Optimal pollution and foreign-investment taxes in a small open economy
This paper examines pollution and foreign-capital tax policies on the host country's welfare when foreign-investment tax credits are absent or present in the source country. In the absence of tax credits, the optimal policy is a pollution tax with a foreign-investment tax or subsidy. The presence of tax credits may, however, result in a higher investment tax but a lower pollution tax, leading to higher welfare but lower environmental quality in the host country. The source-country's tax credits may cause a switch in the host-country's capital subsidy to a tax, which may improve the environment.
Volume (Year): 7 (1998)
Issue (Month): 1 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/RJTE20 |
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/RJTE20|
When requesting a correction, please mention this item's handle: RePEc:taf:jitecd:v:7:y:1998:i:1:p:71-85. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.