Forced rider
A forced rider in economics is a person who is required, by government or other collective, to share in the costs of goods or services from which he or she does not benefit. Such goods are typically non-excludable.[1][2]
Theory
Public goods are non-excludable and non-rivalrous. As a result, some people may benefit from a public good without helping to cover the costs of production. This is known as the "free rider problem".[3][page needed][4][5]
Collective payment schemes, such as taxes, have historically been used to address the free rider problem. However compulsory payments may create situations in which individuals are required to contribute to the cost of public goods from which they receive no benefit. This is called the "forced rider problem". [6]
Forced riders in taxation
The forced rider has been cited in various authors' views concerning taxation.
- Pacifists are required to pay for national defense.[7][8][9][page needed]
- Environmentalists may be required to pay for public works projects, such as dams, which they feel destroy natural habitats in ways they do not condone.[7]
- Some people feel it is unfair for them to pay local school taxes when they have no children in the school system.
References
- ^ Cowan, Tyler. "Concise Encyclopedia of Economics". Public Goods. Library of Economics and Liberty. Retrieved 27 February 2013.
- ^ Austrian Methodology: The Preferred Tax Type
- ^ Hamowy, Ronald, ed. (2008). The Encyclopedia of Libertarianism. Thousand Oaks, CA: SAGE Publications, Cato Institute. ISBN 978-1-4129-6580-4. LCCN 2008009151. OCLC 750831024 http://books.google.com/books?id=yxNgXs3TkJYC.
{{cite encyclopedia}}: Missing or empty|title=(help) - ^ Providing Global Public Goods[dead link]
- ^ Multipart pricing of public goods bbs.cenet.org.cn
- ^ Public Goods and Public Choices
- ^ a b The Myth of Neutral Taxation
- ^ Are Public Goods Myths?
- ^ Modern Principles of Economics
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