Download or read book Vertical Tax Externalities in the Theory of Fiscal Federalism written by Mr.Michael Keen and published by International Monetary Fund. This book was released on 1997-12-01 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Vertical tax externalities between levels of government can occur in federal structures, with responses to the tax policies of one level of government affecting the tax base of the other. Such effects mostly arise when federal and state governments co-occupy the same tax base. This paper examines these externalities by considering their implications for a range of issues in fiscal federalism: the relationship between state and federal tax rates, the equilibrium levels of these taxes, the relevance of experience in federal countries for policy design in international settings, intergovernmental grants, and the assignment of tax powers among levels of government.
Download or read book Taxation of Externalities written by Yves Balcer and published by . This book was released on 1977 with total page 24 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Taxing Externalities written by Matthew Kotchen and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper asserts that reporting of the ratio of welfare gains to tax revenue should be standard protocol in economic analyses of externality correcting taxes. That this comparison might matter is somewhat of a "blind spot" in most economic analyses, for it plays virtually no role when economists recommend taxes to internalize externalities. A simple model illustrates how the ratio of welfare gains to tax revenue plays a central role in a political economy and efficiency framing of Pigouvian type taxes. The analysis also shows intuitive results about how the ratio is increasing in the marginal external costs and the equilibrium elasticity to a tax. The second part of the paper illustrates the wide range of potential results with application of carbon taxes to different fuels in the United States. For example, assuming a social cost of carbon (SCC) and a carbon tax equal to $50 per tonne, the central estimates imply ratios of 12.1 for coal, 0.36 for natural gas, and very close to zero for diesel and gasoline. When all four fuels are combined, the ratios indicate a more proportional balance between welfare gains and tax revenue, with overall estimates ranging between 0.7 and 2.8. The paper concludes with a general appeal for economists to pay more attention to the relative magnitudes of efficiency gains and tax revenue when analyzing and advocating for externality correcting taxes.
Download or read book Optimal Taxation in a Federal System of Governments written by Sebastian Krug and published by GRIN Verlag. This book was released on 2011-02-02 with total page 26 pages. Available in PDF, EPUB and Kindle. Book excerpt: Seminar paper from the year 2011 in the subject Economics - Finance, Christian-Albrechts-University of Kiel (Department of Economics), course: Seminar in Public Economics and Social Policy: Federalism and (De)Centralization, language: English, abstract: An implemented tax system causes distortions which leads to a minor overall welfare level compared to a system without taxes. This deviation in social welfare is often denoted by excess burden or dead weight loss (DWL) of taxation. So the traditional optimal taxation approach comprises the implementation of a tax system which minimizes the excess burden and hence the distortions caused by the levied taxes. Therefore, the policy maker has to anticipate possible behavioral adjustments of the market participants when choosing its optimal tax policy. Assuming the policy maker will do so all effects (i.e. distortions) caused by the tax system will be internalized which means that no fiscal externalities would arise from implementing the (optimal) tax system. However, the traditional optimal taxation approach abstracts from any intergovernmental relations as the existence of only one government and accordingly only one level with fiscal jurisdiction is assumed. The question here is whether and to what extent federal structures (i.e. multileveled government structures) affect the optimal tax policy decision. The first attempt to take into account the characteristics of a federal system related to optimal tax policy goes back to Gordon (1983) who applied the methodology of the traditional optimal taxation approach to fiscal federalism. Therein each unit of government (i.e. the federal and usually several state governments) decides independently how much of public goods to provide and in particular which tax policy to use in funding the provided public goods. Hence, we now consider a decentralized form of decision-making in which each unit of government chooses the optimal tax policy in the best interest of its own residents. As a consequence of this solely intrajurisdictional externalities are internalized analogous to the traditional optimization approach. Though, it isn’t obvious whether this solution is also optimal in the sense of an inter jurisdictional point of view. Sobel (1997), Wrede (1999) and also Keen/Kotsogiannis (2002) stated that a common pool problem emerges given that subordinated governments (i.e. state governments) are allowed to levy taxes as well as the federal government. This means that taxation at multiple levels lead to a shared tax base which is the fiscal analogue to the common property resource. Due to this overlap in tax bases any separately considered optimal tax policy at a certain level may affect the optimality character of the ...
