What is benefit taxation?

Benefit taxation is a system in which individuals are taxed according to th e benefits they receive from public expenditures. This paper describes an a lternative to the Standard Lindahl method of determining the distribution o f individual benefits from government-provided public goods, and uses this alternative to calculate benefit taxes. This alternative avoids some of the paradoxial features of Lindahl pricing, and generates outcomes in which al l consumers benefit from reduced costs of providing public goods. An illust rative calculation shows that benefit taxes defined in this way may be quit e regressive. (C) 2000 Elsevier Science S.A. All rights reserved. JEL class ification: H41; H20.