The main concern of the paper is the study of the combined long-run incidence of a selected tax (on profits or on factor incomes), the proceeds of which are spent on education. The analysis is done with the help of a neo-classical growth model modified so as to incorporate Harrod-neutral technological change induced by such expenditures. The authors show that such a policy leads to burdens in the short run and gains in the long run for the economy. A set of necessary conditions for minimization of discounted burdens (measured both in terms of global income and consumption) is obtained. Distributional effects of the policies is the subject of the last section of the paper.
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