Double taxation means that the:

Question

Quizplus · Accepted Answer

Double taxation refers to the situation where the same income is subject to tax twice. In the case of corporations, it means that the corporation pays tax on its earnings and then the shareholders pay tax on any dividends received. This is because the corporation is a separate legal entity from its shareholders, so its earnings are taxed separately from the personal income of shareholders. Option B is not correct because unemployment taxes are not typically considered part of double taxation. Option C is partially correct, but it does not capture the full meaning of double taxation. Option D is incorrect because there is no fixed relationship between the corporate tax rate and the individual tax rate for shareholders.

Double Taxation Means That The