QUESTION 24 8 points Save Answer (a) Before 2003, for individuals, dividend income is taxed at the individual's ordinary income tax rate. Assume that Nicole faces a 38% tax rate on both ordinary and dividend income (i.e., no preferential tax rate for dividend income). If a C corporation makes $50,000 taxable income per year (taxed at 15%) and distributes all after-tax earnings to its sole shareholder, Nicole, what is the combined tax burden at the entity and shareholder level? (b) The Jobs and Growth Tax Relief Reconciliation Act of 2003 was signed into law by President Bush on May 28, 2003. Under the Act, for individuals, dividend Income is taxed at a favorable rate. For Nicole, after 2003, her ordinary income is taxed at 38% and her dividend income is taxed at 1596. If a C corporation makes $50,000 taxable income per year (taxed at 15%) and distributes all after-tax earnings to Nicole, what is the combined tax burden at the entity and shareholder level? (c) Does the Jobs and Growth Tax Relief Reconciliation Act of 2003 make the C corporation form more or less tax favorable compared to pre-2003 years (holding everything else constant)? Why or why not?