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"double taxation" is not an entirely accurate/honest term. corporations are "persons" and we tax money flowing to people. it's taxed just like everyone else. wh
by clairity 10y ago
"double taxation" is not an entirely accurate/honest term. corporations are "persons" and we tax money flowing to people. it's taxed just like everyone else. what's odd is that it has a different, and largely preferential, tax treatment relative to other persons.
- kemiller 10y agoIt's perfectly accurate and honest from any normal practical point of view. If I run my freelancing business through a C corp I have to pay corp taxes and dividend taxes or capital gains. It's taxed twice, and at a higher level in aggregate (assuming I'm making more than 75k) than if I'm just a sole proprietor. That's exactly why LLCs and S Corps exist, of course, and there are other ways around it, but it's still the case that the exact same amount of underlying economic activity happens, but one case is taxed more than the other.