hi dig,
Actually, tax would emanate from these organisations - via taxes on employees and taxes on dividends.
If their profits are not taxed, then they will have retained profits to figure what to do with.
More employees? - more tax on income.
Higher salaries? - more tax on income at higher rates.
More dividends? - more tax on investors.
More investment? - taxes on future employee or dividend income.
So I am avoiding double taxation by removing the tax on corporations rather than on investors.
Then I could reasonably tax dividend income at a level consistent with a single layer of taxation.
Trouble is, companies can move their profits to safe havens. So someone like Romney may claim double taxation if he is taxed on dividends. But in fact, the company's profits are concealed in the Cayman Islands. So instead of double tax, there may be no tax at all on his income or on the company from which it is derived.
| 