And a subtlety here that you know, but not all of the readers do:
If an investment counts as an asset, it still doesn't reduce the corporations' tax. Only expenses do.
Small corporations make the tax problem more understandable. Consider a person who owns (with a few others, perhaps) a small company.
If the company makes $100 profit, it pays corporate income tax to the US (and to the state, in almost all states) that will be somewhere typically in the $30 to $40 range. More in California, of course. ];-/
Of the amount left, let's say $60, the person receiving this money as a dividend pays personal income tax on it again! Often at a higher percentage rate. So, she takes home perhaps $40 of the $100 of profit.
Dividends are already taxed once, before the second tax paid by the recipient. The government is double-dipping.
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timeasmymeasure
no subject
Date: 2003-01-10 09:58 am (UTC)If an investment counts as an asset, it still doesn't reduce the corporations' tax. Only expenses do.
Small corporations make the tax problem more understandable. Consider a person who owns (with a few others, perhaps) a small company.
If the company makes $100 profit, it pays corporate income tax to the US (and to the state, in almost all states) that will be somewhere typically in the $30 to $40 range. More in California, of course. ];-/
Of the amount left, let's say $60, the person receiving this money as a dividend pays personal income tax on it again! Often at a higher percentage rate. So, she takes home perhaps $40 of the $100 of profit.
Dividends are already taxed once, before the second tax paid by the recipient. The government is double-dipping.
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