Meaning & use

benefit principle

noun·Academictechnicalfinance

Last updated

UK/ˈbenɪfɪt ˌprɪnsəpl/
US/ˈbenɪfɪt ˌprɪnsəpəl/

Meanings

  1. nounsingulartechnicalfinance

    The idea that people who receive a public service should pay for it in proportion to the benefit they get.

    Grammar: Usually used with 'the': the benefit principle. It names an idea, not a physical thing, so it is not countable.

    Patterns

    • the benefit principle
    • apply the benefit principle
    • under the benefit principle

    Under the benefit principle, drivers who use the roads most should pay the highest road taxes.

    The city funded the new swimming pool by charging entrance fees, a clear application of the benefit principle.

    Economists often contrast the benefit principle with the ability-to-pay principle.

  2. nounsingularbusiness

    A rule in accounting or management that a cost should be recorded only when it produces a real gain.

    Grammar: Also used with 'the'. This sense is less common and mainly appears in business writing.

    Patterns

    • the benefit principle in accounting
    • apply the benefit principle to something

    The auditor explained the benefit principle: spending is justified only if it brings measurable value.

    Applying the benefit principle, the company delayed the purchase until the savings were clear.

Common combinations

apply the benefit principle
Lawmakers tried to apply the benefit principle when they set the new fuel tax.
under the benefit principle
Under the benefit principle, users of the park should cover its maintenance costs.
the benefit principle of taxation
Her essay compared the benefit principle of taxation with other fairness rules.
contrast the benefit principle with something
The lecture contrasted the benefit principle with the ability-to-pay approach.

Synonyms and how they differ

user-pays principle
This is a plainer everyday phrase for the same idea; 'benefit principle' is the more formal term used in economics.

Word family

benefit noun
A helpful or good effect; the root word of the phrase.
beneficial adjective
Producing a good result; describes the kind of effect the principle is about.

Commonly confused: benefit principle or ability-to-pay principle?

benefit principle vs ability-to-pay principle

This says people should be taxed according to how much they can afford, not according to what they receive. It is often contrasted with the benefit principle.

Practice

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