International corporate tax competition continues to exert pressure on legislatures to reduce corporate tax rates as well as the rate imposed on shareholders. To combat this pressure, this commentary recommends eliminating the corporate income tax. Instead corporations should become tax transparent so that a full taxon corporate income is imposed on corporate owners but collected initially at corporate level through a required withholding tax at the maximum rate applicable to individuals. Contemporary data processing capacity enables corporations to track share ownership and report to shareholders amounts withheld on their behalf so that they may include their shares of corporate income and claim a credit for the withholding.
Ordower, Henry, Preserving the Corporate Tax Base Through Tax Transparency (September 20, 2013). Tax Notes International, Vol. 71, No. 11, 993 (2013).