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Taxation

2014-04-28

Positional preferences in time and space: Optimal income taxation with dynamic social comparisons

This paper concerns optimal redistributive non-linear income taxation in an OLG model, where people care about their own consumption relative to (i) other people's current consumption, (ii) own past consumption, and (iii) other people's past consumption. We show that both (i) and (iii) affect the marginal income tax structure whereas (ii) does not. We also derive conditions under which atemporal and intertemporal consumption comparisons give rise to exactly the same tax policy responses.

2013-11-23

Environmental Policy in the Presence of an Informal Sector

We demonstrate how the presence of an untaxed informal sector can sharply lower the cost of environmental and energy tax policy. The mechanism involves substitution between formal and informal labor supply: energy or environmental taxes can improve the efficiency of the tax system by drawing activity into the formal sector.

2013-10-04

Fossil Fuel and Food Tax Incidence in Ethiopia

Most studies suggest that environmental taxes are regressive, making them less attractive policy options. The general objective of this paper is to analyze and compare fossil fuel and food tax incidence in Ethiopia in different expenditure groups of households considering urban and rural parts of Ethiopia separately.

2013-09-15

Veblen’s theory of the leisure class revisited: implications for optimal income taxation

Several previous studies have demonstrated the importance of relative consumption comparisons for public policy. Yet, almost all of them have ignored the role of leisure for status comparisons. Inspired by Veblen (The theory of the leisure class. Macmillan, New York, 1899), this paper assumes that people care about their relative consumption and that leisure has a displaying role in making relative consumption more visible, based on a two-type model of optimal income taxation.

2013-08-06

Who Should Bear the Administrative Costs of an Emissions Tax

All environmental policies involve costs of implementation and management that are distinct from pollution sources’ abatement costs. In practice, regulators and sources usually share these administrative costs. We examine theoretically an optimal policy consisting of an emissions tax and the distribution of administrative costs between the government and regulated sources of pollution. Our focus is on the optimal distribution of administrative costs between polluters and the government and the optimal level of the emissions tax in relation to marginal pollution damage.

2013-05-30

Travel Mode Choice and Impact of Fuel Tax in Beijing

As an international metropolitan area undergoing rapid development, Beijing is facing a sharp rise in the volume of motor vehicles and mobility, which has become the major contributor to the air pollution in this city.

2013-03-01

Sweden’s CO2 tax and taxation reform experiences

A CO2 tax assures that different fossil fuels are taxed in a neutral way according to actual CO2 emissions. The Swedish experience can be summarized by increased tax levels over time and steps taken towards a more uniform national price on fossil CO2. Moreover, the CO2 tax base is only moderately elastic to price changes (particularly in the short run) when it comes to petrol and diesel implying quite stable tax revenues. On the other hand, the CO2 tax seems to have had a major impact on fuels used for heating purposes, where biofuels and other non-fossil energy sources (such as energy from waste and surplus heat from industrial processes) have significantly increased their shares.

2013-01-18

Conspicuous Leisure: Optimal Income Taxation When Both Relative Consumption and Relative Leisure Matter

In previous studies on public policy under relative-consumption concerns, leisure comparisons have been ignored. In this paper, we consider a two-type optimal non-linear income tax model, in which people care about both their relative consumption and their relative leisure. Increased consumption positionality typically implies higher marginal income tax rates for both ability types, whereas leisure positionality has an offsetting role.

2012-09-27

    Regulation of a Spatial Externality: Refuges versus Tax for managing pest Resistance.

    We examine regulations for managing pest resistance to pesticide varieties in a temporally and spatially explicit framework. We compare the performance of the EPA’s mandatory refuges and a tax (or subsidy) on the pesticide variety under several biological assumptions on pest mobility and the heterogeneity of farmers’ pest vulnerability.

    2012-07-09

      Decoupling: is there a separate contribution from environmental taxation?

      The term decoupling refers to breaking the link between ‘environmental bads’ and ‘economic goods.’ Decoupling environmental pressures from economic growth is one of the main objectives of the OECD Environmental Strategy for the First Decade of the 21st Century, adopted by OECD Environment Ministers in 2001.

      2012-02-15

      Distributional effects of taxing transport fuel

      This paper takes as its starting point the observation that fuel prices – and thus taxes – are important for good management of climate change and other environmental problems. To economists this should be no surprise yet it seems that the role of fuel taxation as an instrument of climate policy has not been fully appreciated. It is however one of the few policy instruments that, since several decades, has actually reduced fuel consumption appreciably.

      2012-01-24

      Taxes, permits and costly policy response to technological change

      In this paper, we analyze the effects of the choice of price (taxes) versus quantity (tradable permits) instruments on the policy response to technological change. We show that if policy responses incur transactional and political adjustment costs, environmental targets are less likely to be adjusted under tradable permits than under emission taxes. This implies that the total level of abatement over time might remain unchanged under tradable permits while it will increase under emission taxes.

      2011-12-08

      Fuel Taxes and the Poor

      Fuel Taxes and the Poor,The Distributional Effects of Gasoline Taxation and Their Implications for Climate Policy, challenges the conventional wisdom that gasoline taxation, an important and much-debated instrument of climate policy, has a disproportionately detrimental effect on poor people.

      2011-02-27

      Bioeconomic model of spatial fishery management in developing countries

      Fishers in developing countries do not have the resources to acquire advanced technologies to exploit offshore fish stocks. As a result, the United Nations Convention on the Law of the Sea requires countries to sign partnership agreements with distant water fishing nations (DWFNs) to exploit offshore stocks. However, for migratory stocks, the offshore may serve as a natural marine reserve (i.e., a source) to the inshore (i.e., sink); hence these partnership agreements generate spatial externality.

