Benefit Principle in the Local Finance

Abstract

The article is devoted to the benefi t principle in sharing revenue sources between the state and local levels and in allocation of tax burden in the municipalities. The author describes subjects and instruments of taxation reflecting benefits of local costs, and proves that financing local costs by
intergovernmental transfers to the local budgets is harmful. On the base of analysis of the role of different revenue sources for local budgets, the conclusion of low role of benefit principle in the local finance in Russia is made.

Keywords:

local finance, local taxes, benefit principle