Spending corporate money on non corporate expenses would be fraud. You can’t do that regardless of the tax rate.
What this does allow for is carrying over profits from year to year for small businesses that operate on a cash accounting basis. Which in turn allows multi year planning without taking a 22% hit.
Never extracting the profits would lock them away in the corporation with no means of spending them. It’s definitely a possibility, but it’s not really an issue for public corporations because the shareholders wouldn’t want a company just sitting on cash.
> Spending corporate money on non corporate expenses would be fraud
Where does it say that? And what are non-corporate expenses anyway? Keeping the founder happy surely is a corporate expense otherwise this guy would rot in prison
> but it’s not really an issue for public corporations because the shareholders wouldn’t want a company just sitting on
What if my company just held on to the cash but every share had some ownership of that cash. Sure, it probably wouldn't trade at par, but it would also be silly for it to trade at the payout rate considering it's non taxable.
Could the paper backed by my corporation become a new currency?
What this does allow for is carrying over profits from year to year for small businesses that operate on a cash accounting basis. Which in turn allows multi year planning without taking a 22% hit.
Never extracting the profits would lock them away in the corporation with no means of spending them. It’s definitely a possibility, but it’s not really an issue for public corporations because the shareholders wouldn’t want a company just sitting on cash.