The Incidence of Government Expenditure and Redistribution in the United Kingdom

not choose to produce, or will not produce in a socially efficient manner. The form of taxation adopted by a government may be influenced by a number of factors, but equity considerations are often important. Thus, tax systems frequently aim to alter the distribution of post-tax incomes (or some other measure of individuals' command over goods and services) from that of pre-tax incomes. Of course, redistribution brought about by taxation can alter individuals' command only over marketed goods and services. However, the effects of the fiscal system as a whole (tax and government expenditure) on redistribution may be very different from redistribution via taxation alone. Unfortunately, although there have been many attempts to measure the distributional impact of specific taxes or tax systems, the theoretical and empirical difficulties experienced when trying to measure the redistributional effect of publicly provided goods and services places severe limitations on attempts to measure fiscal redistribution. Recent British and US studies of fiscal incidence have tended to allocate the benefits of government expenditure across income groups in line with their estimated consumption of government services. Government services that cannot be allocated specifically have usually been allocated using various