"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 taxation of corporate profits at both the corporate level and again at the individual level when distributed to stockholders as dividends. So, option C is the correct statement. The other options don't accurately define double taxation.

"Double Taxation" Means