Reuven Avi-Yonah (Michigan) presents Corporate Tax Integration and the Debt/Equity Distinction: The Case for Dividend Deduction at Columbia today as part of its Tax Policy Colloquium Series. Here is the Conclusion:

Now that the US is about to revert to the classical system of taxing corporations and their shareholders, it is a good time to reflect on the US integration experience. We do not see much evidence that adopting partial dividend exemption in 2003 had a significant effect on the three biases that are usually cited to support integration.

However, this does not mean that the US should reject integration (although it is certainly not essential). Most of the world has integration, and the US should reconsider it as well. If it does, we do not believe that it needs to adopt a radical expansion of the taxation of business entities, as envisaged by CBIT and its progeny, especially if this requires eliminating interest deductibility. Nor do we think the US needs to reinstate shareholder level integration mechanisms, which benefit the rich disproportionaly (dividend exemption) or are very complex (imputation). Instead, like the original version of tax reform did in 1985, the US should try dividend deduction as a relatively simple way of achieving integration that is also the most consistent with the two reasons it needs to tax publicly traded corporations in the first place.