Explore BrainMass
Share

Explore BrainMass

    Eliminating corporate tax affecting excess burden

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    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?

    © BrainMass Inc. brainmass.com October 10, 2019, 5:22 am ad1c9bdddf
    https://brainmass.com/economics/income-distribution/eliminating-corporate-tax-affecting-excess-burden-502917

    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 ...

    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.

    $2.19