What Is Revenue Neutral Tax

Government required its carbon tax to be revenue neutral in part to assure the public that the tax wasn t a revenue grab.

What is revenue neutral tax. This has been a contentious issue. Likewise an income tax may encourage persons not to work so as to reduce their income an example of a neutral tax is a poll tax. What should be the revenue neutral rate. It is intended to make the property tax reappraisal and rate setting process more transparent but instead it often muddies the waters.

For example a sales tax may encourage people to shop on the black market to avoid paying the tax. The revenue neutral tax rate is a bundle of contradictions. Revenue neutral tax reform implies that taxation is not government theft. This increased tax rate has been called the revenue neutral rate rnr.

The revenue neutral tax rate is a bundle of contradictions. The concept was the decisive factor in drafting the tax reform act of 1986 whereby provisions estimated to add revenue were offset by others estimated to reduce revenue so that on paper the new bill would generate the same amount of revenue as the old tax. The rate is required to be calculated and published by local governments but need not actually be adopted for the coming fiscal year. The rate is required to be calculated and published by local governments but need not actually be adopted for the coming fiscal year.

The government had set up several committees to arrive at such rate. It is intended to make the property tax reappraisal and rate setting process more transparent but instead it often muddies the waters. A tax structure that does not change the incentives in the market neutral taxes are rare. The initial panels including 13fc recommended that rnr should be slightly above 12.