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Topic: Pigouvian tax

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  Greg Mankiw's Blog: The Pigou Club Manifesto
Higher gasoline taxes, perhaps as part of a broader carbon tax, would be the most direct and least invasive policy to address environmental concerns.
A basic principle of tax analysis -- taught in most freshman economics courses -- is that the burden of a tax is shared by consumer and producer.
Greenspan may well be right that the gas tax is an economic policy with positive spillovers to foreign affairs.
gregmankiw.blogspot.com /2006/10/pigou-club-manifesto.html   (664 words)

  Tax - Wikipedia, the free encyclopedia   (Site not responding. Last check: )
Taxes may be paid in cash or kind (although payments in kind may not always be allowed or classified as taxes in all systems).
A carbon tax is a tax on the consumption of carbon-based non-renewable fuels, such as petrol, diesel-fuel, jet fuels and natural gas.
A capital gain tax is the tax levied of the profit realised upon the sale of an asset.
www.usindexlist.de /keyword/Tax.php   (2886 words)

 Excise Taxes: From The Encyclopedia of Taxation and Tax Policy
Excise taxes are an example of what have been traditionally called indirect taxes: taxes that are imposed on a transaction rather than directly on a person or corporation.
Taxes on "gas-guzzling" automobiles and gasoline can be explained as a kind of Pigouvian (corrective) tax to reduce the divergence of the private and social costs relating to pollution or congestion.
Such taxes are usually an imperfect technique for internalizing externalities, because an efficient Pigouvian tax should be related to the marginal damage caused by an activity, which is not necessarily proportional to the level of consumption.
www.urban.org /url.cfm?ID=1000527&renderforprint=1   (1837 words)

 SUOMEN YMPÄRISTÖVEROTUS   (Site not responding. Last check: )
Taxes are supported, because they are cost-effective (the desired reduction of pollution is reached with minimum cost), they reduce the socalled remainder pollution and they encourage developing technologies that conserve nature.
Tax differentiation in favour of unleaded petrol promotes the consumption of unleaded petrol by levying a lower tax on the rate on unleaded petrol.
The tax is called the additional tax and the tax rates vary according to the material of the containers.
hkkk.fi /~tammelin/envicom98/susanna2.html   (2744 words)

 The Tax Foundation - Raising Gas Taxes: The "Pigou Club" vs. the "Coase Club"
Unlike the current gas tax which is mostly designed to raise revenue for transportation, recent proposals aim to impose what economists call a “Pigouvian” tax on gas, aimed at curbing gas consumption and correcting for “negative externalities” like pollution and threats from hostile foreign countries.
In contrast, the goal of Pigouvian taxes is not to raise revenue, but to provide federal lawmakers with a mechanism to fine-tune markets toward a higher level of efficiency than the free market could achieve without their guidance.
The Tax Policy Blog is the official weblog of the Tax Foundation, a non-partisan, non-profit research organization that has monitored tax policy at the federal, state and local levels since 1937.
www.taxfoundation.org /blog/show/1956.html   (1004 words)

 The Tax Foundation - Gasoline Taxes: User Fees or Pigouvian Levies?
Pigouvian taxes are designed to correct what economists call “market failures” or “negative externalities” that impose spillover costs on society.
Raising gasoline taxes for Pigouvian purposes advances a dangerous view of tax policy, where government attempts to use the tax code as a tool to centrally plan economic decisions.
The tax system’s central aim should be to minimize distortions in the economy, and to interfere as little as possible with the decisions of free people in the marketplace.
www.taxfoundation.org /news/show/2048.html   (1816 words)

 Environmental Consideration in Tax Policy Design
Such tax rates depend on financing assumptions, on the ownership structure of the underlying assets, and whether the investor is taxable or is in a special institutional or pension fund situation.
Environmental considerations in tax design, while dealing with the particular rather than the general, were thought to be quantitatively of second order in aggregate; and in no way requiring any major rethinking on the overall directions for tax design economywide on efficiency and distributional grounds.
The VAT is often the central part of the tax reform component which, in turn, is seen as the tax mechanism is to contribute to a reduction in the public sector deficit.
idrinfo.idrc.ca /archive/corpdocs/118121/Environmental.htm   (6076 words)

