Fines, Fees, Forfeitures and the Emerging Issue of Fairness

Governing: Back in the 1970s, when property tax revolts such as California's Prop 13 put limits on a primary municipal revenue source, many cities turned to the most available alternatives: user fees and charges, fines and forfeitures. An emerging body of public-finance theory came to their support with the concept of "public choice," which drew on microeconomics to argue that user fees are more efficient and equitable than taxes. The basic idea was that a dollar's worth of additional cost should equal a dollar's worth of utility at the consumer level. Further, much like sin taxes, fines and forfeitures compensated for "social bads" while paying for social goods.

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