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Corporate Taxation

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Why should corporations not be taxed?

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Solution Summary

Corporate taxation is discussed very comprehensively in this explanation.

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1. The corporation is not a real person and only real persons should be taxed.
2. The corporation is already taxed in an indirect manner when it pays taxes on the goods produced or it pays sales tax.
3. The corporation provides an important and essential service to the society and so should not be taxed.
4. The taxing of corporations leads to double taxation, first the taxation that the corporation pays and the taxes that the shareholders pay when they receive their dividends. In other words the same income is taxed twice and that is not equitable.
5. The taxing of corporations is a discouragement to enterprise and business initiatives. The result is that the corporations that are taxed are less equipped to face ...

Solution provided by:
Hatim Baxamusa, MBA
Education
  • BSc , University of Calcutta
  • MBA, Eastern Institute for Integrated Learning in Management
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