Allowing expensing of distributions would actually not equalize the tax treatment. If you could expense distributions it would be more favorable to do dividends

Allowing expensing of distributions would actually not equalize the tax treatment. If you could expense distributions it would be more favorable to do dividends than to retain earnings, because retained earnings (in the context of companies building up huge war chests rather than reinvesting retained earnings in the business) would still be subject to double-taxation (corporate taxes, then deferred taxes on capital gains), while dividends would be subject only to the tax on capital income, which is less than the combination of the other two taxes. I think.