Optimal Environmental Taxes Could Boost Welfare and Reduce Pollution
This paper looks at how to figure out the best environmental taxes in a general social welfare model. The study doesn't give exact tax rates, but it does show the way for environmental tax policies. The tax rates depend on how people value work and free time, how society values things, and how much people are taxed. The research found that when people can easily switch between work and free time, and when society really cares about everyone's well-being, the optimal tax rates and government help go up. Also, if people care more about the environment in their daily lives, the optimal tax rates go up too. In the future, the model will also look at how income and capital taxes, and wages from international trade, affect things.