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Unformatted text preview: Tax Y Will still run a very small deficit. Cheng November 28, 2005 Notes Richard Musgrave- a 3-budget approach to government 1. Allocative- pollution or whatever. Benefit Principle of Taxation . MUx/ Px = MUy/ Py = MU g/ Tg Total Amount of Tax Revenue = Total Amount of Spending. -The amount collected from those who benefit should be the exact amount spent. 2. Distribution Ability to pay Principle of Taxation . Definition of Welfare : Benefit (to you)/ Total Sum of Benefit > Taxes (you pay)/ Total Sum of Taxes Ex. The farming, corn, industry. 3. Stability We have a normative trap when it comes to property rights. Spending = TR Welfare Paid = Tax...
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This note was uploaded on 01/12/2010 for the course ECON 434 taught by Professor Byrns during the Spring '09 term at UNC.
- Spring '09
- Public Good