Final answer:
The second level of tax on a C corporation's income is paid by the shareholders, also known as the owners of the corporation. This tax is called the dividend tax. The tax rate applicable to the second level of tax, or dividend tax, depends on the individual's tax bracket.
Step-by-step explanation:
The second level of tax on a C corporation's income is paid by the shareholders, also known as the owners of the corporation. This tax is called the dividend tax. When a C corporation earns profits, it can choose to distribute those profits to its shareholders in the form of dividends. These dividends are then taxed at the individual income tax rates of the shareholders.
The tax rate applicable to the second level of tax, or dividend tax, depends on the individual's tax bracket. The current individual income tax rates range from 10% to 37%. Therefore, the tax rate on the second level of tax can vary.
The dividend tax is levied when the dividends are distributed to the shareholders. It is important to note that not all C corporations distribute dividends, so in some cases, the second level of tax may not be relevant.