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Glad to see someone with economics knowledge! The best taxes are Pigouvian taxes on externalities. They not only raise revenue but distort the market in the rig
by croemer 1y ago
Glad to see someone with economics knowledge! The best taxes are Pigouvian taxes on externalities. They not only raise revenue but distort the market in the right direction. Carbon tax comes to mind (though that's a tricky case as there is no world government, tax works best for local externalities like air pollution).
- eru 1y agoWell, for Pigouvian taxes to make sense, you first have to argue why in your specific situation Coasion bargaining breaks down. Similar to how, if you want to use 'market failure' to justify your favourite government intervention, it actually comes with lots and lots of restrictions and only justifies a very narrow slice of possible interventions.
- croemer 1y agoThanks for reminding me of that, it's been a while since I read Varian's Micro textbook. There are lots of ways for Coase to break down. Lack of clear property rights, transaction costs etc