TY  - JOUR
AU  - Morck, Randall
TI  - How to Eliminate Pyramidal Business Groups - The Double Taxation of Inter-Corporate Dividends and Other Incisive Uses of Tax Policy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 10944
PY  - 2004
Y2  - December 2004
DO  - 10.3386/w10944
UR  - http://www.nber.org/papers/w10944
L1  - http://www.nber.org/papers/w10944.pdf
N1  - Author contact info:
Randall Morck
Faculty of Business
University of Alberta
Edmonton, AB T6G 2R6
CANADA
Tel: 780/492-5683
Fax: 780/492-3325
E-Mail: randall.morck@ualberta.ca
M1  - published as Randall Morck. "How to Eliminate Pyramidal Business Groups The Double Taxation of Inter-corporate Dividends and other Incisive Uses of Tax Policy ," in James M. Poterba, editor, "Tax Policy and the Economy, Volume 19" MIT Press (2005)

AB  - 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. Future tax reforms in the United States should mind the original intent of Congress and the President regarding intercorporate dividend taxation. Foreign governments may find the American experience of value should they desire to eliminate their business groups.
ER  -