Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211805 
Year of Publication: 
1998
Series/Report no.: 
Bank of Finland Discussion Papers No. 4/1998
Publisher: 
Bank of Finland, Helsinki
Abstract: 
The paper analyses the benefits of earmarking the environmental tax revenues in a second-best world with asymmetry of information between government and taxpayers.Taxpayers are assumed to have taste differences over consumption of an environmentally harmful activity.The government, which cannot observe these preferences, pursues Pareto-efficient taxation involving compensation to the potential losers of tax policy.Within this framework, it is shown that earmarking environmental tax revenues on projects that are beneficial to the losers of the environmental policy may alleviate problems concerning asymmetric information and facilitate more efficient environmental policy.
Subjects: 
Environmental taxation
earmarked taxes
Pareto-efficient taxation
second-best analysis
Persistent Identifier of the first edition: 
ISBN: 
951-686-569-0
Document Type: 
Working Paper

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