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S-corps are completely legal and vilifying them is smoke and mirrors. obastard and crew are once again twisting the truth by insinuating that no taxes are paid on S-corp earnings... S-corps pay tax at the top marginal tax rate of the owners, right now, the rate is similar to corporate taxes. The difference is that the earnings are not taxed twice like they are for C-corp earnings.

If you own C-corp stock and they are paying a dividend you should question the management’s ability. A C-corp is supposed to reinvest all their earnings profitably and grow the company. If they don’t the earnings are taxed at 35% corporate tax rate and then also at the current dividend tax rate to the share holders.

“So in this country we have partnerships, we have S corps, we have LLCs, we have a series of entities that do not pay corporate income tax. Some of which are really giant firms, you know Koch Industries is a multi-billion dollar businesses. So that creates a narrower base because we’ve literally got something like 50 percent of the business income in the U.S. is going to businesses that don’t pay any corporate income tax. They point out [in the report] you could review the boundary between corporate and non-corporate taxation as a way to broaden the base.”