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LogoutFiscal neutrality refers to the situation when the net effect of [taxation] and public spending is neutral, neither stimulating nor dampening demand.
The term can be used to describe the overall stance of fiscal policy: a balanced budget is neutral, as total tax revenue equals total public spending
It can also refer more narrowly to the combined impact of new measures introduced in an annual budget: the budget can be fiscally neutral if any new taxes equal any new spending, even if the overall stance of the budget either boosts or slows demand.