 [No title]
Taxes on motor fuels, pesticides, fertilisers and batteries are examples of this class of environmental tax.
Environmental tax reform recycles the revenue that is raised by environmental taxes by a tax reduction.
In the case of an energy tax, the effects on sectoral competitiveness are small, because the loss of competitiveness from an increase in fuel costs as a result of the tax is offset by a gain in competitiveness from a decrease in labour costs (Barker, 1997).
wms-soros.mngt.waikato.ac.nz /NR/rdonlyres/edlfkw7zno2zdw4ktgpkwqq72uazaqdc2kwfhpsxs7434o3tbtmhnho6nbhv2ggmz4wfieuy6gwkc3m7btquiad7ste/ConceptualIssues.doc   (6252 words)

 Destabilizing Speculation - Global Policy Forum - Social and Economic Policy
Critics of the Tobin tax often point to the fact that the tax is so small (1/10 percent) that it would not deter speculators from attacking over-valued fixed exchange rates where they anticipate double-digit percent gains.
Though the Tobin tax would raise marginally the cost of transacting, this cost would still be lower than it used to be owing to innovations in electronic transactions technologies, and the market was not thin in the past when transactions costs were higher.
Thus, the real issue is how to design a tax that takes account of all the methods and margins of substitution that investors have for changing their patterns of activity to avoid the tax.
www.globalpolicy.org /socecon/glotax/currtax/palley1.htm   (5679 words)

 2007 January « The Everyday Economist
In my previous post on Pigouvian taxes, I made the claim that the tax penalizes individuals who live in the furthest proximity to their job.
Pigouvians claim that if the gas tax is raised, individuals will reduce gasoline consumption by using alternative methods of transportation, purchasing new vehicles, and moving closer to work.
In essence, the Pigouvian tax on gasoline says to Americans that they are unable to make decisions on their own and seeks to forcibly change their behavior through government coercion.
everydayecon.wordpress.com /2007/01   (2344 words)

A Pigouvian tax is " a tax levied upon each unit of pollution in an amount just equal to the marginal damage it inflicts upon society at the efficient level of output."
Figure ES2 indicates the effects of a Pigouvian tax on a firm producing a negative externality such as pollution.
In order to tax polluting firms the government or enforcing body must be able to determine which activities produce pollution, determine which pollutants do the harm and finally come up with some estimate on the value of the damage being caused.
users.hunterlink.net.au /~ddhrg/econ/ext1.html   (2675 words)

 Economics 309: Public Finance – Lecture 3
In effect, the tax attempts to serve as a price for the un-priced input (such as clean air), as judged by the quantity of output.
The optimal Pigouvian tax would be equal to the marginal damage that would be created if the firm were producing at its optimal level of output.
One very nice feature of Pigouvian taxes is that they bring in tax revenue (although these taxes may be expensive to enforce).
www.faculty.econ.northwestern.edu /faculty/witte/pf/handouts/externcont.html   (1533 words)

Pigouvian taxation has been advocated in the EU for different reasons ranging from environmental considerations to employment.
The Pigouvian policy is implemented via emission taxes for the big users (industry and electricity generation) and via a combination of emission standards and fuel taxes for the smal consumers (transport and residential).
The revenue of the tax is returned via reductions in social security contributions.
siti.feem.it /worldcongress/abs1/proost.html   (254 words)

 NBER Research Summary
An environmental tax on pollution with a lump sum rebate of proceeds has the same economic impact as a cap-and-trade system under which the tradable permits are given to economic agents at no cost.
For example, imposing a small tax on a polluting input used in production and using the revenue to lower a pre-existing labor tax is equivalent to subsidizing clean inputs used in production through an increase in a pre-existing labor tax.
Fullerton; I. Hong and G. Metcalf, "A Tax on Output of the Polluting Industry Is Not a Tax on Pollution: The Importance of Hitting the Target," NBER Working Paper No. 7259, July 1999, and in Behavioral and Distributional Effects of Environmental Policy, C. Carraro and G. Metcalf, eds.
www.nber.org /reporter/summer01/metcalf.html   (2758 words)

