Praxeology in Current AffairsTaxation
Excess Revenue from High Prices: What the State Gives, It Has First Taken
What happened. According to the final data on the execution of Greece’s state budget, VAT revenue in the nine months from January to September 2026 came to 23.062 billion euros. Excluding 306 million euros of VAT from the concession contract for the Egnatia Odos motorway, it exceeded the budget target by 1.093 billion euros; including that amount, by about 1.4 billion. Over the same period, payments included 131 million euros for the Fuel Pass, 136 million for the subsidy on road diesel, and 232 million for the extraordinary financial support for families with children (Ministry of National Economy and Finance). Insider, drawing on the detailed figures of Greece’s General Accounting Office, looks at the role of fuel. VAT on petroleum products reached 1.696 billion euros, 189 million above target and about 215 million more than in the first nine months of 2025. The excise duty on energy products, which is levied on the volume sold rather than on the price, came to 2.993 billion euros, about 212 million below target; the excess in fuel VAT did not even cover that shortfall. By September, more than 860 million euros had been paid out in support measures for diesel and gasoline at the pump, the Fuel Pass, support for families per dependent child, fertilizers, ferry services, and industrial electricity, and the cost for the whole year is expected to exceed 1 billion euros by a clear margin. The roughly 900 million euros of excess VAT that remain once fuel and the Egnatia Odos are set aside are barely enough to cover this spending, and only part of that sum is due to price rises; the rest, according to the report, comes from economic growth and from reduced tax evasion (Insider).
The praxeological view. The term “excess revenue” makes it sound as if something was left over that belonged to no one. In fact, it is money that households and businesses paid beyond what even the budget itself had forecast. VAT is a percentage of the price; when prices rise, the amount the state collects on every purchase rises automatically, without any new tax being voted. Part of this money then comes back as “support” against the very same high prices. Murray N. Rothbard, in Power and Market, treats taxation and government spending as two forms of binary intervention, and he recalls the order in which things happen:
“But the government cannot spend money until it obtains it as revenue—whether that revenue comes from taxation, inflation, or borrowing from the public.”
So the “support” is not added to incomes from somewhere else; it is part of those same incomes, coming back after a pass through the treasury. And it does not return to those who paid, nor in proportion to what each of them paid. VAT is paid by anyone who buys anything, from the pensioner to the student; the support goes to whoever the government designates each time, on criteria and in amounts that it sets itself. On the market, everyone earns what others are willing to pay for his services; who gets the support is decided politically. Rothbard describes this in the same work:
“Government subsidy creates a separate distribution process (not “redistribution,” as some would be tempted to say). For the first time, earnings are severed from production and exchange and become separately determined.”
The same figures show something else as well. The excise duty is collected per unit of quantity, and its shortfall, according to Insider, is due to lower fuel sales. The higher price did what every price does: it signaled scarcity, and buyers cut back. That is why, as we wrote about subsidies at the pump, a per-liter subsidy works against that signal.
The report examines whether the excess revenue is “enough” for the support. The praxeological question is a different one: why must the money first be collected from everyone, so that part of it can be handed back to whoever the state chooses?
See also: Murray N. Rothbard, Power and Market, chapter “Binary Intervention: Government Expenditures” — Glossary: redistribution · economic and political means · tax shifting — Map of Ideas: taxpayers and tax-consumers