The Uncertain Case Against the Double Taxation of Corporate Income
46 Pages Posted: 30 Apr 2006
Recent commentators have criticized the double taxation of distributed corporate income both as an inequitable tax that imposes greater tax burdens on individual shareholders than other taxpayers and as an inefficient tax that distorts the economic decisions of taxpayers. These scholars have called for integration, the elimination of a corporate tax on distributed income. Yet, integration certainly would mean loss of tax revenues and would require Congress to maintain tax revenues by alternative means. This Article asserts that proponents of integration largely have failed to consider this revenue need constraint. The Article questions the prudence of eliminating the double taxation of distributed corporate income because it may jeopardize recent tax reforms aimed at improving the efficiency and equity of the tax system.
Keywords: integration, double taxation, corporate tax reform
JEL Classification: E62, H21, H22, H25, K34
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