| Sumario: | The article explores the issue of whether there is a system of taxation which might promote efficiency in public expenditure where the supply of public goods is determined by voting, if direct user charges for public goods are not possible. This is the central issue addressed by the modern theory of benefit taxation. An affirmative answer has been provided to the question and a formula for distributing the tax burden among the individual voters has been developed. The formula implies that an efficient level of public expenditure would be collectively chosen no matter what voting rule might have been established at the constitutional stage of decision making. Application of this neutrality formula, however, requires knowledge of the elasticities of demand for public goods with respect to the variables which influence that demand. It is natural, then, that the formula has reappeared in several recent studies which attempt empirical estimation of demand functions for various public goods. A test based on this formula has been proposed for determining the extent to which the supply of a public good in a particular community deviates from the efficient quantity.
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