Download or read book Taxing Externalities Without Hurting the Poor written by Mallesh Pai and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider the optimal taxation of a good which exhibits a negative externality, in a setting where agents differ in their value for the good, their disutility for the externality and their value for money, and the planner observes neither. Pigouvian taxation is the unique Pareto efficient mechanism, but corresponds to the planner putting higher welfare weights on agents who are richer. We derive the optimal tax schedule for both a narrow allocative objective and a utilitarian objective for the planner. The optimal mechanism might take a "non-market'' form and cap consumption, or forbid it altogether. The optimal mechanism is generically non-linear, and Pareto-inefficient.
Download or read book International Environmental Externalities and the Double Dividend written by Sebastian Killinger and published by Edward Elgar Publishing. This book was released on 2001-01-26 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt: 'In looking at the effects of ecological tax reform on allocation, this book addresses a very important issue. The results are interesting and have significant policy implications.' - Glenn Feltham, Canadian Tax Journal 'The book contains an excellent analysis of how environment taxation affects large countries that are highly integrated in world capital markets.' - Lans Bovenberg, CPB Netherlands Bureau for Economic Policy Analysis, The Netherlands The twin benefits of improving environmental quality and reducing tax distortions through the recycling of environmental tax proceeds prove an attractive policy objective. This book analyses the use of the double dividend concepts for evaluating ecological tax reforms. The author aims to analyse unilateral environmental policy measures thoroughly and to assess under which conditions a double dividend can be achieved. The analysis is undertaken in the context of international capital mobility and cross-border externalities. He also includes a discussion of an empirically relevant example for an ecological tax reform scenario in Germany - the DIW proposal.
Download or read book Taxing Externalities Under Financing Constraints written by Florian Hoffmann and published by . This book was released on 2014 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: We consider an economy where production generates externalities, which can be reduced by additional ጿirm level expenditures. This requires fiijrms to raise outside financing, leading to deadweight loss due to a standard agency problem vis-à-vis outside investors. Policy is constrained as fiijrms are privately informed about their marginal cost of avoiding externalities. We ጿirst derive the optimal linear pollution tax, which is strictly lower than the Pigouvian tax for two reasons: First, higher ጿirm outside ጿinancing creates additional deadweight loss; second, through redistributing resources in the economy, a higher tax reduces average productive efficiency. We analyze various instruments that achieve a more efficient allocation, in particular, nonlinear pollution taxes, which can no longer be implemented through a tradable permit scheme alone, and grants tied to loans, which are frequently observed in practice.
Download or read book Environmental Protection and Optimal Taxation written by Gunnar S. Eskeland and published by World Bank Publications. This book was released on 2000 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Simple unweighted cost-effectiveness analysis remains relevant and correct when one introduces costly redistribution and revenue generation.
Download or read book Optimal Fiscal Policy and the Environment written by Ms.Jenny Elisabeth Ligthart and published by International Monetary Fund. This book was released on 1998-09-01 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper studies the setting of optimal fiscal policy in a second-best world with environmental externalities. The optimal second-best pollution tax is shown to lie below the first-best Pigovian tax, particularly if substitution between labor and polluting intermediate inputs is easy, the labor supply curve is more elastic, and preexisting taxes are large. The optimal level of public abatement is derived from the modified Samuelson rule and is larger if society cares more for the environment, public funds are inexpensive, and public abatement is relatively productive. The analysis also shows that the Samuelson rule should be revised if allowance is made for nonseparabilities in preferences.
Download or read book Environmental Tax Reform written by Mr.Dirk Heine and published by International Monetary Fund. This book was released on 2012-07-01 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper recommends a system of upstream taxes on fossil fuels, combined with refunds for downstream emissions capture, to reduce carbon and local pollution emissions. Motor fuel taxes should also account for congestion and other externalities associated with vehicle use, at least until mileage-based taxes are widely introduced. An examination of existing energy/environmental tax systems in Germany, Sweden, Turkey, and Vietnam suggests that there is substantial scope for policy reform. This includes harmonizing taxes for pollution content across different fuels and end-users, better aligning tax rates with values for externalities, and scaling back taxes on vehicle ownership and electricity use that are redundant (on environmental grounds) in the presence of more targeted taxes.
