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February 25, 2021 The Tax Lawyer

Corporate Tax Integration and the TCJA: How Near the Mark?

Vol. 74, No. 2 - Winter 2021

by Anthony P. Polito


Congress, through the Tax Cuts and Jobs Act of 2017, made a number of changes to the income tax rates applicable to individuals and profits of businesses conducted both in corporate and noncorporate form. Elsewhere, in an article entitled Advancing to Corporate Tax Integration: A Laissez-Faire Approach, I advanced the case for an Integrationist Norm of business income taxation. In the tax regime of the Integrationist Norm, all business profits would be subject to exactly the same tax burden as if a business were conducted directly by the individual equity holders without an intervening legal fiction of a juridical business entity. The purpose of this Article is to assess how near the TCJA brings the Code to achieving the Integrationist Norm, to consider what possible modifications to the TCJA might bring it nearer the target, and to examine whether such modifications might achieve sufficiently more good than harm to justify the effort to enact them.

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