Corporations are taxed on profits. Her salary is part of the costs of the company doing business - the company doesn't pay taxes on her salary, because it isn't profit.

... my personal preference would be to eliminate corporate taxes and tax capital gains at rates similar to (or higher than) payroll.

public and private pension plans that rely somewhat heavely on them. Sigh!

Profits
- Expenses
--------------
Taxable Income
-Taxes
--------------
Income available to investors

Note: This only applies to C corps (all public corporations)

So increasing a secretaries salary by $1 only costs investors $0.65.

One interesting (and not necessarily good) outcome of this system is that interest expense is deductible, while dividends are not. This leads to companies taking on more debt than they might otherwise because it increases profits to investors.

It would lower my tax bill considerably if I could deduct the costs of my own maintenance from my profits as an employee. Housing, insurance, car payments, gasoline, food, medical bills and insurance, clothing, gas and electric. I can't operate as an employee unless I have food, shelter, and transportation to work.

I wonder what percentage of the American people are operating at a deficit?

And that's what the GOP and the rich want - no taxes for those who already don't pay their fair share.

Why can't the average American understand this??

The whole double taxation spiel is tiresome. Taxes are one of the prices one pays for all of the advantages of a specialized society.

After all, the taxes that a corporation pays will be at least some factor in what the employees are paid, so one could also say that an employee is being double taxed too...