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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/18847
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| Title: | | Pollution and capital tax competition within a regional block  |
| Authors: | | Hadjiyiannis, Costas Hatzipanayotou, Panos Michael, Michael S. |
| Issue Date: | | 2004 |
| Series/Report no.: | | CESifo working papers 1208 |
| Abstract: | | The paper examines the interaction among taxes on factors income, environmental quality and welfare. We construct a two-country regional block model with capital mobility and crossborder pollution. Pollution in the two countries is simultaneously abated by the private sector, in response to a pollution tax and by the public sector utilizing income and pollution tax revenue. We demonstrate, among other things, that due to the existence of cross-border pollution in many cases the Nash optimal policy on capital income is a positive tax, even if taxes on the income of immobile factors are chosen optimally. This tax rate increases with the degree of cross-border pollution. |
| Subjects: | | optimal income taxes public pollution abatement cross-border pollution capital mobility |
| JEL: | | F18 F15 F22 H21 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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