Final answer:
True, as revenue neutrality dictates that tax cuts should be offset by measures to maintain revenue, which could include increases in other taxes.
Step-by-step explanation:
According to revenue neutrality, every new tax law that lowers taxes must include a revenue offset that makes up for the loss. The statement is true. Revenue neutrality is a principle that suggests for every dollar of revenue lost due to tax cuts or deductions, a new dollar should be gained either by increasing taxes elsewhere, cutting spending, or by the increased economic activity that may result from the tax cuts.
Economists like Arthur Laffer have noted that sometimes, lowering income tax rates can paradoxically increase income tax revenue because it can incentivize increased economic activity, expanding the tax base. However, not all tax cuts lead to increased revenues, and often governments must find ways to balance those cuts with other measures to maintain revenue neutrality.