CORPORATIONS The reason for the corporation is to permit limited liability and f

CORPORATIONS

The reason for the corporation is to permit limited liability and fungibility of management and control. Like any organization that permits cooperation for gain without consumption of the commons produced thereby, the returns on corporations are higher than the returns on individual ownership. Scale makes a profound difference. Poor countries with low trust societies cannot form large corporations producing multiples of returns. But the income largely stays inside the corporations where it continues to produce returns. The problem is figuring out HOW to tax a corporation, since the state does not wish to kill the golden goose. Double taxation is the real issue. Corporations must either pay taxes OR distribute dividends that are taxed by the rate of individual income of the shareholders. (we do both today which is one of the very bad things we do.