Suppose James and John own a share in a corporation facing a corporate tax rate of...

 

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Suppose James and John own a share in a corporation facing a corporate tax rate of 50%. James and John each face marginal tax rates of 20% and 50% respectively. For every $2 in earning by the corporation: a. How much is paid out to James and John, each? b. What is the effective tax rate on James and John if the corporate and personal income tax systems are not integrated (no dividend tax credits)? Show your work. c. What is the effective tax rate on James and John if the corporate and personal in- come tax systems are partially integrated (dividend tax credits at the individual's marginal tax rate)? Show your work. d. What is the effective tax rate on James and John if the corporate and personal income tax systems are fully integrated (dividend tax credits at the corporate tax rate)? Show your work. e. Who benefits more from full integration? Suppose James and John own a share in a corporation facing a corporate tax rate of 50%. James and John each face marginal tax rates of 20% and 50% respectively. For every $2 in earning by the corporation: a. How much is paid out to James and John, each? b. What is the effective tax rate on James and John if the corporate and personal income tax systems are not integrated (no dividend tax credits)? Show your work. c. What is the effective tax rate on James and John if the corporate and personal in- come tax systems are partially integrated (dividend tax credits at the individual's marginal tax rate)? Show your work. d. What is the effective tax rate on James and John if the corporate and personal income tax systems are fully integrated (dividend tax credits at the corporate tax rate)? Show your work. e. Who benefits more from full integration?

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aJames and John are paid out in 25 ratioas the marginal taxr ates paid by them is in the same ratio ... View the full answer