We investigate the neutrality features of an ACE tax reform proposal suggested for the company tax reform in Germany. As a pure ACE tax system is not directly feasible in practice, certain elements have been changed: the traditional income tax of non-corporations remains progressive; there is a...

Political economy aspects make progressive income taxation and taxation of capital income imperative in practise. International tax competition and profit shifting, in turn, put pressure on corporate and capital taxes. Hence, the scope for a politically feasible change-over to a status of...