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Public acceptance for environmental taxes: Self interest, environmental and distributional concerns

September 2011

Steffen Kalbekken, Håkon Sælen


The authors’ attempts to fully understand why Pigouvian (i.e. a tax that is meant to correct poor market practices that lead to negative social costs (i.e. pollution from coal plants) ) taxes tend to be less popular with the public. In order to for a tax to get through a legislative body, it must be politically feasible, and so interest groups are some of the most powerful forces behind getting said tax passed. However, it is also important to realize the electoral power of voters in determining politically feasible policy, as they vote. Many studies have found that voters do not fully support and/or understand the purpose of Pigouvian taxes (that is, to correct harmful behavior). Voters care about how the revenues are used, as well as their role to play in it; if they find them to be coercive, then they will not be willing to participate. Places that are centered on car-based transportation are less likely to support the tax, due of lack of equitable transportation options.

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Policy Implications

It may be harder to encourage people to adopt gas taxes because of how much Michiganders rely cars to get around. As such, tying the environmental and personal benefits to voters may be the best method of encouraging the gas tax to be passed.

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