Decision neutrality

Decision neutrality
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Investment neutrality	Funding neutrality	Legal form neutrality

In Business Administration called tax decision neutral if it does not change the relative prices in the market.

Decision-neutral taxes in particular leave investment, financing and legal form decisions by companies unaffected. Therefore, decision neutrality is seen as an important guideline of tax policy.

However, households change their decisions not only when taxes distort relative prices, but also because of the income effects of taxation. For this reason, the business concept of decision neutrality only makes sense in relation to companies. It corresponds to the economic concept of production efficiency.

Individual evidence

↑ Rainer Elschen (1991) Decision-making neutrality , allocation and taxation according to performance, tax and economy , pp. 99–115.
↑ Clemens Fuest (2016) Is neutrality a good guideline for tax policy? In: Kahle, H. et al. (Ed.) Core issues of corporate taxation . Verlag Gabler Springer, ISBN 978-3-658-16477-5 , p. 39.
↑ Stefan Homburg : General Taxation . 7th edition. Vahlen, Munich 2015, ISBN 978-3-8006-4922-8 , pp. 240 ff .

[1] Rainer Elschen (1991) Decision-making neutrality , allocation and taxation according to performance, tax and economy , pp. 99–115.

[2] Clemens Fuest (2016) Is neutrality a good guideline for tax policy? In: Kahle, H. et al. (Ed.) Core issues of corporate taxation . Verlag Gabler Springer, ISBN 978-3-658-16477-5 , p. 39.

[3] Stefan Homburg : General Taxation . 7th edition. Vahlen, Munich 2015, ISBN 978-3-8006-4922-8 , pp. 240 ff .