Is limited liability or double taxation fair? | Taxes | Finance & Capital Markets | Khan Academy

Thinking about whether limited liability or double taxation is fair. Created by Sal Khan.

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Finance and capital markets on Khan Academy: In exchange for being treated as a person-like-legal entity (and the limited liability this gives for its owners), most corporations pay taxes. This tutorial focuses on what corporations are, "double taxation" and a few ways that multinationals might try to get out of paying taxes.

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[arseneremy]

for a fellow finance guy, you explained this in a way a 4th grader can understand. khan for prez!!!

[FS_Codex]

Just a small little correction, at 4:49 you said that a LLC stands for a “limited liability corporation, ” but this is not the case. It stands for a limited liability company, and, unlike a corporation, it is not incorporated but does require articles of organization. So while a LLC is a separate legal entity, it is not a separate entity in the same way a corporation is but does provide limited liability unlike a sole proprietorship. They are kind of like a middle ground between a sole proprietorship, which requires no documentation to set up, and a corporation, which of course requires getting your business incorporated.

[Daski]

Attention pls...

Many claim that education in a world without central authority wouldn't work

cough KHANACADEMY cough

[zalida]

Nice video. I gotta laugh when people talk about "fair tax" though. It's just protection money paid to a mafia.
The video is great though - Thanks very much.

[ThePeterDislikeShow]

10x more car liability insurance doesn't cost 10x more though. Not even close.

[jamieclarke]

When the corporation is off shore it doesnt pay tax in the country which it is providing a service and when an individual sets up a bank account in a tax free haven such as the canary islands they themselves dont have to pay tax on that money. If its in a swiss bank then assets cant even be seized from it unless the world bank and imf decide to freeze your assets.

[sonnybrown]

nice job. double taxation isn't a good thing in my opinion. btw, what are you using to point and write? It works wicked.

[Melthornal]

To the second argument: Why should the downside of the soccer player be so much worse than a normal person? If a normal person has their foot run over, they just have to pay for medical fees to repair the damage. The Soccer player loses their entire career forever. Why should the soccer player have greater downside without any compensation? By that logic, the soccer player should be able to sue bill directly and a normal person should only sue the LLC.

[ChrisKunzler]

One problem I see is these "legal people" can live forever, and accumulate huge amounts of money which they can then use to manipulate the public and laws to their advantage, and they do. They are then like some of the largest corporations able to create enough loop holes that they don't have to pay any taxes.

[sumeetpandey]

where is third party insurance, , , can that help.