Consider the Following Methods of Taxing a Corporation's Income

question 150

Multiple Choice

Consider the following methods of taxing a corporation's income:
a. A flat tax, as opposed to a progressive tax, is levied on corporate profits.
b. A system whereby a corporation calculates its annual profit and notifies each shareholder of her portion of the profits. The shareholder would then be required to include this amount as taxable income for her personal income tax. The corporation does not pay a tax.
c. A system where the federal government continues to tax corporate income through the corporate income tax but allows individual taxpayers to receive, tax free, corporate dividends and capital gains.
Which of the methods above would avoid double taxation?

• A) a, b, and c
• B) a and b only
• C) a and c only
• D) b and c only

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Definitions:

Genetic Male

An individual with one X chromosome and one Y chromosome in the pair of sex chromosomes, leading to the development of male physical characteristics.

Genetic Female

Refers to individuals whose sex chromosomes are XX, typically associated with female sexual and reproductive anatomy.

Estrogen

A group of steroid hormones that play an essential role in the development and regulation of the female reproductive system and secondary sexual characteristics.

Testosterone

A type of steroid hormone essential for developing male reproductive organs and secondary sexual traits.