Corporate Tax Integration in Light of Falling Corporate Tax Rates: Using the 1803 British System for Withholding Taxes on Corporate Income as a Model

  •  Raymond L. Richman    
  •  Jesse T. Richman    
  •  Howard B. Richman    


Tax competition has morphed the corporate tax into a source-based tax with falling rates. Past proposals to integrate corporate taxes with the residence-based personal income tax were rejected because of revenue loss and poorly designed alternatives, but in light of falling tax rates and revenues, integration has become viable. An updated version of the simple and practical 1803 British system would impute corporate income to shareholders and have corporations withhold taxes paid on that income. It would reduce distortions of the current code, including that between domestic and foreign production, could provide more government revenue, and would be more progressive.

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