Each environmental tax in the U.S. is designed to collect revenue for a trust fund used to clean up a particular pollution problem. Each might be intended to collect from a particular industry thought to be responsible for that pollution problem, but none represents a good example of an incentive-based tax designed to discourage the polluting activity itself. A different tax for each trust fund means that each tax rate is typically less than one percent. But each separate tax has an extra cost of administration and compliance, since taxpayers must read another set of rules and fill out another set of forms. This paper provides evidence on compliance costs that are high relative to the small revenue from each separate tax. In addition, an input-output model is used to show how current U.S. environmental tax burdens are passed from taxed industries to all other industries. Thus the extra cost incurred to administer each separate tax achieves neither targeted incentives not targeted burdens.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
5380.
Length: Date of creation: Sep 1996 Date of revision: Handle: RePEc:nbr:nberwo:5380
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Find related papers by JEL classification: H2 - Public Economics - - Taxation, Subsidies, and Revenue Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Laurence J. Kotlikoff & Lawrence H. Summers, 1988.
"Tax Incidence,"
NBER Working Papers
1864, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Other versions:
Kotlikoff, Laurence J. & Summers, Lawrence H., 1987.
"Tax incidence,"
Handbook of Public Economics,
in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 16, pages 1043-1092
Elsevier.
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