86453
Description
Mind Map by Harley Wickstead, updated more than 1 year ago
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Created by Harley Wickstead
about 11 years ago
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Fiscal Neutrality
- Does not discriminate between economic choices
- Intro to changes of the tax system
does not change economic
choices made by the taxpayers
- A FN tax aims to raise
revenue in ways which
avoid distortionary effects
- VAT of 20% is levied,
added to the price when
you purchase a product
- Jaffa Cakes are zero
rated, cake not biscuit,
as luxury good
- Due to VAT people will get JC not biscuits
- Not fiscally neutral
- Vat would be fiscally neutral if all goods
and services were taxed at the same rate
- Vat would be fiscally neutral if all goods
and services were taxed at the same rate
- effecting distortionary effects
- Not fiscally neutral
- Due to VAT people will get JC not biscuits
- Jaffa Cakes are zero
rated, cake not biscuit,
as luxury good
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