Environmental Tax Competition Among Jurisdictions
Research Memorandum Department of Economics Leiden University, No. 14, 1992
35 Pages Posted: 22 Jul 2009
Date Written: 1992
The use of environmental taxes for pollution problems without spillovers is studied in a multi-jurisdictional setting. The problem is studied using the standard Mintz & Tulkens (1986) model for interjurisdictional tax competition. This is a model with 2 regions, two tradeable private goods: labour and a private consumption good which can be taxed at the production level and one non tradeable local public good. It is demonstrated that the tax competition literature results can not be translated to the environmental tax competition problem for externalities linked to production.
Keywords: optimal taxation, tax competition, environmental levies
JEL Classification: H21, H23, H73, H87
Suggested Citation: Suggested Citation