“You are confusing dividend taxes with capital gains taxes. Capital gains are not distributed out of corporate income. Capital gains (or losses) are realized by the selling of investment assets.”
No, I was ignoring for simplicity the dividend tax. I was also using what Buffet said in the interview. HE said he only had to pay 15% on CAPITAL GAINS.
Mutual Funds do make distributions of both capital gains and dividends, so if the holding company owns mutual funds I would assume that mechanism would also be available, but again, I was just relying on what Buffet said.
Is it possible that Buffet is equally confused about capital gains and payroll taxes? He did claim that his secretary paid 15% payroll taxes in that same interview.
Dividends are taxed as ordinary income, along with taxable interest. Capital Gains are taxed at the lower long-term capital gains tax rate.
When you talk about double taxation due to corporate income being taxed and then the individual paying tax when the capital gains are distributed (those were the words you used) then you are describing dividend taxes but calling them capital gains taxes.