A C Corporation is an entity which is always taxed separately from its owners or shareholders. Both the shareholders as well as the C Corporation itself are taxed separately for the same income earned. Most of the organizations in US fall under this classification of the companies under the Income Tax rules in the country. (Sitarz, 2000)The above calculations show that after deducting the corporate tax rate of 40 from the earnings before tax, 1.2 per share is given to the shareholders as dividends. However, a further deduction of 30 is made from this dividend and shareholder only gets 0.84 per share after netting off all the taxes from the earnings before tax of a C Corporation. The above calculations therefore confirm that C Corporations are subject to double taxation problem.