TAX REVENUE†FINANCED PUBLIC ABATEMENT AND WELFARE: A CONSUMPTION TAX CASE

Takumi Haibara

Review of Urban & Regional Development Studies, 2007, vol. 19, issue 2, 173-183

Abstract: This paper develops a model of public abatement financed either by a pollution tax or by a consumption tax. It shows that consumption tax revenue†financed public abatement raises welfare more than pollution tax revenue†financed public abatement does when the pollution tax rate rises. This result is worthwhile for environmental protection policy makers when they are determining the revenue source of public abatement.

Date: 2007
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