Definition of revenue neutral

changes in the tax laws that result in no change in the amount of revenue coming into the government's coffers. For example, a provision may require individuals to pay less tax, but corporations will pay correspondingly more taxes.

guiding criterion in drafting the tax reform act of 1986 whereby provisions estimated to add revenue were offset by others estimated to reduce revenue, so that on paper the new bill would generate the same amount of revenue as the old tax laws. The concept, which has guided subsequent tax legislation, was theoretical rather than real, since estimates are subject to variation.