Revenue Neutral Rate Definition

Revenue neutral law and legal definition 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.

Revenue neutral rate definition. North carolina general statutes define it as the rate that is estimated to produce revenue for the next fiscal year equal to the revenue that would have been produced for the next fiscal year by the current tax rate if no revaluation had occurred. The revenue neutral tax rate is a bundle of contradictions. This is revenue neutral taxation or call it a revenue neutral tax rate. For example currently.

What does it mean when we talk about a revenue neutral tax rate. 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. It is intended to make the property tax reappraisal and rate setting process more transparent but instead it often muddies the waters.

We always hear this from conservatives when they trot out the laffer curve. This may be a reasonable compromise provided all other goods and services are made taxable at the single standard rate of 16. This way even if the govt looses revenue from abolishing the 3 taxes it would earn exactly the same from new tax. Learn more about this concept by reviewing this info sheet by the unc school.

In context of goods and services tax in india the revenue neutral rate is a rate of gst at which the amount of taxes currently collected by the government and the amount expected to be collected after gst remains the same. If the lower rate were to be 5 the revenue neutral standard rate based on 2005 rate structure would be pushed up to 16. Revenue neutral tax reform implies that increased government revenue resulting from lower tax rates is a good thing. The revenue neutral tax rate is a bundle of contradictions.