The UK Road Fund was set up in 1921 and financed by earmarked taxes, but was unsuccessful as a form of road finance and abandoned in 1937. The paper examines why earmarking failed and what problems arise for replacing road taxes by hypothecated road charges. These charges would need to be...

Non-uniform indirect taxes treat equals and those unequal differently (horizontal inequity and vertical redistribution). Horizontal inequity is caused by taste differences among similar households, but some excises are designed to reflect social, not revealed, preferences. We apply two...