Not all corporate profits are required to be paid out as dividends, many companies hold their profits for years or even decades.hanelyp wrote:A corporation is a collective of the share holders, and properly derives rights as such. Under my plan dividends paid to shareholders would be taxable income. To tax corporate income on top of that is double taxation, and a penalty for organized private cooperative economic activity.
Only taxing them when they leave the corporation therefore allows for taxes to be avoided completely.
Consider if you will the perfectly legal and common practice case of the individual shell holding company. The only purpose of this corporation is to hold assets for an individual or family until such time as they are needed.
You assign assets to this corporation, it owns all your profit-bearing investments, and you only pull out what you need to when you need it.
This shields your dividend and interest income in excess of your needs completely from taxation if corporations are not taxed.
I need to get one of those >.>