3 ms·
> This would change if the government stopped taxing retained earnings. No it wouldn't, because > the money is still at risk (from a shareholder’s point of vi
by ta1243 1y ago
> This would change if the government stopped taxing retained earnings.
No it wouldn't, because
> the money is still at risk (from a shareholder’s point of view) if something bad happens to the company (lawsuit or market problem).
- warkdarrior 1y agoIt would definitely change, because a shareholder could then take a loan against the non-taxed retained earnings they are owed. So then it comes down to whether the tax is higher or lower than the loan interest (adjust for the risk you mentioned).