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The Corporate Pyramid Fable

Published online by Cambridge University Press:  14 April 2011

Steven A. Bank  and
Brian R. Cheffins
Steven A. Bank
Affiliation:
Professor of law at the UCLA School of Law.
Brian R. Cheffins
Affiliation:
Professor of Corporate Law at the Faculty of Law at the University of Cambridge.
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Abstract

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Although corporate pyramids are currently commonplace world-wide and although there have been “noteworthy pyramiders” in American business history, this controversial form of corporate organization is now a rarity in the United States. The conventional wisdom is that corporate pyramids disappeared in the U.S. when New Deal policymakers began taxing dividends paid to corporate shareholders. This version of events is more fable than truth. The introduction of the intercorporate dividend tax did not foster a rapid dismantling of corporate pyramids. Instead, pyramidal arrangements were already rare in the U.S., other than in the utilities sector, and the demise of utility pyramids was prompted by the Public Util- ities Holding Company Act of 1935 rather than by tax reform.

Type
Articles
Information
Business History Review , Volume 84 , Issue 3 , Autumn 2010 , pp. 435 - 458
Copyright
Copyright © The President and Fellows of Harvard College 2010

References

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