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Pigovian tax - Wikipedia, the free encyclopedia A Pigovian tax is a tax levied to correct the negative externalities of an activity. For instance, a Pigovian tax may be levied on producers who pollute the environment to encourage them to reduce pollution, and to provide revenue which may be used to counteract the negative effects of the pollution. A Pigovian tax is considered one of the "traditional" means of bringing a modicum of market forces, and thus better market efficiency, to economic situations where externality problems exist. en.wikipedia.org /wiki/Pigouvian_tax   (640 words)

Reference.com/Encyclopedia/Pigovian tax A Pigovian tax is a tax levied to correct the negative social side-effects of an activity. Unlike most taxes, which are inefficient because they result in a deadweight loss, Pigovian taxes improve overall social utility as they tend to reduce a negative externality while raising tax revenue. The alternative, regulation, is viewed as having a higher cost to society because Pigovian taxes raise revenue, while regulation does not. www.reference.com /browse/wiki/Pigovian_tax   (513 words)

[No title] Pigovian taxes correct incentives for the presence of externalities and thereby move the allocation of resources closer to the social optimum. Taxes The tax would shift the supply curve for aluminum up by the size of the tax. Such a tax is said to internalize the externality because it gives buyers and sellers in the market the incentive to take account of the external effects of their actions. web.uvic.ca /~jyhyawch/Econ103/Chapter10.ppt   (1748 words)

SOLUTIONS TO TEXT PROBLEMS: Pigovian taxes are a useful way to reduce pollution because the tax can be increased to get pollution to a lower level and because the taxes raise revenue for the government. Tradable pollution permits are similar to Pigovian taxes but allow the firms to trade the right to pollute with each other.          Pigovian taxes are taxes enacted to correct the effects of a negative externality. oak.cats.ohiou.edu /~paxton/chap10.htm   (2429 words)

Value added tax: Facts and details from Encyclopedia Topic   (Site not responding. Last check: 2007-10-20) A tax is an involuntary fee paid by individuals or businesses to a state, or to functional equivalents of a state, including tribes, secessionist movements... A blank media tax (or blank media levy) is a government-mandated scheme in which a special tax or levy (additional to any general sales tax) is... A tax haven is a place where certain taxes are levied at a low rate or not at all.... www.absoluteastronomy.com /encyclopedia/v/va/value_added_tax.htm   (3522 words)

Centerfield: Gas tax An increase in the in the gas tax is a tax increase, therefore an increase in the gas tax is bad. When you add a gas tax on there of say 50cents, the monopolist has to cut his price by 50cents in order for the consumer to still have to pay the same amount out of her pocket, which is the profit-maximizing price/quantity combination. Pigovian theory: a "command-economy" approach to maximizing social utility; the theory that externalities can be internalized by taxations or subsidies when market failures create the externalities. www.centristcoalition.com /blog/archives/000508.html   (4967 words)

FREC 424 Natural Resource Economics -- Lecture 03 For simplicity, the tax of $T per unit could be applied to the firm's total output, or the pollution tax schedule could follow the marginal damage cost schedule; the firm's corrected incentives are the same in either case. The pollution tax paid by the firm might be distributed to the victims, but this weakens the victims' incentive to move away from the pollution or find other ways to reduce their exposures to the pollution. Conversely, Pigovian tax/subsidy schemes may fail in small-numbers cases where parties may have incentives to engage in strategic behaviors, such as polluters threatening more harm to increase the abatement subsidy payment, or victims threatening to expose themselves to additional harm to increase the polluter's tax burden or their own compensation. www.udel.edu /johnmack/frec424/424lec03.html   (1917 words)

[No title] The Pigovian tax is an ad valorem tax equal to the wtp at the optimum. Pollution taxes have however fallen out of favour with recognition that the information required for setting the tax level is not available to the control authority. Taxes have been replaced by marketable permits which offer all the benefits of pollution taxes without the need for costly or unobtainable information. lubswww.leeds.ac.uk /MKB/johnbowers/teaching/3360lectntes.doc   (1531 words)

[No title] Taxes: Be able to do numerical and graphical analysis of the incidence of taxes. Be able to explain why the imposition of a Pigovian tax can both generate tax revenue and a negative deadweight loss. Be able to explain why the imposition of a Pigovian tax can be equivalent to the use of pollution permits. blue.butler.edu /~rmain/Ec231/Word_Excel_PDF/MT2_Review_s2002.doc   (487 words)

