A distribution is the paying out of profits to owners of a business. Distributions must be paid in proportion to ownership share: if you own 50% of a company y

A distribution is the paying out of profits to owners of a business. Distributions must be paid in proportion to ownership share: if you own 50% of a company you must be paid exactly 50% of all distributions. Distributions are not subject to payroll tax, which is a nice benefit of them. Pass-through entities mean that the tax liability for the entity "passes through" to the owners of the company, so the company proper does not have a tax liability, rather the owners do. When I am God Emperor, all company dividends will be deductible against corporate taxes, to encourage companies to return profits to the owners in the form of dividends. This would better align the c-suite and "owners" in a sustainable, cashflow based relationship, much closer to the LLC model. It would also make stock ownership more attractive for poor people, since the income would be taxed at a lower rate for them than for rich people.