earmarking of taxes
Tax earmarking or tax hypothecation involves assigning revenue from a particular tax to a speciﬁc part of public expenditure. An extension of the concept would allow taxpayers to assign their taxes to particular uses. There has been some debate about whether earmarking would unduly constrain government or whether it might promote greater democracy if it were possible for taxpayers to vote over different spending decisions and their associated taxes, rather than a single decision on the aggregate level of public spending and taxation. Earmarking arrangements are vulnerable to general public ﬁnancial pressures. for example, in the UK, in principle the Road fund set up in 1921 was a mechanism by which vehicle and fuel taxes paid for spending on roads. However, those taxes came to be used for general purposes and the independent life of the Road fund ﬁnished in 1937.