Economics Dictionary of ArgumentsHome
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| Benefit principle: The benefit principle in economics suggests that individuals or entities should pay taxes in proportion to the benefits they receive from public goods and services. This principle aims for fairness by aligning tax payments with the value of government services enjoyed, such as infrastructure or education, ensuring that those who benefit more contribute more. See also Taxation, Cost principle._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Benefit Principle - Dictionary of Arguments
Rothbard III 922 Benefit principle/taxation/Rothbard: Still another attempt at neutral taxation is the benefit principle, which states that a tax should be levied equal to the benefit which the individuals receive from the government service. >Cost Principle/Rothbard, >Neutral taxation/Economic theories, >Neutral taxation/Rothbard, >Service/Rothbard. Costs: Rothbard: It is not always realized what this principle would mean: e.g., that recipients of welfare benefits would have to pay the full costs of these benefits. Each recipient of government welfare would then have to pay more than he received, for he would also have to pay the "handling" costs of government bureaucracy. >Bureaucracy/Rothbard. VsBenefit principle: Obviously, there would be no such welfare or any other subsidy payments if the benefit principle were maintained. Service: Even if we again confine the discussion to services like police protection, grave flaws still remain. Rothbard III 923 Measurements/VsBenefit Principle: A fatal problem is that we cannot measure benefits or even know whether they exist. As in the head tax and cost principles, there is here no free market where people can demonstrate that they are receiving a benefit from the exchange greater than the value of the goods they surrender. In fact, since taxes are levied by coercion, it is clear that people's benefits from government are considerably less than the amount that they are required to pay, since, if left free, they would contribute less to government. The "benefit," then, is simply assumed arbitrarily by government offcials. Benefit/utility/free market: Furthermore, even if the benefit were freely demonstrable, the benefit principle would not approach the process of the free market. For (…) individuals pay a uniform price for services on the free market, regardless of the extent of their subjective benefits. Taxation/market principle: To tax everyone in accordance with the benefit he receives, then, is diametrically opposed to the market principle. Government service: Finally, if everyone's benefit is taxed away, there would be no reason for him to make the exchange or to receive the government service. Marginal utility: On the market, not all people, not even the marginal buyers, pay the full amount of their benefit. The supramarginal buyers obtain unmeasurable surplus benefit, and so do the marginal buyers, for without such a surplus they would not buy the product. Inequalities: Moreover, for such services as police protection, the benefit principle would require the poor and the infirm to pay more than the rich and the able, since the former may be said to benefit more from protection. >Progressive tax/Rothbard, >Excess Profits Tax/Rothbard, >Poll tax/Rothbard._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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