Double Taxation on the Same Income?

Many of you blessed souls who have had the luxury of dwelling on subjects such as corporate tax and taxes on dividends will no doubt be familiar with the axiom promulgated in textbooks stating that the profits of a corporation have been taxed twice - once at the corporation level and the second time at dividend distribution to the shareholder.

To effectively swallow this ejaculate, one must erase all thoughts of the concept of separate legal entity between a corporation and its shareholders.  In other words, you must believe that the corporation is nothing more than a bigger extension of the shareholder, the way penis extensions would work.

Other confusing ideas that lead you to question how many different shareholders with different shareholding percentages could be represented by a singular corporation should be obliterated from your thoughts.  Otherwise you would not be able to make the justification for the unfairness of double taxation.

Also, you must ignore the fact that you as a shareholder have no say whatsoever in the decision to issue dividends and its amount issued.  The board of directors who make that decision should be transparent in your belief that the shareholder has every right to every penny of the profit whenever they so desire.

Another confusing idea that you need to discard, is the fact if there was no separate legal entity, the entire profit of the corporation that would belong to the shareholder, would become taxable to the shareholder regardless of how much dividend was distributed.  As this would result in a significantly larger tax payable to the investor so it is wise to pretend that this argument does not exist.

Despite the obscure notion that there is a difference between the shareholder's investing activity and the corporation's operating activity that leads to two separate incomes for two separate entities, you must remain steadfast in repeating the mantra that it is the same income, much like urine is the same water that a person drinks when they piss into the mouth of another.

Forget the dizzy emotions of patriotism, of contributing to the country you love.  After all, this is your money we're talking about.  So keep on believing that it is unfair when investors pay taxes on dividends earned from investments when corporations are taxed when they make profits because they aren't really separate legal entities.

Accounting Standards Update 2011-12

I have recently decided to become a masochist and plunge into reviewing the latest update put out by the prestigious and beloved Financial Accounting Standards Board.

Within seconds, I was overcome by a very strong emotion.  The last time I experienced something so intense was when I was driving 4 hours to get home in the evening and had to pull over into a McDonald's carpark to snooze.

It was with great effort that I stopped myself from scrolling up and down the Adobe PDF file sufficiently to read the crucial lines that informed me what the esteemed gentlemen of high accountancy were trying to convey.

Before giving it all away, I would like to record for posterity the insanity contained in this update that I downloaded from their precious website.  I plowed past the summary pages into the Introduction and was immediately faced with what seemed to be a forest of track changes throughout the document, that had not yet been accepted.

This was also punctuated by bolded and underlined words within a labyrinth of paragraphs that seemed to lead me into the valley of darkness.  Welcome to my ADHD nightmare.  It didn't help that a lot of the crossed out text were replaced for cosmetic reasons.  There were also arrows littered throughout the pages that served as brilliantly as detour signs placed by the Coyote in the Road Runner TV series.

Given that the message of the entire missive basically said "Remember that update we issued in May 2011?  Well, fuck that.", it completely baffles me why they even bothered to include illustrations of financial statements with details of comprehensive income with corrections to the numbers used.

I guess I should be thankful.  After all, it could have been something I might actually have to work at understanding.