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Alvin C. Warren, Jr., Federal Income Tax Project: Integration of the Individual and Corporate Income Taxes: Reporter's Study of Corporate Tax Integration (American Law Institute 1993).

Abstract: The United States has long had what is usually called a classical income tax system, under which income is taxed to shareholders and corporations as distinct taxpayers. As a result, taxable income earned by a corporation and then distributed to individual shareholders as a dividend is taxed twice, once to the corporation and once to the shareholder on receipt of the dividend. Corporate taxable income distributed as dividends to exempt shareholders is taxed only at the corporate level. In contrast, earnings on corporate debt capital are nontaxable at the corporate level to the extent they are distributed as deductible interest payments. Whether interest is taxed to the recipient depends on the recipient's status, with foreign and tax-exempt lenders generally nontaxable on such receipts. Integration of the individual and corporate income taxes refers to various means of eliminating the separate, additional burden of the corporate income tax, in favor of a system in which investor and corporate taxes are interrelated so as to produce a more uniform levy on capital income, whether earned through corporate enterprise or not. ♦The integration proposals in this study would convert the separate U.S. corporate income tax into a withholding tax with respect to income ultimately distributed to shareholders. ♦