Hypothecated tax

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The hypothecation of a tax (also known as the ring-fencing or earmarking of a tax) is the dedication of the revenue from a specific tax for a particular expenditure purpose. This approach differs from the classical method according to which all government spending is done from a consolidated fund.

Excerpt from the Wikipedia article “Hypothecated tax”, under the CC BY-SA 4.0 license. Read the article on Wikipedia