Cover: A Critique of Tax Based Cost

A Critique of Tax Based Cost

Published 1975

by James P. Smith

Purchase Print Copy

 Format Price
Add to Cart Paperback23 pages $20.00

Examines the theoretical difficulties inherent in basing social investment decisions solely on considerations involving the additional tax payments and tax receipts the investment generates. It has often been suggested that it may be appropriate to evaluate the social costs of government investments by the tax payments required to finance the investment and to value the social benefits by the tax receipts that result from the additional income attributed to the investment. The conceptual issues raised here are quite general and could be applied to a wide variety of government financed investments, but in this paper it is applied to manpower training programs. More precisely, the paper will investigate the conditions under which the true social cost/benefit ratio is related to a cost/benefit ratio where costs are defined only as the tax dollars used to finance manpower programs and benefits are defined as the tax receipts from the net earnings gains due to the manpower program. 23 pp.

This report is part of the RAND paper series. The paper was a product of RAND from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.