S-Type Corporations Have Difficulty in Accumulating Earnings Because Their Profits

question 88

True/False

S-type corporations have difficulty in accumulating earnings because their profits are subject to double taxation.

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Definitions:

Average Tax Rate

Average Tax Rate is the proportion of the total income paid as taxes, calculated by dividing the total taxes by the total taxable income.

Total Taxes

The combined amount of all the taxes imposed by a government on an individual or business, including income tax, property tax, sales tax, etc.

Average Tax Rate

The proportion of total income that is paid in taxes, calculated by dividing the total tax paid by the total income.

Total Income

The sum of all earnings obtained by an individual, household, or firm, including wages, salaries, profits, rents, and other forms of revenue.