President Bush's recently proposed to eliminate the double taxation of corporate income. The proposal contains the germ of a good idea, but it is incomplete. Indeed, implementing it as is would be undesirable for several reasons: it would add to our burgeoning national debt and thus reduce economic growth; it would be highly regressive, and it would have little or no effect on the epidemic of corporate tax sheltersa growing phenomenon that is both inefficient and unfair. This paper proposes to address all of these deficiencies by coupling the Administration's proposal with full taxation of capital gains upon realization. The proposal would be revenue neutral, progressive, and would do more to improve the allocation of capital than the Administration's proposal.