"Good tax policy" has nothing to do with this fight. "Good tax policy" would recognize that there is an integration between the corporate and personal income taxes, and treat labor and capital income equally. Corporations are allowed a deduction for wages, so wage income is fully-taxable personally. However, corporations do not get a deduction for dividends, and cannot get a deduction for capital gains. Yet, this after-tax corporate income is double-taxed on the personal level, albeit at lower rates. The "good tax policy" here would be to tax qualified dividends and corporate-source capital gains at 0% personally, and tax everything else at full marginal tax rates.