The results of fiscal incidence studies depend upon the underlying utility
functions pertinent to the distribution of public good benefits among
income classes. Generally, the use of such functions is not explicitly
recognized. By taking, in the first instance, an extended approach to utility
based on an original Aaron-McGuire formulation and, in the second
instance, a new approach, it is concluded that the income-equalizing
tendencies of fiscal activities may be overstated when more conventional
analysis is employed.
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