Arbeitspapier
Pigou meets mirrlees: On the irrelevance of tax distortions for the second-best Pigouvian tax
This paper extends the Mirrlees (1971) model of optimal income redistribution with optimal corrective taxes to internalize consumption externalities. It is demonstrated that the optimal second-best tax on an externality-generating good should not be corrected for the marginal cost of public funds. The reason is that the marginal cost of public funds equals unity in the optimal tax system, since marginal distortions of taxation are equal to marginal distributional gains. The Pigouvian tax needs to be modified, however, if polluting commodities or environmental quality are more complementary to leisure than non-polluting commodities are.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 3342
- Klassifikation
-
Wirtschaft
Externalities
Taxation and Subsidies: Efficiency; Optimal Taxation
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- Thema
-
marginal cost of public funds
optimal environmental taxation
optimal redistribution
externalities
Optimale Verteilung
Internalisierung externer Effekte
Second Best
Ökosteuer
Optimale Besteuerung
Theorie
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Jacobs, Bas
de Mooij, Ruud A.
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2011
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Jacobs, Bas
- de Mooij, Ruud A.
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2011
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