We construct a simple analytical general equilibrium model to calculate the optimum tax rate on the output of the polluting industry, in terms of key behavioural parameters, and we compare this imprecisely-targeted tax to an ideal tax on pollution.
We first use the model to calculate the optimum tax rate on the output of the polluting industry, in terms of key behavioural parameters, and we compare this imprecisely-targeted tax to an ideal tax on pollution.
If a tax on emissions cannot be implemented but rather a tax on output of a polluting good is used, we find a close connection between the optimal output tax and the optimal Pigouvian tax.
www.feem.it /Feem/Pub/Publications/WPapers/WP2000-046.htm   (694 words)

 Lecture_6_2_part_3b   (Site not responding. Last check: )
Taxing emissions at marginal cost would support the programme that respects the emission limits; however other programs with the same net cost to the firm would be possible, which would not obey the emission limits.
As in the linear economic model we propose to use the marginal cost of emission constraints, obtained from sensitivity analysis, as an emission tax to induce a producer to observe the emission limits.
Taxing emissions at marginal cost defines the appropriate incentive for the rational producer to observe the emission constraints.
ecolu-info.unige.ch /recherche/mutate/content/virtual_campus/module1/chapt6/lecture6_2/lecture6_2_part_3/Lecture_6_2_part_3.htm   (1587 words)

 Comparing specific and ad valorem Pigouvian taxes and output quotas. | Economics   (Site not responding. Last check: )
One remedy for this inefficiency is to impose a Pigouvian tax equal to the marginal external damage associated with the good.
A Pigouvian tax is more efficient the closer is the link between the traded quantity of the good and its total external damage.
We know of no actual tax system in which both specific and ad valorem taxes are simultaneously applied to the same good; the more common approach is to impose either a specific or an ad valorem tax.
www.allbusiness.com /periodicals/article/581763-1.html   (1022 words)

 Lecture 1.4.4   (Site not responding. Last check: )
In a previous lecture we have explored the principles of Pigouvian taxation for internalising the pollution emission externalities in a cost minimising firm.
Taxing emissions at marginal cost would support the programme that respects the emission limits; however other programmes with the same net cost to the firm are possible, which would not obey the emission limits.
Taxing emissions at marginal cost defines the appropriate incentive for the rational producer to satisfy the emission constraints.
ecolu-info.unige.ch /~haurie/mutate/Mutate_final/Lectures/Lect_1_4_4/lect_1_4_4.htm   (1921 words)

 PPA 723 -- Lecture #22 -- Externalities   (Site not responding. Last check: )
A Pigouvian Tax is a tax levied on each unit of output in an amount equal to the marginal damage that it inflicts at the efficient level of production (see figure 18.2).
In that case, a Pigouvian tax is a possible fallback.
The end result is that the tax or permit price equals the marginal abatement cost of the last unit of pollution prevented.
classes.maxwell.syr.edu /pa723/lectures/723lct22.html   (838 words)

 Megan McArdle (September 20, 2007) - Are high prices as good as a Pigouvian Tax?
This is a Pigovian tax with the proceeds going to Saudi Arabia rather than the US Treasury, but if Mankiw is right that a carbon tax would reduce carbon emissions, then these high oil prices should be instrumental in reducing oil consumption, carbon emissions, and, ultimately, the pace of global warming.
Even if all the tax is rebated it probably would not be rebated to each individual in the exact amount that he or she spends.
In the second, the new tax is calculated based on estimates of how you will react to it so that your tax burden after you've cut will be equal to your burden before but if you don't cut, it will be higher.
meganmcardle.theatlantic.com /archives/2007/09/are_high_prices_as_good_as_a_p.php   (7356 words)

