How to Eliminate Pyramidal Business Groups: The Double Taxation of Inter-Corporate Dividends and Other Incisive Uses of Tax Policy
Tax Policy & the Economy, Volume 19, National Bureau of Economic Research
Posted: 6 Jun 2013
Date Written: August 5, 2004
Arguments for eliminating the double taxation of dividends apply only to dividends paid by corporations to individuals. The double (and multiple) taxation of dividends paid by one firm to another - intercorporate dividends - was explicitly included in the 1930s as part of a package of tax and other policies aimed at eliminating United States pyramidal business groups. These structures remain the predominant form of corporate organization outside the United States. The first Roosevelt administration associated them with corporate governance problems, corporate tax avoidance, market power, and an objectionable concentration of economic power; and undertook a sustained program that rapidly broke up large American pyramidal groups.
JEL Classification: H1, G3
Suggested Citation: Suggested Citation