[No title]   (Site not responding. Last check: 2007-10-20) The proposed reform is a gasoline tax, presumptive of emissions. It was found that a tax of 6.2 cents a liter (26 percent, ad valorem) would be suitable to complement abate- ment in a program aimed at reducing emissions from the 1995 vehicle fleet by about 70 percent. The low level of the tax is partly explained by the fact that abatement will, by then, have reduced average emission coefficients by 60 to 70 percent, so marginal emissions per liter, the base of a presumptive Pigovian tax on gasoline, are also diminished. www-wds.worldbank.org /servlet/WDSContentServer/WDSP/IB/1999/09/25/000178830_98101911401418/Rendered/INDEX/multi_page.txt   (8265 words)

Pigovian tax   (Site not responding. Last check: 2007-10-20) A tax shifts the marginal private cost curve ('''MPC''') up by the amount of the tax (to MPC + T). On the other hand, once a company has achieved the regulated level of pollution it has no incentive to further reduce it. Furthermore, over periods longer than 5 years, it appears that countries having higher green tax rates such as Norway, Sweden and Netherlands experience higher GDP growth and higher HDI growth rate. pigovian-tax.area51.ipupdater.com   (497 words)

Second-Best Pollution Taxes: An Analytical Framework and Some New Results This paper compares the second-best optimal tax on polluting consumption goods with the Pigovian tax, which would internalize marginal environmental damage at a second-best optimum. It is shown that the relationship between the optimal tax on polluting consumption and the Pigovian tax is determined by the substitutability between labour and polluting consumption or clean and polluting consumption, depending on whether a wage tax system or a commodity tax system is being considered. The key factor determining the relationship between the two taxes is gross substitutability between the two taxed goods. ideas.repec.org /a/bla/buecrs/v51y1999i1p31-38.html   (290 words)

externalities A Pigovian Tax placed on the production of the good would amount to a per-unit produced amount charged by the government to cover the cost of the extenality. It is also possible to think of a Pigovian tax as a subsidy. One of the most compelling arguments in favor of taxing these types of goods is that the tax increases welfare in the society. home.ubalt.edu /ntsbgerl/econ504/externality/external22.htm   (586 words)

Pigovian tax   (Site not responding. Last check: 2007-10-20) A Pigovian tax is a tax enacted to correct the effects of externalities ; they are named after economist Arthur Pigou. Unlike most taxes which are inefficient they result in a deadweight loss Pigovian taxes improve overall economic efficiency. This is the most wonderfully complete and comprehensible tax preparation guidebook on the market, and I buy the new edition every year. www.freeglossary.com /Pigovian_tax   (520 words)

Economist's View: Mankiw: Trade Pigovian Taxes for Permanent Income, Dividend, and Estate Tax Cuts Pigovian taxes both produce government revenue and correct a market failure arising from an externality like pollution. These taxes are a good idea in isolation since they solve market failure problems, so if we get to ignore political realities there is no need to trade one tax for another, Pigovian taxes can be imposed on their own merits. Taxes provide an incentive to buy smaller vehicles by raising the gas price, whereas direct technical standards do not provide any such incentive, as they do not affect the gas price. economistsview.typepad.com /economistsview/2006/04/mankiw_trade_pi.html   (2252 words)

Pollution Permits   (Site not responding. Last check: 2007-10-20) The textbook states that Pigovian taxes are preferred to regulation because the tax reduces pollution more efficiently. Anyone whose cost of reducing pollution by one ton is less than the tax, will act to eliminate the pollution rather than pay the tax. So instead of levying a tax, it has come up with the permit idea and let the market tell us the price for the quantity of pollution targeted. www.business.uca.edu /faculty/cjohnson/classnotes/pollutionpermits.htm   (256 words)

ECON-me: Pigovian fees Early in the 20th century, the English economist Arthur C. Pigou argued for the imposotion of taxes on generators of pollution. The Pigovian fee is not any emission fee; it is the marginal savings from pollution at the optimum pollution level. Well i meant that instead of imposing a tax, the government could provide incentives as in giving them credits(or i would suggest even reducing their tax) to motivate them to pollute less. alexmthomas.blogspot.com /2005/06/pigovian-fees.html   (376 words)

Pigovian tax   (Site not responding. Last check: 2007-10-20) Tax specialist in aspects of income tax, financial tax loops and share market tax benefits, from the individual to companies to family discretionary and/or unit trusts. Taxes collected include pay-roll tax, duties (formerly known as stamp duty), land tax and debits tax. Tax estimates for existing locations and forecast for areas of potential expansion. www.omniknow.com /common/wiki.php?in=en&term=Pigovian_tax   (1790 words)

Greg Mankiw's Blog: A Comeback for Pigou? In the past few days, I have run across a couple of articles (here and here), admittedly in relatively minor places, arguing for higher Pigovian taxes, such as a tax on gasoline or a tax on carbon. When the major was asked why would they want to tax junk food if the people that consume are usually low income (hence a regresive tax), the major answered that the tax was too small to have any significant effect. Again, Frog supports more Pigouvian taxes generally, even when slightly less efficient than a Coase solution in a limited context, because in a broader context one has to add in the negative consequences of taxes on other activities such as income or general consumption. gregmankiw.blogspot.com /2006/04/comeback-for-pigou.html   (2008 words)

