The United States is unique in subjecting corporate income to two layers of tax. In what is called a "classical system," corporate income is taxed once at the entity level when earned and a second time at the individual level when distributed to shareholders in the form of a dividend. By contrast, in most other countries, corporate- and shareholder-level taxes are fully or partially integrated through some form of credit or deduction. America's double taxation of corporate income is a much-criticized but persistent feature of its current tax system despite numerous reform proposals over the last half-century or so. Here, Bank discusses why dividend-tax relief was so long in coming, given the initial momentum for reform and determines what led dividend-tax reform to rise to the top of the agenda in 1954.
Steven A. Bank,
The Rise and Fall of Post—World War II Corporate Tax Reform,
73 Law and Contemporary Problems
Available at: http://scholarship.law.duke.edu/lcp/vol73/iss1/8