User:Nick Gardner /Sandbox

There is no apparent advantage to be gained from adding the indirect taxation of the sources of investment income by adding a tax on company profits to its direct taxation as part of personal income taxation - although it was suggested in the Meade Report that it might be considered to be a payment for the privileges of limited liability.

Corporate taxation can affect productivity in several ways. It can distort relative factor prices and re-allocation of resources towards less productive sectors. it imposes compliance costs on firms and administrative costs on governments, thereby diverting resources from productive activities, and it may reduce incentives to invest and innovate. It may also impair technology transfer by detering foreign direct investment. The deductability of interest payments favours established corporations that can readily finance their investments by borrowing at the expense of innovative, knowledge-based and recently established firms that are riskier or less able to provide collateral, so have to obtain most of their funding from shareholders. Alternative forms of corporate taxation that may mitigation those disadvantages have been proposed, including the use of 100% "capital allowances" or the adoption of "flow-of-funds" taxation ).