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Rerun: Ep6 "Can (and Should) Corporations Be Taxed?" with Larry Summers

All Else Equal: Making Better Decisions

NOTE

Taxation on Profit Income and Debt Payments

Countries, including the United States, tax profit income from entities like pension funds and universities due to practicality reasons. Tax collectibility is focused on corporate profit income as it is a feasible point for taxation. There is a distinction made in finance classes that interest payments are not seen as a cost of doing business and tax deductibility from interest payments distorts the market by favoring debt financing over equity financing.

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