Corporate Taxation Debate
The cluster revolves around debates on why corporations are taxed on profits separately from individuals taxed on income, questions of double taxation when profits are distributed as dividends or capital gains, and arguments for taxing only individual recipients instead of corporate entities.
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Is there a reason corporations even pay taxes, versus just taxing individuals once they get money distributed to them from the corporation?
Please help me understand why is it okay to tax people on income but not corporations?
Why do we even tax corporations instead of just the income that its owners receive from the corporation?
First off>What remains after the corporate income tax usually winds up taxed just as your income isIn the US at least, capital gains are taxed at a different, and lower, rate than individual income.Secondly, how do the rest of your points not apply to individuals as well. Yes the company makes money and it's taxed, and then it's paid out to shareholders and they are taxed. When I buy food at the grocery it's not some special type of dollar that can't be taxed beca
You're missing the point hard. You can still tax the corporation by taxing everyone who earns income from it. You just don't tax the business entity itself.
People are taxed on income (with only certain deductions), corporations are taxed on profits. If corporations were taxed on income, lots of industries would become unviable, creating huge distortions in the economy. However, people generally have the same expenses (food for example), so at least it’s somewhat fair. It gets unfair and distortive, for example, when health insurance bought for you buy a company is deductible (to the company) but health insurance you buy on your own isn’t.If corp
Note that the corporate income tax is on profit, not revenue. Personal income tax is on revenue, minus some limited deductions.Money reinvested or paid to employees is not taxed. Furthermore, corporations pay no sales or income tax on value added inside the corporation for the benefit of the corporation, unlike if the corporation were split into several independent companies.
Why tax a corporation's income at all when you can tax its shareholders income instead?
Corporate taxation is just double taxation anyway: http://en.wikipedia.org/wiki/Double_taxation. Why not just tax individuals?
It’s weird that individuals are taxed on revenue but corporations are (usually?) taxed on profit.