Assume that Josie forms JES as a C-Corporation.
•JES earns taxable income of $300,000.
•JES will distributes 40% of its after-tax earnings annually as a dividend.
•Josie’s marginal ordinary tax rate is 37% and her dividend tax rate is 23.8% (including the net investment income tax).
What is the overall tax rate on JES’s taxable income?
