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Between Scylla And Charybdis: Taxing Corporations Or Shareholders (Or Both), David M. Schizer
Between Scylla And Charybdis: Taxing Corporations Or Shareholders (Or Both), David M. Schizer
Faculty Scholarship
The United States taxes both corporations and shareholders on corporate profits. In principle, the United States could rely on only one of these taxes, as many commentators have suggested. Although choosing to tax the corporation or its owners may seem like taking money from one pocket or the other, this Essay emphasizes a key difference: These taxes prompt different planning. Relying on one or the other mitigates some distortions and leaks, while exacerbating others. As a result, choosing which to impose is like navigating between Scylla and Charybdis.
In response, this Essay recommends using both taxes for three reasons. First, …