complicate matters? I guess you're suggesting that it's a means to tax the special privilege of incorporation (and the protection it offers to investors). But that seems like a bad reason. Again, why not just tax the investors directly for the privilege?

dllthomas 11y ago
"Double taxation" is actually taxing two different - though related - events: The first is when the company makes profit, whether it is distributed to shareholders or not. The second is when the shareholders receive their income. If we did away with the first of these and raised the rate of the second, companies would no longer be paying any taxes on money they accumulate without disbursing. This would make them comparatively less likely to invest it in the short term in ways they can write off. I'm not going to make any particular case here as to whether that's good or bad (and for whom) but it's clearly a change. Allowing companies to count disbursal of profits as an expense and raising the income tax on those receiving those funds would, I think, leave things more-or-less unchanged but that means there's also no particular reason to do it. It wouldn't simplify paperwork any - both corporations and individuals would still need to be accounting for their income and paying taxes.