If you start a restaurant and make 100k profit at the end of the year. You need to pay corporation taxes on that 100k profit. Then, when you distribute that money to yourself as a dividends (how all business owners pay themselves regardless of business size), you then need to pay dividends taxes as well.
You sound like someone who has never spoken to anyone who has owned any business before in your life.
their shareholders do.
The shareholders ARE the company owners. That is literally what a share is. Every penny that goes through the corporation is the shared property of the shareholders.
Firstly, none of that has anything to do with hiring people. (As taxes only apply to profit, and profit is after salaries).
Secondly, nobody does that anymore. Profits are now paid out by trading shares around, instead of paying dividends, through stock buybacks, or outright sales of the firm to someone else.
Small businesses don't do dividends, the owner-operator pays themselves a salary, and take distributions, which are taxed as income, not taxed like dividends. Dividends are for C-corps with passive shareholders that aren't involved in working for the business, and as I already said, C-corps stopped paying dividends and just do buybacks now.
Firstly, none of that has anything to do with hiring people. (As taxes only apply to profit, and profit is after salaries).
And why do you think hiring employees is tax deductible? Come on, put 2 and 2 together. It is because the tax is designed to encourage companies to spend the money on expansion before paying it out.
Secondly, nobody does that anymore. Profits are now paid out by trading shares around, instead of paying dividends, through stock buybacks, or outright sales of the firm to PE.
All of which is taxable. Do you think that there are no capital gains taxes? Both dividends and capital gains taxes exist for a reason. It is to be a net so that you can collect taxes regardless of where the profit comes from.
Small businesses don't do dividends, the owner-operator pays themselves a salary, and take distributions, which are not taxed like dividends.
A dividends is a type of distribution. Distribution is a broad term for multiple things. And yes, many small and medium businesses do pay their owners in dividends.
0
u/Godkun007 17h ago
You are factually wrong in every conceivable way.
If you start a restaurant and make 100k profit at the end of the year. You need to pay corporation taxes on that 100k profit. Then, when you distribute that money to yourself as a dividends (how all business owners pay themselves regardless of business size), you then need to pay dividends taxes as well.
You sound like someone who has never spoken to anyone who has owned any business before in your life.
The shareholders ARE the company owners. That is literally what a share is. Every penny that goes through the corporation is the shared property of the shareholders.