Tristan,

The problem is that removing tax imputation hits everyone especially the middle class. Primarily because the lowest paid don't buy shares and the richest simply shift their payments etc to reduce tax.

Companies then reduce dividend payments rather allowing for value growth which hurts pensioners, managers take their payments in cash or benefits rather than dividends etc.

As for the rest of the effects, the companies are worth less since the returns determine the price, and thus find it harder to borrow money lessening the profits (and tax) while reducing employment. People then shift investments to property or overseas shares.

The end result is that the increased tax take is far lower than anticipated, and everyone loses.