Optimal Redistributive Taxation in a Multiexternality Model

Paul Eckerstorfer

FinanzArchiv: Public Finance Analysis, 2013, vol. 69, issue 1, 115-128

Abstract: This paper extends the previous literature on optimal redistributive taxation in the presence of externalities to a multiexternality setting. While taxes on income and on 'clean' commodities are still unaffected by the externalities, which confirms previous results, I find that the existence of more than one externality-generating commodity has important implications for the optimal Pigouvian tax rates. In general the Pigouvian parts of taxation depend also on the externalities induced by the consumption of the other commodities, implying that the interdependence of the externality-generating commodities is relevant for tax policy.

Keywords: optimal taxation; externalities (search for similar items in EconPapers)
JEL-codes: D82 H21 H23 H24 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Optimal redistributive taxation in a multi-externality model (2011)
Working Paper: Optimal redistributive taxation in a multi-externality model (2011)
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DOI: 10.1628/001522108X663497

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