Open AccessThe Taxation of Environmental Pollution: A Model for Tax Revenue-Environmental Quality Tradeoffs
Author(s) -
Hung-Ming Wu,
Keith Willett
Publication year - 2016
Publication title -
international journal of financial research
Language(s) - English
Resource type - Journals
eISSN - 1923-4031
pISSN - 1923-4023
DOI - 10.5430/ijfr.v8n1p65
Subject(s) - environmental tax , revenue , tax revenue , externality , tax rate , economics , environmental quality , constraint (computer aided design) , point (geometry) , environmental economics , microeconomics , econometrics , tax reform , public economics , macroeconomics , finance , mathematics , geometry , political science , law
The paper analyzes the Willamette River in Oregon. Here a model (combining the least-cost model and the constraint method of multi-objective programming) is used to determine the appropriate tax rate on environmental externalities, incorporating both revenue and environmental quality objectives. The study finds the following. (1) By using the optimal tax rate, the appropriate tax revenue is determined. (2) The efficient solution set (including tax revenue and water quality considerations) is found by using differing optimal tax rates. (3) The optimal point (solution) in the efficient solution set is chosen by the geometrical argument approach and trade-off analysis approach.