Do we really need nonqualified preferred stock? A rethinking of the taxation of corporate capital.

The tax treatment of all forms of corporate capital should be uniform to eliminate the manipulation of Tax Code provisions to minimize taxation. Distinctions between capital structure according to preferred and common stock or debt and equity allow tax planning to result in congressionally unintended government revenue loss. A neutral system of taxing financial instruments should be based upon a general principle of either recognition or nonrecognition of gain.