Is double taxation “fair” to corporations and shareholders?

Corporations expands,merge,splits,sell & buy shares.Why they do not give benefit to shareholders?

• This has reference to Forb's list of millioners.It keeps expanding.I wonder co.s like Microsoft,Google,IBM,Intel etc.why they are giving only meagre benefit to shareholders with whose money they are dong business ! They give amass of money to their employees and CEOs.Is there no law any?

• Answer:

  Ashok, Your question is certainly interesting but does not reflect an understanding of business and taxes in the U.S. For one thing, dividends until recently were heavily taxed both to the corporate payer and to the shareholder recipient. The double taxation at high tax rates is not good efficient use of capital. Secondly, the shareholders of these company's are the owners of the businesses and if they wanted more dividends they could vote this for themselves. Thirdly, if the company can reinvest the funds at a better rate of return than the shareholders can, the best course of action is for earnings to be retained and reinvested inside the business. Companies you reference MSFT, GOOG, INTC generally have this ability and fit this practice. Best, Dana B.