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单词 fiscal neutrality
释义 fiscal neutrality

The aim of devising a fiscal system which does not cause distortions in the economy. For example, if the tax system allows firms to write off some types of equipment faster than others with a similar actual life, this tends to divert investment into the types of equipment benefiting from more generous allowances. Fiscal neutrality aims to avoid this type of perverse incentive. When it comes to the incentives to work and to save, it is difficult to see how fiscal neutrality can be achieved: taxes inevitably distort the incentive for individuals to enjoy leisure or engage in do-it-yourself activities rather than spend time on paid work, and for businesses to spend effort on tax avoidance and evasion rather than more efficient production.

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更新时间:2024/11/11 5:59:40