Actually, you don’t even need to tax corporate profits in this scenario. Just tax when actual people get money—company makes more profit, eventually it needs to distribute that profit to shareholders (dividends) or employees (higher wages for the non-displaced). Tax at that point, not along the way.
I dunno, it’s hard enough trying to determine if and where profit was made, in order to tax it. If we didn’t tax profits and only distributions then there would be no taxes to collect. Companies and individuals would all claim that any profit are being retained for future investment or for hoarding and not actually distributed to owners. That is why we tax non distributed retained earning.
Actually, you don’t even need to tax corporate profits in this scenario. Just tax when actual people get money—company makes more profit, eventually it needs to distribute that profit to shareholders (dividends) or employees (higher wages for the non-displaced). Tax at that point, not along the way.
I dunno, it’s hard enough trying to determine if and where profit was made, in order to tax it. If we didn’t tax profits and only distributions then there would be no taxes to collect. Companies and individuals would all claim that any profit are being retained for future investment or for hoarding and not actually distributed to owners. That is why we tax non distributed retained earning.