"Double taxation" means:
A)If stockholders decide to sell their shares,they are subject to paying twice the amount of taxes on any capital gains.
B)As the owner of the company,you pay twice the amount in employment taxes on yourself,as you do on your employees.
C)Corporations pay taxes on their profits.If they distribute after-tax profits to the stockholders,the stockholders also pay taxes on the distribution.
D)If the corporation doubles its profits from the previous year,the firm's tax rate the percentage it pays in taxes)will also double.

Question

Quizplus · Accepted Answer

Double taxation refers to the situation where a corporation is taxed on its profits, and then when the profits are distributed to the shareholders, they are taxed again. This is because the profits are taxed at the corporate level and then at the individual level for the shareholders. Option A is incorrect because capital gains taxes are not subject to double taxation. Option B is incorrect because employment taxes are not related to ownership of a company. Option D is incorrect because tax rates do not double based on the company's profits.

"Double Taxation" Means