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Jaeger, William K.. |
Recent literature has investigated whether the welfare gains from environmental taxation are larger or smaller in a second-best setting than in a first-best setting. This question has mainly been addressed indirectly, by asking whether the second-best optimal environmental tax is higher or lower than the first-best Pigouvian rate. Even this indirect question, though, has itself been approached indirectly, comparing the second-best optimal environmental tax to a proxy for its first-best value, an expression for marginal social damage (MSD). On closer examination, however, MSD becomes ambiguously defined and variable in a second-best setting, making it an unreliable proxy for the first-best Pigouvian rate. With these concerns in mind, the current analysis... |
Tipo: Working or Discussion Paper |
Palavras-chave: Optimal Environmental Tax; Second-best; Double Dividend; Tax Interaction Effect; Revenue Recycling; Tax Base Effect; Pigouvian Rate; Excess Burden; Environmental Economics and Policy; H21; Q5. |
Ano: 2009 |
URL: http://purl.umn.edu/50358 |
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