The question of what the optimal tax on pollution should be is a difficult one to answer. There are many factors that come into play, such as: who pays the tax, how much it costs, how harmful it is to the environment and more. In this blog post we will discuss some of these key factors and explore different types of taxes that could have an impact on your business.
Who pays the tax?
If a company has to pay for any pollution that they emit, then it is more likely that their prices will be higher. This could make them less competitive in comparison with companies who do not have to worry about paying these taxes. However, if you put the burden on consumers by taxing what goes into products or forcing people to pay per mile traveled, this would increase utility bills and gas expenses respectively. How much does it cost? – As we know from Economics 101: when there’s an opportunity of making money, many things can happen depending on how high the costs are set. The same holds true for polluting activities like mining coal or drilling for oil.