Replies to post #108118 on Intel Corp (INTC)

[Elmer Phud]

Imagine a husband going home and handing his paycheck to his wife.

Some would claim that more taxes are due...

The wife gives an allowance to the children. More taxes are due...

[fastpathguru]

Take a single owner business. The earnings of the business are taxed but the owner is not taxed again when he/she takes distributions of those earnings.

In the case of a corporation, the corporation pays taxes on earnings, but when the owners (shareholders) receive some of those earnings as dividends, they are taxed again.

That's the cost of isolating corporate assets from the owners.

The owner of an unincorporated business really does own (and can spend as he pleases) the income, because it's HIS or HER income.

Owners/shareholders in corporations cannot simply spend the surplus cash of a corporation as they please... They have to pay themselves salaries, or grant dividends or shares, etc., requiring taxes be paid in each case.

Remember, "corporations are people!" Shareholders can't just steal from the incorporated person! (This may sound like sarcasm, but that's not my intent... It's the legal (not to mention etymological) foundation of the concept of "incorporation.")

OTOH, if a corporation STB's, shareholders aren't liable for corporate debt.

Don't mind betting your personal assets on your business? Go for it, and GOOD LUCK!

Want the reduced risk gained by incorporating? Pay the price and don't whine about it.

fpg