Pollution Tax Encourages Pollution: The Absurdity of Tax Swap

6 Pages Posted: 14 Feb 2016

See all articles by Hak Choi

Hak Choi

Chienkuo Technology University - Department of International Business; Chung-Hua Institution for Economic Research

Date Written: February 13, 2016

Abstract

This paper proves that when a firm has paid pollution tax, it will not clean its pollution any more. Conversely, it proves that when a firm has cleaned up its pollution, it should be exempted from pollution and profit tax. This paper also proves that for pollution tax to be effective, it has to be capital, i.e., the pollution firm has to be shut down. Finally, this paper also disproves the tax swap theory.

Keywords: Pollution, Pigou Tax, Tax Swap

JEL Classification: D62, Q53

Suggested Citation

Choi, Hak, Pollution Tax Encourages Pollution: The Absurdity of Tax Swap (February 13, 2016). Available at SSRN: https://ssrn.com/abstract=2732209 or http://dx.doi.org/10.2139/ssrn.2732209

Hak Choi (Contact Author)

Chienkuo Technology University - Department of International Business ( email )

No.1, Chiehsou N. Road
Changhua City, 500
Taiwan
+886 91 901-4618 (Phone)

HOME PAGE: http://euntold.wordpress.com

Chung-Hua Institution for Economic Research ( email )

75, Changhsin St.
Taipei
Taiwan

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
43
Abstract Views
416
PlumX Metrics