Abstract
If the burden of the two-tier taxation of corporate-source income is to be eased by integration, the first question to be answered is this: at what level should integration be provided? Should an adjustment be made at the corporate level—that is, should the corporation income tax on the distributed component of the corporation’s profits be reduced because that component will also be taxed in the shareholders’ hands? Or should there be an adjustment at the shareholder level—that is, should the individual income tax on the shareholder’s dividend be reduced to take account of the fact that the dividend is paid from profits that were previously taxed to the corporation?1
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Notes
See Musgrave, “The Carter Commission Report,” 1 Canadian Journal of Economics 159, 166 (1968). Professor Musgrave has also put it this way: “With widely-held corporations it may well be that management simply looks at what corporation tax must be paid at the corporate level, and not at the net payments by the shareholders.” Musgrave, “Taxation of Corporations,” in Canadian Tax Foundation, Report of the Proceedings of the Twenty-Second Tax Conference 124, 135-136.
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Norr, M. (1982). Choice of the Level (Corporate or Shareholder) at Which Integration Is To Be Provided. In: The Taxation of Corporations and Shareholders. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-4502-4_4
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DOI: https://doi.org/10.1007/978-94-017-4502-4_4
Publisher Name: Springer, Dordrecht
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