Fiscal Neutrality

Fiscal neutrality refers to a situation where government policies, such as taxes or spending, do not distort economic decisions or alter individuals' and businesses' behavior. Essentially, it means that the government’s actions should not favor or disadvantage specific industries, activities, or income groups. For example, a fiscally neutral tax system would collect revenue in a way that doesn't significantly influence choices like saving, working, or investing. The goal is to fund public services fairly without impacting economic efficiency or causing unintended shifts in resource allocation.