Purchase Solution

Eliminating corporate tax affecting excess burden

Not what you're looking for?

Ask Custom Question

Suppose the corporate income taxes were eliminated and corporate income was allocated to shareholders on a pro rata basis according to their proportion of outstanding stock. How would such a change in tax policy affect the excess burden and incidence of the tax, assuming that all forms of investment income are included in a comprehensive income tax base?

Purchase this Solution

Solution Summary

This solution discusses the consequences of corporate income taxes being eliminated and allocated pro rata to shareholders. I discuss how a chance like this would affect the excess tax burden and incidence of tax under the assumption that all forms of investment income are included in the comprehensive income tax base.

Solution Preview

Here is a discussion and references for your question, which you can use for studying purposes. The discussion is to be used for studying purposes only and as a discussion of the topics involved in your question.

If the corporate taxes were eliminated and corporate income tax was allocated on a pro rata basis to shareholders, the company would be more likely to reinvest any possible dividend payouts based ...

Purchase this Solution


Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.

Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.