Optimal Environmental Taxes Due to Health Effect


  • Haradhan Kumar Mohajan


Environmental Pollution, Optimal Environmental Taxes, Public Good, Budget Constraints


This paper shows that the optimal environmental tax should be less than the marginal environmental damages; since the presence of pre-existing distortionary taxes, increasing the welfare costs is associated with the overall tax code. The reduction of pollution causes the benefits of health by supplying maximum labors to create benefit-side tax interactions, which will tend to reduce the optimal environmental taxes. The paper also shows that the existence of social security system preserves the gross wage of labors during sick days and grants subsidies to medical treatments. An attempt is made to confirm that health effects labor supply, which results in an additional impact, the benefit-side tax-interaction effect.




How to Cite

Mohajan, H. K. . (2021). Optimal Environmental Taxes Due to Health Effect. KASBIT Business Journal, 4(1), 1–19. Retrieved from https://www.kasbitoric.com/index.php/kbj/article/view/40

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