What is a pig's tax?

Pigov's tax, also known as the "Tax of Sins", is the tax collected for the purpose of remedying the negative costs that are directly created by business action, but this is not considered commercial costs or profits. This type of tax is a way of government to maintain stability and capital on the market by looking at a wider picture than the simple purchase and sale of goods and services. Pig's taxes are somewhat controversial in politics, and critics say they are a means of punishing companies for a high level of profit. Proponents argue that measures such as a pig tax help protect the rights of all citizens instead of putting the bonuses on corporation rights.

There are two required results of the Pigovian tax: to correct the external negative costs through income and to provide companies in motivation to breed in a way that does not cause tax. If mining operations substantially damage the nearby river so that it would not be discontinued by the by -products, the government may step in the repair of the damage methodto the rivers. In order to pay for these repairs, a pig's tax can be received to generate the necessary income. In addition, the tax can be sufficiently high enough to be more economically feasible to engage the mining operations in environmentally safe procedures to pay tax.

Although it is simple enough in the concept, Pragovská tax is very difficult through tax policy. First, government officials with voting powers may be motivated to reduce or reject tax on the basis of lobbying of business interests, personal policy or concerns about the impact on the re -election caused by a tax vote. Through changes, exceptions and other supplements to the original proposal, the tax can be reduced to a point where it is no longer effective in fulfilling one of its goals. If it is then approved, the tax can create a double problem: Business may lose profits sufficiently to cause release or injureProduction, but not enough to change its ways, and the government does not have to collect enough income to correct the original problem. Thus, the tax, which was supposed to be a mutually beneficial situation, can therefore turn into a loss of business for all.

Another key problem in the enactment of Pigrov tax is to determine the right levels for taxation to create incentive and sufficient revenue. While negative externalities such as rivers damage can be estimated, it is difficult to proceed to exact numbers. In addition, determining the amount of tax for accounting for the motivation of changes, but not much damage production, is based on a wide range of market and economic variables, which almost impossible accurate tax rates are almost impossible. Although theoretically excellent, Pigovian -style taxes are in fact much more mastering.

In some cases, a pig's tax can be enacted on individual consumers. This type of tax is usually collected for consumer products that are pwrapped for creating an overall social negative effect, such as tobacco. In this case, the aim is to create motivation for consumers to stop purchasing the product due to higher costs, while providing revenue for programs such as lung cancer research, government health care, and costs that can be traced back to the product.