The Federal’ government collects a wide. variety of other taxes, some of which are shown in Table 16-3. The corporate income tax is a tax on.the profits of corporations. The top federal corporation tax rate in 1999 was set at 35 percent of corporate profits. The corporation income tax is heavily criticized among economists. Some oppose this tax, arguing that the corporation is but a legal fiction and should not be taxed. ,By taxing first corporate profits and then the dividends paid by corporations and received by individuals, the government subjects corporations to double taxation. Because of double taxation, corporate production is the most heavily taxed sector of .the economy, a fact that may discourage investment in this dynamic sector.
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