Of course - _if_ you've already taxed away every negative externality ;) Also, this is much more easily said than done. What, exactly, is the price of a drown

Of course - _if_ you've already taxed away every negative externality ;) Also, this is much more easily said than done. What, exactly, is the price of a drowning polar bear, and how much of it is subsumed into the present discounted value of a flooded coastal city? The reason I singled out capital gains is that it can often lead to a genuine positive externality: capital accumulated in the hands of those best able to discriminatively lend it out (i.e. not bankers). I liked Rodgers' suggestion of taxing short-term capital gains (taxing negative effects of short-term speculation) but not long-term ones. There are probably even more finely-grained policies that can work here.