Senator Hatch Weighing Corporate Integration System; Former Treasury Officials Testify in Favor

The staff of Senator Hatch, Chairman of the Senate Finance Committee, is reportedly investigating a proposal that will permit a corporation to deduct 40% of the dividends it pays to shareholders.  Senator Hatch has previously promoted similar corporate integration measures—plans that eliminate or reduce the double taxation corporations face.  The proposal is reportedly being explored as an alternative to eliminating interest deductibility, as proposed by the House Republican’s Blueprint.  Interest deductibility is argued to favor debt over equity financing.  Senator Hatch’s plan would eliminate the divergent treatment by permitting a deduction for both.  Pamela Olson, former Treasury assistant secretary for tax policy from 2002-04, and Jon Talisman, a former Treasury assistant secretary for tax policy from 2000-01, both testified in the July 18 hearing that permitting deductions for dividends would be preferable to eliminating interest deductibility.

Read more: Former Top Treasury Tax Officials Prefer Corporate Integration

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