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You inherited 500 shares of IBM stock from your Great Aunt Mabel. As you contemplate selling the shares, your accountant informs you that the company pays a generous dividend, and advises you to start watching the firm's profits. When you are awarded the first dividend, you learn that it is considered a source of income and you will be taxed on that amount. You find this bothersome because the firm paid the dividend from after-tax profits (these dollars were already taxed). This phenomenon is called _________.
a. corporate taxation adjusting.
b. double taxation.
c. shareholder tax penalty points.
d. entitlement tax.

Respuesta :

TomShelby

Answer:

b. double taxation.

Explanation:

This phenomenon is extended to other areas of the economy as well.

A car may be subject to determinate taxes which makes a portion of their final price. (sales tax and other)

This price with taxes its latter use to determinate the wealth and then, the owner may have to pay taxes based on a price who already have taxes thus, paying taxes on the taxes.

The double taxation should be avoided to make investment more reliable and increase people trust in the well-being of their government.

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