Institutions | About Us | Help | Gaeilge
rian logo


Mark
Go Back
Tax uniformity: A commitment device for restraining opportunistic behaviour
Dewit, Gerda; Leahy, Dermot
We investigate whether and to what extent uniform and differentiated tax systems diverge in their propensity to create distortionary opportunistic behaviour. The set-up in which we carry out our analysis features polluting firms that are confronted with a Pigovian emission tax. Firms can invest in pollution abatement. We first show that the existence of emission taxes, although optimally chosen, create strategic incentives for firms to distort their abatement investment. Second, we find that a system of differentiated emission taxes has a greater propensity to foster strategic distortions in abatement investment than a uniform emission tax regime.
Keyword(s): Economics, Finance & Accounting; Uniform tax; Differentiated taxes; Emission tax; Short-run policy commitment; Pollution-abating investment; Strategic investment.
Publication Date:
2008
Type: Report
Peer-Reviewed: No
Institution: Maynooth University
Citation(s): Dewit, Gerda and Leahy, Dermot (2008) Tax uniformity: A commitment device for restraining opportunistic behaviour. UNSPECIFIED. Department of Economics Finance & Accounting NUI Maynooth. (Unpublished)
Publisher(s): Department of Economics Finance & Accounting NUI Maynooth
File Format(s): application/pdf
Related Link(s): http://eprints.maynoothuniversity.ie/1095/1/N1971108.pdf
First Indexed: 2014-09-20 05:08:38 Last Updated: 2015-03-23 05:02:34