 The Everyday Economist
The “efficiency” of the gas tax, which seems to be the highlight of Frank’s piece is a suspect concept.
The idea of an efficient tax to correct for a market failure such as an externality is based on Pigouvian welfare economics, which sees the tax as Pareto-improving.
Advocates of such taxation often ignore the problems of attempts to aggregate preferences and valuation given the inherent difficulty in doing so because of the fact that knowledge is dispersed and cannot be communicated to a single mind.
everydayecon.wordpress.com   (2395 words)

 Essays on Taxation and the Environment
  In particular, the textbook case of a tax on a unit of pollution (a Pigouvian tax) is far from widely used, mainly due to various measurement and other administrative difficulties.
  Using a general equilibrium model, the optimal emissions and output taxes are analytically derived for the case with a pre-existing labor tax.
The third essay focuses on the effects of firms’ behavioral characteristics on the optimal environmental tax policy.
www.eco.utexas.edu /graduate/Hong/abstract.html   (496 words)

 SSRN-Essays on Uncertainty and Decision-Making in Environmental Economics by Paulus Mensink
As a result, to determine the Pigouvian tax level, a regulator needs to know pollution abatement costs, information that is privately owned by individual pollutors.
This thesis shows there exists a non-linear tax system, the so called differential tax that triggers firms to reveal their abatement costs truthfully and will lead to socially optimal abatement levels instantly, thereby reducing social costs compared to the iterative solution.
Under those circumstances the regulator is needs a tax system that is flexible with respect to falling abatement costs through innovation (please recall that lower marginal abatement costs demand a lower Pigouvian tax) as well as keeps incentives for innovation - created by pollution taxes after innovation - upright.
papers.ssrn.com /soL3/Delivery.cfm/SSRN_ID736843_code239811.pdf?abstractid=736843&mirid=2   (707 words)

 [nep-pub] 2005-04-16, 6 papers   (Site not responding. Last check: )
The Pigouvian Tax Rule in the Presence of an Eco-Industry Alain-Désiré Nimubona; Bernard Sinclair-Desgagné 2.
The distortion created by the nonzero capital tax in consumption goods sector, given the other capital tax is set at zero, is in no way explosive in nature, since economic agents can avoid the compounding tax liabilities simply by shifting depreciated capital.
Although taxes matter for supply of both reported and non-reported labor, the impact is not strong.
lists.repec.org /pipermail/nep-pub/2005-April/000338.html   (1045 words)

A Pigouvian tax is generally preferable to a Pigouvian subsidy because:
  the tax generates revenues for the government whereas the subsidy requires the government to raise revenues elsewhere.
The rule for setting a Pigouvian tax is as follows: calculate the socially efficient level of output, at which the marginal social cost (MSC) is equal to the marginal benefit (MB), and set the tax equal to the marginal damages at that level of output.
www.chass.utoronto.ca /~mcmillan/sq6_soln.htm   (1316 words)

 ArgMax Economics Weblog: Future of the Flat Tax
Broadening the base means ridding the tax code of the special deductions, credits, exemptions, and allowances that currently shield about half of all income from federal income tax.
If, on the other hand, these provisions were Pigouvian in nature -- that is, set-up to encourage socially beneficial behaviors (like a tax credit for R&D) or discourage socially bad behavior (like polluting) -- then getting rid of them would not be a good idea from an efficiency perspective.
Certainly, there is a mix of special interests and Pigouvian tax adjustments in the tax code.
www.argmax.com /mt_blog/archive/000204.php   (532 words)

 [No title]
But for this to be the case, a significant increase in taxes is necessary to achieve the desired degree of aggregate change in behavior.
In Oregon, 70% of taxes on labor and capital were displaced, corporate income tax was eliminated, and the poor and middle-class households were exempt from personal income taxes (Durning and Bauman 75).
The Water Consumption Tax should be introduced in Vermont; not only would it preserve water in general, it would drastically reduce the waste water we generate, and therefore cut back on water pollution in general.
www.uvm.edu /~gflomenh/GRN-TAX-VT-PA395/papers/paper2/Davis2.doc   (1822 words)

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