but while large shares of total tax revenues can be spent on transfers such a correspondence needs not and usually does not hold in every period as taxes finance nonbenefit expenditures as well likewise current benefit expenditure can be financed through nontax sources notably borrowing to the extent that the existence of taxes and benefits causes changes in market prices and household behaviour redistribution policies have an influence on pretax benefit market incomes and economic welfare which is not captured by looking at the amounts of taxes and benefits alone there is a voluminous literature on the consequences of tax or benefit reforms that alter incentives to earn and declare taxable income eg giertz et al these indirect or secondround effects of redistribution policies are at the heart of debates concerning their costeffectiveness