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Benefit principle

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The doctrine of consumer sovereignty is applied to the provision of social goods in so far as the consumer buys national defence, police service, fire protection and electricity or water supply from the public sector of his own choice and according to the benefits received just as he buys food,
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is the primary criticism given for limiting the scope of the benefit principle. When information about marginal benefits is available only from the individuals themselves, they tend to under report their valuation for a particular good, this gives rise to the
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Until people are made to bear the full costs of their decisions, those decisions are unlikely to be socially sound, in this as in other areas of public policy. - Bird, Richard M. (1976).
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Thus, considered in themselves, in their own nature, in their normal state, and apart from all abuses, public services are, like private services, purely and simply acts of exchange. -
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The benefit principle takes a market-oriented approach to taxation. The objective is to accurately determine the optimal amount of revenue that should be spent on public goods.
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clothes, fuel, tooth brushes and automobiles from the private producers. - P.C. Jain (1989), The Economics of Public Finance, 2nd ed., v. 1, p.
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Here are a few of the public services that are currently funded, in some part, on the basis of the benefit principle...
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Charging for Public Services: A New Look at an Old Idea by Richard M. Bird Review by: Wayne R. Thirsk
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Bernd Hansjürgens, 2000. "The Influence of Knut Wicksell on Richard Musgrave and James Buchanan",
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of limited resources...it is less likely that funds will be overinvested in low priority programs.
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More equitable/fair because taxpayers, like consumers, would "pay for what they get"
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V. The Constitution of Economic Policy, Nobel Prize lecture. Republished in 1987,
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Fritz Neumark and Charles E. McLure, Jr., 2013. "Taxation," The Benefit Principle,
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National park admission fees (only paid by the people who visit public parks)
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for benefits received. The principle is sometimes likened to the function of
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Why markets do not fail. Buchanan on voluntary cooperation and externalities
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Public college tuition (only paid by the people who attend public colleges)
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Taxes are more akin to prices that people would pay for government services
190:. Wicksell's near-unanimity formulation of the principle was premised on a 183: 167: 332:- taxpayers would have a better understanding of the costs of public goods 635: 610: 836: 799: 818: 771: 579: 416: 794:
The influence of Knut Wicksell on Richard Musgrave and James Buchanan
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Seligman, R.E. - Progressive Taxation in Theory and Practice. 1908
312:- specific rather than general...charges are more direct...so the 205:, and others. It has also been applied to such subjects as 688:, pp. 72-119 for discussion and the relevant publications. 812:
User Charges for Public Services: Potentials and Problems
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as the "foremost proponents of the 'benefit principle'."
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Charging for Public Services: A New Look at an Old Idea
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Provides the foundation for voluntary exchange theory.
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Bridge tolls (only paid by people who use the bridge)
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Bus fares (only paid by the people who take the bus)
178:, the benefit approach was initially developed by 737:Richard A. Musgrave and Peggy B. Musgrave, 1973. 703: 701: 885: 873:Public Sector Economics For Developing Countries 879:Global Perspectives on E-Commerce Taxation Law 698: 209:, corporation taxes, and taxes on property or 460:. Consider transferring direct quotations to 810:Bird, Richard M. and Tsiopoulos, Thomas - 741:(under "Subject Index," Benefit Principle). 728:, ch. 4, "The Benefit Approach," pp. 71-89. 419:(only paid by the people who purchase fuel) 197:. The approach was extended in the work of 557:Learn how and when to remove this message 394:Learn how and when to remove this message 279:Learn how and when to remove this message 124:Learn how and when to remove this message 66:Learn how and when to remove this message 686:Classics in the Theory of Public Finance 100:Relevant discussion may be found on the 29:This article includes a list of general 680:   • Richard A. Musgrave and 886: 752:"The Constitution of Economic Policy," 855:The Pure Theory of Public Expenditure 739:Public Finance in Theory and Practice 676:Public Finance in Theory and Practice 451:too many or overly lengthy quotations 330:There's no such thing as a free lunch 806:The Elgar Companion to Public Choice 506: 433: 343: 228: 77: 15: 13: 780: 35:it lacks sufficient corresponding 14: 910: 772:The Economics of Earmarked Taxes 511: 438: 348: 233: 170:. In its use for assessing the 82: 20: 837:Are public goods public goods? 825:Economics Of The Public Sector 765: 744: 731: 718: 664: 648: 186:(1919), two economists of the 1: 800:The Case For Tax-Target Plans 674:and Peggy B. Musgrave, 1973. 641: 576:preference revelation problem 726:The Theory of Public Finance 502: 148:. It bases taxes to pay for 7: 724:Richard A. Musgrave, 1959. 589: 537:the claims made and adding 429: 374:the claims made and adding 339: 259:the claims made and adding 224: 10: 915: 316:of taxpayers, rather than 155:on a politically-revealed 831:Taxation & Tax Policy 750:James M. Buchanan, 1986. 324:More efficient allocation 865:Hildreth, W. Bartley - 756:American Economic Review 458:summarize the quotations 215:constitutional economics 174:of taxes and appraising 861:Principles of Economics 804:Holcombe, Randall G. - 656:Encyclopædia Britannica 601:Decentralized knowledge 320:, are given more weight 50:more precise citations. 853:Samuelson, Paul A. - 792:Hansjürgens, Bernd - 621:New public management 894:Public choice theory 829:Cordes, Joseph J. - 823:Ghosh & Ghosh - 310:Consumer sovereignty 140:is a concept in the 93:factual accuracy is 817:Thirsk, Wayne R. - 798:Brown, Daniel J. - 672:Richard A. Musgrave 318:government planners 195:income distribution 899:Theory of taxation 859:Mankiw, Gregory - 786:Marciano, Alain - 631:Rational ignorance 571:free-rider problem 522:possibly contains 359:possibly contains 244:possibly contains 157:willingness to pay 142:theory of taxation 877:Basu, Subhajit - 841:James M. Buchanan 839:p. 149 describes 835:Meerman, Jacob - 567: 566: 559: 524:original research 483: 482: 404: 403: 396: 361:original research 289: 288: 281: 246:original research 207:tax progressivity 138:benefit principle 134: 133: 126: 76: 75: 68: 906: 867:Hdbk on Taxation 774: 769: 763: 748: 742: 735: 729: 722: 716: 711:, 103(1/2), pp. 705: 696: 668: 662: 652: 626:Opportunity cost 616:Hypothecated tax 584:true preferences 562: 555: 551: 548: 542: 539:inline citations 515: 514: 507: 478: 475: 469: 442: 441: 434: 399: 392: 388: 385: 379: 376:inline citations 352: 351: 344: 294:Frédéric Bastiat 284: 277: 273: 270: 264: 261:inline citations 237: 236: 229: 203:Richard Musgrave 188:Stockholm School 129: 122: 118: 115: 109: 106:reliably sourced 86: 85: 78: 71: 64: 60: 57: 51: 46:this article by 37:inline citations 24: 23: 16: 914: 913: 909: 908: 907: 905: 904: 903: 884: 883: 871:Howard, M.C. - 783: 781:Further reading 778: 777: 770: 766: 749: 745: 736: 732: 723: 719: 706: 699: 682:Alan T. 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Index

references
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improve
introducing
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disputed
talk page
reliably sourced
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theory of taxation
public finance
public-goods
expenditures
willingness to pay
prices
allocating
private goods
efficiency
fiscal policy
Knut Wicksell
Erik Lindahl
Stockholm School
just
income distribution
Paul Samuelson
Richard Musgrave
tax progressivity
wealth
constitutional economics
James Buchanan

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