ABSTRACT
The modern literature on tax earmarking has focused on the question of efficiency in government expenditures. Until Buchanan’s 1963 paper, public finance theorists generally opposed earmarking tax revenues on the grounds that it imposed an unnecessary constraint on government. The preferences of taxpayer-consumers change over time, as does the technology available to respond to these preferences. By locking in an expenditure pattern based on a revenue pattern that may not be related in any meaningful way to changes in the efficient expenditure pattern, earmarking was seen to reduce the ability of government to accommodate changes in the desired composition of public services over time.
