Definition Of Revenue Neutral Tax

Revenue neutral law and legal definition.

Definition of revenue neutral tax. Revenue neutral tax reform implies that it entails no tax increases. The revenue neutral tax rate is a bundle of contradictions. If we were asked to calculate a revenue neutral rate for a new taxation which replaces these 3 taxation we will calculate it to 12 33 37 300. The rate is required to be calculated and published by local governments but need not actually be adopted for the coming fiscal year.

But any revenue neutral tax reform scheme can by definition only shift taxes not lower them. If someone s taxes are lowered. In some cases neutrality is. The basic concept is simple.

The rate is required to be calculated and published by local governments but need not actually be adopted for the coming fiscal year. This is revenue neutral taxation or call it a revenue neutral tax rate. Generally the tax system should strive to be neutral so that decisions are made on their economic merits and not for tax reasons. It is intended to make the property tax reappraisal and rate setting process more transparent but instead it often muddies the waters.

This way even if the govt looses revenue from abolishing the 3 taxes it would earn exactly the same from new tax. The term revenue neutral implies changes in the tax laws that result in no change in the amount of revenue coming into the government s coffers. In other words a tax proposal is revenue neutral if it neither increases nor decreases tax revenues when compared to existing law. See synonyms for revenue neutral adjective of a change in taxation policy that does not alter overall tax revenue usually because it is offset by corresponding cuts or increases.