Just wondering how tax works on companies in the US.
In Australia, a company pays 30% tax on profits.
On money retained to grow the business:
Any money re-invested by the company is after tax is paid
On dividends:
For any money paid out as dividends, if the shareholder is an Australian resident they get a tax credit for the 30% paid in company tax. So for example, when you get $70 in dividends, you have essentially earned $100 and already paid $30 tax.
Just wondering what happens in the US?
1. What is the company tax rate?
2. Assume the company still pays tax on money they want to re-invest into the business?
3. Do you pay more or less than this for the amount paid out as dividends?