Document Type



Comparative and Foreign Law | Tax Law


Is tax neutrality an illusion? My honored friend Pierre Beltrame and his distinguished co-author Lucien Mehl once wrote: “[L]orsque le taux de l’impôt s’éléve, qu’il devient progressif, et que d’importantes masses monétaires sont redistribuées, le fait financier ne peut être neutre, stricto sensu, à l’égard, ni de l’ensemble de l’économie, ne de la répartition de revenu national” (Pierre Beltrame & Lucien Mehl, Techniques, Politiques et Institutions Fiscales Comparées, Presses Universitaires de France, Paris, 2d ed., 1997, p. 314). As they also observed, however, relative judgments of neutrality, judgments that purport to deal the neutrality of isolated elements of a tax system, do seem possible (op. cit., pages 314-315). Tax experts generally discuss tax neutrality today as if the distinction between absolute and relative neutrality were not of great importance. For example, they regard neutrality in the taxation of enterprises – the like treatment of formally different but economically similar juridical entities – as desirable, regardless of other non-neutral elements the tax system as a whole may embrace (op. cit., pages 380-386. The main purpose of this article is to explore the grounds for both these views – the impossibility of absolute neutrality and the possibility of ascertaining the relative neutrality of a tax measure.