Biology Forums - Study Force

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, b, and c

• a and b only

• a and c only

• b and c only

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