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Benefit principle

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Benefit Principle
The Benefit principle is the idea that government spending should be met by the people who receive them. This was the justification for Margaret Thatcher's Poll Tax.

 


BENEFIT PRINCIPLE: A principle of taxation in which taxes are based on the benefits received by people using the good financed with the tax.

Moreover, the idea of vertical equity (i.e., the 'proper' amount of progressivity) often directly contradicts another notion of fairness, the 'benefit principle.

See also: Tip, Public goods, Feedback, Public good, Perfect competition

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