      2011-01-31

      Decoupling: Is there a Separate Contribution from Environmental Taxation

      Decoupling is a crucial topic in the analysis of sustainable development. Without decoupling, continuing and increasing economic growth in developed and developing countries would come with ever increasing environmental pressures, unavoidably destroying the carrying capacity of ecosystems with corresponding detrimental effects on the environment and societies.

      2010-12-04

      Determinantes de Cumplimiento en el Programa de Tasas Restributivas de Colombia. El Caso de Corpochivor

      We evaluate the factors that influence the reported level of pollution and those referred to the compliance with the payment of discharge fees from sources regulated under the Colombia’s Discharge Fee Program. The analysis uses a data set that contains information at plant level and considers individual sources operating under the jurisdiction of the Regional Autonomous Corporation of the Chivor (Corpochivor), for period 2001-2006.

      2010-11-29

      Attitudes towards CO2 taxation - is there an Al Gore effect?

      Fuel taxes are one of the most powerful climate policies. Yet, these taxes have not been given very much attention in the global debate regarding climate policy, compared with other instruments, such as tradable emission permits. This article shows, however, that the immense media coverage during fall 2006 significantly affected people's attitudes towards the CO2 tax on gasoline.

      2010-10-24

      Fuel tax incidence in developing countries: The case of Costa Rica

      We use household survey data and income-outcome coefficients to analyze fuel tax incidence in Costa Rica. We find that the effect of a 10 percent fuel price hike through direct spending on gasoline would be progressive, its effect through spending on diesel—both directly and via bus transportation—would be regressive (mainly because poorer households rely heavily on buses), and its effect through spending on goods other than fuel and bus transportation would be relatively small, albeit regressive. Finally, we find that although the overall effect of a 10 percent fuel price hike through all types of direct and indirect spending would be slightly regressive, the magnitude of this combined effect would be modest. We conclude that distributional concerns need not rule out using fuel taxes to address pressing public health and safety problems, particularly if gasoline and diesel taxes can be differentiated.

      2009-10-15

      Distributional equity of fuel tax in Costa Rica

      Perhaps current prices of fossil fuels are the reflection of the hurricane's eye passing through the global markets. Before exorbitant oil prices again steal all the attention, it is important to analyze our policies on public and private transport management in general. And in particular fuel tax policies, which is here discussed by Francisco Alpizar, Rebecca Osakwe and Allen Blackman.

      2009-09-01

      A Note on Emissions Taxes and Incomplete Information

      In contrast with what we perceive is the conventional wisdom about setting a second-best emissions tax to control a uniformly mixed pollutant under uncertainty, we demonstrate that setting a uniform tax equal to expected marginal damage is not generally efficient under incomplete information about firms’ abatement costs and damages from pollution.

      2008-10-22

      Taxes, Permits, and the Diffusions of a New Technology

      The author looks at the effects of the choice between taxes and permits on the pattern of adoption of a new emissions abatement technology. The regulator determines the optimal ex-post amount of emissions before firms start to adopt the technology. Each firm decides when to adopt, considering benefits, costs, and advantage gained over their rivals, producing a sequence of adoption that is “diffused” into the industry over time.

      2007-12-15

      Are demand elasticities affected by politically determined tax levels?

      Raising the price of fossil fuels is a key component of any effective policy to deal with climate change. Just how effective such policies are is decided by the price elasticities of demand. Many papers have studied this without recognising that not only is there a demand side response: quantities are decided by the price but also there is a reverse causality: the level of consumtion affects the political acceptability of the taxes which are the main component of the final price. Thus prices affect consumption levels, in turn, have an affect on taxes and thus consumer prices. This paper estimates these functions simultaneously to show that there is indeed an effect on the demand elasticity.

      2007-08-24

        Water tariff design in developing countries: Disadvantages of increasing block tariffs and advantages of uniform price with rebate designs

        Increasing block tariffs (IBTs), widely used in the developing world, are claimed to produce desirable income transfers, discourage wasteful use, promote economic efficiency, and assure access to sufficient water for basic sanitation. In fact, these claims are either excessive or incorrect. In practice, IBTs are likely to promote inefficiency, inequity, unfairness, net revenue instability, and other negative consequences. An alternative tariff design, a uniform price with rebate (UPR), is presented.

        2006-02-01

        Optimal environmental road pricing

        An optimal first-best road charge should not only be differentiated with respect to factors that affect the direct external environmental and time costs from the road-user himself.

        2003-03-01

        Environmental Taxes in Europe

        This paper provides an overview and a discussion of environmental taxes in Europe. On the whole, most European countries have fairly high levels of environmental taxation – at least compared to the US.

        2002-01-01

        Environmental Charges in Airline Markets

        Over the last two decades many airline markets have been deregulated, resulting in increased competition and use of different types of networks. At the same time there has been an intense discussion on environmental taxation of airline traffic. It is likely that an optimal environmental tax and the effects of a tax differ between different types of aviation markets.

        2001-10-01

        Energy use in the Namibian economy from 1995 to 1998

        As part of a natural resource accounting project being undertaken in Namibia, energy accounts have been compiled and are used to analyse energy use by different economic sectors. Households account for most energy use, especially of traditional fuels, and many households continue to rely on Ž rewood even when they have access to electricity.