Dividend Distribution Proposals: The Dividends Received Deductions by Corporations and Related Matters

Professor Blum advocates repeal of the "earnings and profits" limitation on dividend income. Professor Blum traces some of the early history and concludes that taxing most corporate distributions of a corporation would eliminate a needless intermediate step of defining earnings and profits, which serves only to complicate the double-tax regime. Mr. Stone opposes repeal of the "earnings and profits" concept to deal with Wall Street gimmicks and recommends a move toward a fundamental change in corporate taxation, including a system of integration where the impact of the two-tiered tax on corporate income would give way to some type of single-tax scheme.