Professor Blum advocates repeal of the "earnings and profits" limitation on dividend income. Professor Blum traces some of the early history and concludes that taxing most corporate distributions of a corporation would eliminate a needless intermediate step of defining earnings and profits, which serves only to complicate the double-tax regime. Mr. Stone opposes repeal of the "earnings and profits" concept to deal with Wall Street gimmicks and recommends a move toward a fundamental change in corporate taxation, including a system of integration where the impact of the two-tiered tax on corporate income would give way to some type of single-tax scheme.
Walter J. Blum, Howard G. Krane & Lawrence M. Stone,
Dividend Distribution Proposals: The Dividends Received Deductions by Corporations and Related Matters,
San Diego L. Rev.
Available at: https://digital.sandiego.edu/sdlr/vol22/iss1/7