Question

1. Answer each of the following in one short sentence:
   1. What is the basic meaning of “revenue neutrality” in the context of tax reform?
2. 2. What entity is officially in charge of determining revenue neutrality for tax bills under consideration by the Congress?
3. 3. Why might policy-makers want to promote a revenue-neutral tax reform bill?
4. 4. Why might policy-makers be attracted to one that is not revenue neutral?

Answer 1

In the context of a revenue-neutral tax reform, it means that the government claims a certain percentage of the income of the entire American population.

In other words, revenue-neutral tax reform means that Congress spending is not a fundamental problem. In fact, the issue is not tax reform but the government's total expenditure. Many of the things that the government spends on money are either unethical wealth-redistribution schemes and income-transfer or government programs.