The statements below refer to the corporate income tax in the United States. Det

Question

The statements below refer to the corporate income tax in the United States. Determine if each is true or false and place it in the proper bin. Jump to... Calculator uestion 7 of 19 Sapling Learning The statments below refer to the corporate income tax in the United States. Determine if each is true or false and place it in the proper bin. True False e economists consider the corporate income tax a "double tax" and argue that this is problematic. Corporate income tax brackets range from 15-35%. The corporate income tax is a progressive tax. Corporations are never taxed at the highest rate because of the Corporate income tax brackets range from 1- existence of many tax loophol

Explanation / Answer

1. The statement is true. Corporate income tax is often referred to as double tax.Under the principles of accounting there is a very basic principle which gives a very important direction in how these transactions are recorded - The seprate entity principle. The principle states that business owner is seprate from the business.So when a corporation earns profit. They are charged as per the norms of corporate tax and if the corporation decides to give away the remaining amout as dividends then those dividends are also seprately taxed under personal income taxes. Many economists argue that this may not be a good practice and the same income is charged twice and hence discourages businesses to give out dividends or take up equity in capital structure.

2. True.Corporate income tax is in the bracket of 15-35% in US.

3. Ambigous. This depends on the incidence of tax. If the incidence is on the firm owners then it is progressive and if it is on the consumers and emloyees then it is regressive.

4. True. Corporations are never taxed the highest. All the firms try to minimise the tax laibility they are supposed to pay out and thier way is through loopholes present in the system. In India, the provision of Minimum alternate tax came into being when many companies declared themselves as 0 tax companies.

5. False . Corporate income tax bracket is 15-35%  

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