Premium
International Capital Competition and Environmental Standards
Author(s) -
Chao ChiChur,
Yu Eden S. H.
Publication year - 1997
Publication title -
southern economic journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.762
H-Index - 58
eISSN - 2325-8012
pISSN - 0038-4038
DOI - 10.1002/j.2325-8012.1997.tb00071.x
Subject(s) - economics , government (linguistics) , public economics , government revenue , capital (architecture) , welfare , revenue , finance , market economy , archaeology , philosophy , linguistics , history
This paper examines the welfare effects of capital taxation and environmental standards with and without a government spending constraint or international tax credits. This analysis delineates the intricate linkages of the two policy measures to both private income and government welfare. Loosening environmental control leads to more capital tax revenue for the government. The optimal capital tax rate may be of any sign, depending upon the ranking of the weights of government objectives and private utility. The same criterion also applies in determining how stringent the optimal environmental standards should be.