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Hypothecation



         


Hypothecation (literally: hypothetical dedication) is a treatment and possible justification for government taxation or expenditure. For instance in the United States the Gasoline Tax is dedicated to the funding of transportation infrastructure.

In reality the system is not so closed. If transportation costs were to exceed gasoline tax revenue then services would not be cut. Likewise, if revenues were to exceed costs then the balance would not go unspent.

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