I'm not understanding how that's not double taxation

Money --tax-- Shopkeeper

Money --tax-- Bank --tax-- Owner

It is, the point of the cartoon is the concept of double taxation is stupid.

every time you make a withdrawal from an atm it should be taxed around 30%. i mean thats basically just the bank GIVING YOU FREE MONEY and we cant have that

If the government thought they could get away with this, they would. Be careful about giving them ideas.

The point of the cartoon is to confuse people who don't know much about tax into believing that the concept of double taxation is stupid.

What do you mean by this? You mean double taxing is stupid or complaining about double taxing is stupid?

I understand the concept of double taxation. Explain it to me in a way that makes it sound less stupid to complain about dividends being double taxed.

zomg

The point of the cartoon is that rich peeps have chosen an instance of a common occurrence and made it seem as if that particular instance is notable.

People don't like paying taxes. They like paying them twice even less.
Well, it is notable in that it's the only time it happens.

I am not a tax historian, but I'm guessing the inheritance and gift taxes were out into place to deal with rich folks finding ways around paying other taxes. Just a guess though.

I should have been more clear. Explain how dividends are double-taxed in a way that makes complaining about it seem less stupid.

There a lot of ways to explain it, but maybe the simplest is that investments in corporate equity face a much higher effective tax rate than economically similar investments in corporate debt or partnership equity.

You can also consider that the corporate tax raises a considerable amount of money. Since taxes must fall on individuals, and all individuals have their income taxed on an individual basis, the corporate tax must be a double tax on somebody, though economists argue about who exactly pays it.

lol ok brah

and, of course, thanks to Citizens United we all know that corporations are people

Look at the shopkeeper example above. Let's say the shop is a partnership. At the end of the year, it has $1000 profit per partner to disburse. Each partner will get $1000 and then pay income taxes on it, let's say 33% for simplicity. So everyone gets $667 after taxes.

If the shop is a corporation it gets double taxed. It has $1000 profit per shareholder and the corporation has to pay income taxes, again we'll say 33%. So now the corporation only has $667 to distribute. And now the shareholders have to pay the same income tax on the $667. So now everybody has $447 after taxes.