Optimal Taxation with Labor, Capital and Environmental Taxes More recently, arguments in favor of such taxes were strengthened by pointing out the potential for a double dividend: in a world with pre-existing distortionary taxes environmental improvements might be cost free due to the efficiency gains from recycling Pigovian tax revenues to reduce other taxes. Bovenberg and DeMooij [1994] show that under some circumstances the optimal tax on polluting goods or inputs is lower than the Pigovian tax if the income tax is positive. Parry [1995] presents a partial-equilibrium analysis that breaks the effects of the environmental tax into several effects: the environmental effect, the revenue effect, and the tax-interaction effect. people.morehead-st.edu /fs/t.creahan/optimtax.htm   (812 words)

Pigovian tax   (Site not responding. Last check: 2007-10-20) A Pigovian tax is a tax enacted to correct the effects of negative externalities ; they are named after economist Arthur Pigou. Unlike most taxes, which areinefficient because they result in a deadweight loss, Pigovian taxesimprove overall economic efficiency. Examples ofPigovian taxes include taxes on alcohol, cigarettes, and gasoline. www.therfcc.org /pigovian-tax-41105.html   (66 words)

SSRN-Tax and Subsidy Combinations for the Control of Car Pollution by Don Fullerton, Sarah West Despite technological advances, an individual car's emissions still cannot be measured reliably enough to impose a Pigovian tax. We calculate the welfare improvement from a zero-tax scenario to the ideal Pigovian tax, and we find that 71 percent of that gain can be achieved by the second-best combination of taxes on gas, size, and vintage. A gas tax alone attains 62 percent of that gain. papers.ssrn.com /sol3/papers.cfm?abstract_id=235730   (423 words)

post   (Site not responding. Last check: 2007-10-20) Taxes Tax enforcement authorities then target individuals for a tax audit – a more or less detailed review of the income and tax-deductible expenses of the individual. Thus, tax collectors often monitor newspaper articles for stories about wealthy people who have lent art to museums for public display, because the artworks have then become subject to personal property tax. Taxes Their data for 2002 shows the following: (Table 2) The top 1% of taxpayers by income pay 33% of all individual income taxes, and 22. www.taxes-area.com /post/14   (715 words)

Studies on Policy Instruments with Economic Incentives   (Site not responding. Last check: 2007-10-20) At first, Pigou proposed a tax as a suitable means of equating private and social cost. An optimal Pigovian tax is equal to the marginal external cost at the optimal level of pollution. The theoretically correct Pigovian tax approach may well be effective, but impractical. www.jswme.gr.jp /edit/abst_e/vo04no03_174_183ge.html   (214 words)

Environmental Taxation - Empirical and Theoretical Applications If utility in part depends on past consumption and individuals are time-consistent, the socially optimal environmental tax is shown to be equal to the conventional Pigovian tax. In a second-best world where the social planner has a restriction on the future environmental tax level, the current optimal tax is no longer equal to the Pigovian tax. Given a simple model we show that the level and time path of the corresponding optimal environmental tax is affected by the assumption of habit formation; more specifically the stronger the habit, the higher the optimal level of environmental quality in steady state, and the faster the transition towards the steady state tax level. www.handels.gu.se /epc/archive/00002522   (810 words)

The Dems are Making a Mistake - Gas Tax Removal That is the point of a gas tax, to punish those who drive so that they are discouraged from driving, even if they have to drive to get to the job that doesn't pay them enough to fill up their cars. The gas tax is not a pigovian tax and was never intended to be. Paying for the tax repeal with the oil industry tax breaks is intended to draw attention to the billions of dollars we're giving to an industry with record profits. www.democraticunderground.com /discuss/duboard.php?az=view_all&address=364x1036105   (4429 words)

The Reality-Based Community: Consumption taxes in theory and politics Yes, the idea of abolishing the income tax and going to a national sales tax collected at point of purchase is a non-starter for operational reasons. There's no reason why an income tax adjusted to hit consumption spending only couldn't be made progressive by excluding the first $20,000 or so of annual spending, as in Laurence Seidman's USA Tax proposal. I'm not convinced that a USA Tax is the panacea some of its proponents (including Robert Frank) seem to think it is. For one thing, I'm still trying to figure out how you could handle homeownership and big medical bills under such a tax system. www.markarkleiman.com /archives/microeconomics_and_policy_analysis_/2004/08/consumption_taxes_in_theory_and_politics.php   (452 words)

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