One of the first examples of earmarking was ship money, the tax paid by English seaports used to finance the Royal Navy.
The emphasis can be put on the final use of the revenues, on the vastness of the area financed from the money earned or on the type of the tax.
The arguments against earmarking come mostly from the traditional way of viewing the taxes where they were confined to compulsory, unrequited payments to the general government as defined by the OECD in 1988.
[2] In 2012, the Mercatus Center pointed out[5] the negative effects that dedicating tax revenues to specific expenditures can have on the policymakers.
As mentioned before, revenues of hypothecated taxes are often used to finance health care or education because in these sectors the aggregate preference can be easily revealed.
For example, in Egypt, the revenue earned from these taxes is used to help to cover health insurance and provide prevention and rehabilitation for students.
Besides the United Kingdom and Egypt, hypothecation helps to finance health care in many countries including Finland, the Republic of Korea, Portugal, Thailand and Belgium.
In the United Kingdom, the funds raised are dedicated to the BBC, but this type of hypothecation is also applied in many European countries.