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Environmental Taxation and Redistribution Concerns

Authors: Aigner, Rafael;

Environmental Taxation and Redistribution Concerns

Abstract

How is the optimal level of Pigouvian taxation influenced by distributive concerns? With second-best instruments, a higher level of income redistribution calls for a lower level of Pigouvian taxation. More redistribution implies higher distortions from income taxation. Pigouvian tax revenues become more valuable, and the optimal level of environmental taxation decreases. With first-best instruments, however, the relation between levels of redistribution and Pigouvian taxation is reversed. So second-best Pigouvian taxes are very different from their first-best counterpart – despite apparently identical first-order conditions.

Keywords

Optimal Income Taxation, Pigouvian taxation, comparative statics, externalities, second-best, Internalisierung externer Effekte, ddc:330, H23, Second Best, Ökosteuer, externalities, second-best, Einkommensumverteilung, comparative statics, Einkommensteuer, Optimale Besteuerung, D62, Pigouvian taxation, optimal income taxation, H21, Theorie, jel: jel:D62, jel: jel:H23, jel: jel:H21

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    popularity
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    influence
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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
9
Top 10%
Average
Average
bronze