Optimal taxation in the presence of a congested public good and an application to transport policy
AbstractIn this paper we demonstrate that even if policies prior to reform have been rational, it is possible, in fact in certain policy areas likely, that a green tax reform, contrary to the perceived wisdom among economists, will be associated with a double-dividend, i.e. with both environmental and fiscal benefits. We first establish this theoretically by avoiding imposing potentially unrealistic separability assumptions, and by recognising that taxation involves administrative costs. To illustrate our theoretical results, we use graphical tools well-known from fishery economics to assess the effects of the introduction of a tax on road transport.
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Bibliographic InfoPaper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2011057.
Date of creation: 07 Dec 2011
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optimal taxation; congested public goods; externalities; administrative costs; green tax reform; double-dividend; transport policy; cost-benefit criteria;
Find related papers by JEL classification:
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other
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