Taxes on polluting firms for pollution are intended to
A)raise enough revenue to cut the deficit in half.
B)encourage firms to reduce charges by polluting less.
C)be efficient, i.e., result in no excess burden.
D)raise revenue for general spending needs.

Question

Quizplus · Accepted Answer

Taxes on polluting firms are intended to discourage firms from polluting excessively and encourage firms to shift towards cleaner technologies and reduce their pollution levels. The primary objective is to create an economic incentive for firms to internalize the costs of their pollution and reduce it, rather than imposing a burden on taxpayers to clean up after them. While revenue generation may be a secondary objective, the primary goal is to reduce pollution.

Taxes on Polluting Firms for Pollution Are Intended to