Title: Optimal Redistributive Taxation in a Multiexternality Model
Abstract:This paper extends the previous literature on optimal redistributive taxation in the presence of externalities to a multi-externality setting.While taxes on income and on 'clean' commodities are still...This paper extends the previous literature on optimal redistributive taxation in the presence of externalities to a multi-externality setting.While taxes on income and on 'clean' commodities are still unaected by the externalities, which conrms previous results, I nd that the existence of more than one externality-generating commodity has important implications for the optimal Pigouvian tax rates.In general the Pigouvian parts of taxation depend also on the externalities induced by the consumption of the other commodities, implying that the interdependence of the externality-generating commodities is relevant for tax policy.Read More