A note on optimal taxation in the presence of externalities
In this paper, we reexamine the optimal tax problem with identical consumers in the presence of externalities by taking explicitly the interrelationship between externality and consumption into account. In setting out the optimal tax conditions in the presence of externalities, it is standard to follow Sandmo (1975) to employ the following assumptions: (i) separable externalities; and (ii) independent demands. We dispense with these restrictive assumptions and show the Sandmo’s “additivity property” where externalities only affect the tax formula for an externality generating good and do not affect other tax formulas.
|Date of creation:||16 Feb 2005|
|Date of revision:|
|Publication status:||Published in Discussion paper series (2005), 99: 1-7|
|Contact details of provider:|| Postal: |
Web page: http://www.otaru-uc.ac.jp/dept/econ/
More information through EDIRC
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.:
- Eytan Sheshinski, 2002.
"On Atmosphere Externality and Corrective Taxes,"
Discussion Paper Series
dp328, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
- Cremer, Helmuth & Gahvari, Firouz & Ladoux, Norbert, 1998. "Externalities and optimal taxation," Journal of Public Economics, Elsevier, vol. 70(3), pages 343-364, December.
- Bovenberg, A.L. & de Mooij, R.A., 1994.
"Environmental levies and distortionary taxation,"
Other publications TiSEM
4b32deaa-ec2f-4de7-b59b-9, Tilburg University, School of Economics and Management.
When requesting a correction, please mention this item's handle: RePEc:ota:busdis:10252/956. 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: (Miura, Chiho)
If references are entirely missing, you can add them using this form.