Asked by juan david jimenez vargas on Jul 16, 2024
Verified
The principal of neutrality states that, with respect to economic decisions, all taxes must be neutral.
Principle of Neutrality
The concept that certain measures, such as fiscal policies, should be designed to have a neutral effect on economic choices and competition.
Economic Decisions
Choices made by individuals, businesses, or governments regarding the allocation of scarce resources to satisfy needs and desires.
- Understand the principles underlying tax system design, including neutrality, efficiency, and equity.
Verified Answer
EO
EMMANUEL OWUSU ANSAHJul 22, 2024
Final Answer :
False
Explanation :
The principle of neutrality in economics suggests that taxes should not influence economic decisions or distort market operations, but it does not mandate that all taxes must be neutral. Different taxes have varying impacts on economic behavior.
Learning Objectives
- Understand the principles underlying tax system design, including neutrality, efficiency, and equity.
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