Double taxation of corporate profits, first through the corporate tax on profits and later through the personal income tax on dividends, is likely to lead to:

Question

Quizplus · Accepted Answer

Double taxation of corporate profits creates a disincentive for corporations to pay dividends, which in turn can lead to less efficient investments. However, it can also encourage corporations to invest in more lightly taxed options, such as reinvesting their profits back into the company or issuing stock buybacks instead of dividends.

Double Taxation of Corporate Profits, First Through the Corporate Tax