[beagle3]

These things are extremely hard to compare.

Yes, it is on top of the 35%. However, the 35% is on pure profit -- if the business has more expenses, the profit goes down and there is less tax. Whereas, if it was earned income, there are much fewer relevant deductions.

Also, being a corporate does indeed cost that 35% corporate tax - however, it does limit the shareholder, director and officer liability. If the corporate structure wasn't there, these people would have to arrange for e.g. insurance - and the overall cost would be at least as high.

I would infer from the fact that most small business owners choose the "limited liability" path, that the overall cost (corporate tax + dividend tax) is worth the limited liability. It might, in fact, be too cheap for what it provides.

[gamblor956]

The LLC form provides the best of both: limited legal liability, while eliminating the double taxation burden. This is one of the reasons the form has been taking off over the past 2 decades, especially for small businesses.