hypothecation

American  

[hahy-poth-i-key-shuhn] / haɪˌpɒθ ɪˈkeɪ ʃən /

noun

1. the act of pledging movable property, stocks, income-generating contracts, etc., to a creditor as security without actual transfer of ownership.

   The laws of Solon permitted hypothecation but forbade personal slavery for debt.

2. British Government. the act or practice of designating a specific tax to pay for a specific expenditure.

   Hypothecation is a dangerous route to go down; if property taxes are used to pay for infrastructure, does that mean those who don’t own property can’t walk on the sidewalks?

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Etymology

Origin of hypothecation

First recorded in 1655–65; hypothec(ate) ¹ ( def. ) + -ation ( def. )

Example Sentences

Even though that’s what would happen under the current system of hypothecation of tax revenues in the US.

From Forbes • Jun. 10, 2014

Chancellor Gordon Brown was persuaded, against his instincts, to agree to "hypothecation" – earmarking certain taxes specifically for schools and hospitals.

From The Guardian • Apr. 7, 2011

There are strong democratic, political and economic arguments for the hypothecation of tax to support causes that have both government and public approval.

From The Guardian • May 18, 2010

Brokers often hold such stock in the brokerage firm's name, and if the customer signs a "hypothecation agreement"�as he is frequently asked to�the broker has the right to borrow from banks on his stock.

From Time Magazine Archive

The provision that at least no judicial hypothecation should be made on an un-insured house is found in the Darmstadt law of 1777, § 13, and in that of Mainz of 1780, art.

From Principles of Political Economy, Vol. II by Roscher, Wilhelm