Nettie's Knits,Inc.paid taxes on its net income then distributed part of the earnings as dividends to investors.These investors paid tax on the dividends they received.This practice is know as:

Question

Quizplus · Accepted Answer

Double taxation refers to the fact that corporate income is taxed at the corporate level, and then again when it is distributed to shareholders as dividends and they pay taxes on those dividends at their own individual tax rates. This is a common practice in many countries, including the United States.