I never understood the double taxation argument either. Even if I concede its double taxation, who cares? Its not a natural right to only be taxed once.
Well for one thing, it does not control for the differences in income of the stockholders. Each shareholder is taxed at the same rate per share held. Since it penalizes income coming from corporations (by taxing both the corporation and the dividend), it creates perverse incentives that cause some pretty unproductive behavior - like the hording of cash by all the tech giants.
Companies exist for one purpose, to create shareholder value. Shareholder value / the net worth of a company is traditionally defined as the value of future cash distributions.
It's not a matter of taxing once or twice, it's simply a matter of how much taxes have to be paid before the owner(s) get the proceeds. A company's tax rate is effectively the percentage of the company owned by the government. Since corporate structure dramatically impacts the tax rate, founders are forced into playing the game, paying for more complex structures that legally reduce the tax rate, in order to retain a greater share of what we build.
Keep in mind, of the 6 million companies which have employees in the US, 5.9m of them have less than 100 employees, with total sales/receipts of $7.7 trillion, in 2008. That's just shy of a quarter of total U.S sales/receipts. [1]
It's a bit better now that dividends are taxed the same as capital gains, but unfortunately what should be the simplest / easiest / gold standard way of doing it -- the C Corp -- is still highly tax disadvantaged to other more complex forms, for the vast majority of businesses.
The tax code as it stands is a massive drag on productivity and growth. There's literally trillions of dollars of opportunity for improvement here through simplifying the code.
"No taxation without representation". You get taxed twice, but only represented once. (If that.)
It seems completely reasonable for either individuals or companies that are large enough and mobile enough to relocate to shop around for a better value for the cost.
To be honest, it's worth paying for.