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

His credit was almost unlimited, and he could always raise as much money as he liked on an hypothecation of next year's wool.

From Station Amusements in New Zealand by Barker, Lady (Mary Anne)