Franchise taxes are a type of tax levied on corporations by states in the United States. Corporations and similar business entities enjoy certain legal benefits. One is the ability to exist indefinitely until terminated by the desire of the owners, or until declared insolvent and allowed to die. This allows the business of the corporation to persist beyond the lives of those who began the business. It also allows for the accumulation of capital and ownership separate from people who manage the business of the corporation. In this way corporations allow the accumulation of wealth benefited by professional management. Another important benefit of incorporation is that it shields its shareholders from liability for the actions of the corporation beyond the shareholders’ investment in the corporation.
The Growing Wealth Gap: A Problem for the United States
A startling statistic was highlighted in a recent article by Daniel de Visé for USA TODAY: the top 1% of American earners now control more wealth than the nation's entire middle class. This statement, backed by Federal Reserve statistics, puts into perspective the...