When evaluating the taxation of dividends in isolation,it is easy to overlook the double taxation of saving.

Question

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Double taxation of saving refers to the fact that income is taxed at both the corporate level and the individual level. In the case of dividends, the income is first taxed at the corporate level as corporate income tax, and then again at the individual level as income tax on dividends received by shareholders. This double taxation reduces the after-tax return on saving and investment.

When Evaluating the Taxation of Dividends in Isolation,it Is Easy