EXAMPLE 2-6: Vog is in the process of setting up a diving business.His conservative projections suggest that he will earn a 12% pre-tax return on his $200,000 investment. Vog is in the 35% tax bracket for individuals and he projects that the individual capital gains and dividend rates will be 20% and corporate rates will be 15% when he starts realizing a return. From an explicit tax perspective, is Vog better off organizing as a C or a flow-through entity? Why?