Download or read book Taxing Externalities written by Matthew Kotchen and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper asserts that reporting of the ratio of welfare gains to tax revenue should be standard protocol in economic analyses of externality correcting taxes. That this comparison might matter is somewhat of a "blind spot" in most economic analyses, for it plays virtually no role when economists recommend taxes to internalize externalities. A simple model illustrates how the ratio of welfare gains to tax revenue plays a central role in a political economy and efficiency framing of Pigouvian type taxes. The analysis also shows intuitive results about how the ratio is increasing in the marginal external costs and the equilibrium elasticity to a tax. The second part of the paper illustrates the wide range of potential results with application of carbon taxes to different fuels in the United States. For example, assuming a social cost of carbon (SCC) and a carbon tax equal to $50 per tonne, the central estimates imply ratios of 12.1 for coal, 0.36 for natural gas, and very close to zero for diesel and gasoline. When all four fuels are combined, the ratios indicate a more proportional balance between welfare gains and tax revenue, with overall estimates ranging between 0.7 and 2.8. The paper concludes with a general appeal for economists to pay more attention to the relative magnitudes of efficiency gains and tax revenue when analyzing and advocating for externality correcting taxes.
Download or read book The Distributional Aspects of a Tax on Externalities written by Efraim Sadka and published by . This book was released on 1976 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Externalities Incentives and Economic Reforms written by International Monetary Fund and published by International Monetary Fund. This book was released on 1990-01-01 with total page 40 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper emphasizes the role of institutions and incentives in the presence of externalities. An economy with multiple public decision makers is likely to experience “overspending,” “undertaxing,” “overborrowing,” and “overinflation” unless effective institutions exist for overcoming coordination failure. External financing may weaken incentives for adjustment over the longer run unless assistance is made conditional on fundamental institutional reforms. The paper also analyzes reforms that strengthen incentives to provide effort. Uncertainty regarding future taxes reduces present effort and the responsiveness of output to market signals. In addition, the paper addresses the adverse effects of bank insurance and soft budget constraints.
Download or read book Vertical Externalities in Tax Setting written by Timothy Besley and published by . This book was released on 1998 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: A common feature of federal systems is that tax bases are joint property. Consequently, state and federal tax setting decisions are interdependent. Our aim here is to put forward a rudimentary theoretical analysis of this phenomenon, and to use the theory as a framework for econometrically estimating the magnitude of the responses. We find that when the federal government increases taxes, there is a significant positive response of state taxes. For example, a 10-cent per gallon increase in the federal tax rate on gasoline leads to a 3.2-cent increase in the state tax rate.
Download or read book Vertical Tax Externalities in the Theory of Fiscal Federalism written by Michael Keen and published by . This book was released on 2006 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: Vertical tax externalities between levels of government can occur in federal structures, with responses to the tax policies of one level of government affecting the tax base of the other. Such effects mostly arise when federal and state governments co-occupy the same tax base. This paper examines these externalities by considering their implications for a range of issues in fiscal federalism: the relationship between state and federal tax rates, the equilibrium levels of these taxes, the relevance of experience in federal countries for policy design in international settings, intergovernmental grants, and the assignment of tax powers among levels of government.
Download or read book Macroeconomic Externalities written by Jonas Agell and published by . This book was released on 1991 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Should We Tax Internalities Like Externalities written by Donald B. Marron and published by . This book was released on 2018 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Does the traditional rationale for taxing externalities also apply to internalities? Yes, if the goal is maximizing efficiency. Efficient taxes reflect any harms consumers overlook, whether to others or themselves. Yes with caution, if the goal also includes equity. Internality taxes fall most heavily on consumers who overlook future costs, a group that tends to have lower incomes. No if the goal is improving the well-being of people who consume harmful products. That paternalistic goal generally implies lower taxes than do efficiency or welfare maximization. In fact, the optimal paternalistic tax is often zero.
