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Problems With Pigouvian Taxes

Posted by on | March 19, 2018 | Comments Off

Pigouvian taxes are taxes meant to help markets and prices better account for certain externalities that wouldn’t otherwise be priced in.  A good example is that to the extent one thinks that CO2 is having a deleterious effect on the environment, a carbon tax would be a pigouvian tax.  This brief note at Cato discusses some problems with Pigouvian taxes.  This note reminded me of another issue:  in real life, Pigouvian taxes are more likely to reflect biases and faulty assumptions and virtue signalling of politicians rather than real science and economics.  Here are two situations that come to mind, presented without comment:

pig2 650x488 Problems With Pigouvian Taxes

pig1 650x488 Problems With Pigouvian Taxes

 Problems With Pigouvian Taxes  Problems With Pigouvian Taxes  Problems With Pigouvian Taxes

 Problems With Pigouvian Taxes

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