The Tax Foundation has released a report on proposals to integrate the corporate and individual income tax codes and how they might work in the context of congressional tax reform.

The new report explains this concept and how it might eliminate the double taxation of corporate income, level the playing field between different types of businesses, and increase U.S. tax competitiveness.

According to the report, corporate income that is funded by equity such as stocks faces “double taxation,” once when it is earned by the corporation and again when it is realized at the shareholder level. However, corporate income that is funded by debt is only taxed once at the individual income tax level. Additionally, pass-through businesses such as sole proprietorships, S corporations, LLCs, and partnerships, are also only taxed once through the individual income tax code.

The Tax Foundation’s report suggests several ways to integrate the corporate and individual tax codes, including allowing shareholders a credit for corporate taxes paid (credit imputation) or allowing corporations to deduct dividends paid (dividends paid deduction). Each of these strategies for corporate integration presents different opportunities and challenges.

Corporate integration might accomplish many of the same goals as a corporate tax rate cut, according to the report, such as making the U.S. business climate more competitive. It could also end several economic distortions created by the current tax code, including the tax preference for debt financing over equity financing.

“As much as possible, the tax code should not distort business decisions,” said Tax Foundation analyst Scott Greenberg in a statement. “The current double taxation of corporate income encourages investors to shift their investments from corporate to non-corporate businesses, leading to a less efficient allocation of capital. Furthermore, it incentivizes corporations to fund their operations with debt, rather than equity, leading to excessive leverage.”

Conversely, a report last week from the Government Accountability Office found that large, profitable American corporations paid only 14 percent of their profits in federal income taxes on average from 2008 through 2012, and approximately one-fifth of them paid nothing at all in each of those years.