Effects of Taxation on Individual Investment and Corporate Financing

THE purpose of this article is to indicate briefly some of the ways in which corporate and individual income taxation, operating both separately and in conjunction with each other, may be expected to influence the relative attractiveness to investors of different forms of investments and the relative costs to business of different forms of financing. The fact that income arising through corporate stock ownership is taxed once to the corporation and again to the individual to the extent that it is paid out in dividends, is frequently referred to as discriminatory and repressive double taxation. Much of the analysis which follows is related to the joint effects of the two forms of income taxation. Some of the probable influences on the costs of financing, however, are related almost entirely to the corporation income tax and are considered from that standpoint.1

Attractiveness · Business · Corporation · Dividend · Economics · Income tax · Investment (military · Public economics · Stock (firearms · Corporate Taxation and Avoidance · Finance · Fiscal Policy and Economic Growth · Taxation and Compliance Studies