What are the benefits of using corrective taxes
A)They encourage consumers to avoid sales taxes by shopping online.
B)They are frequently used to discourage imports.
C)They protect property rights.
D)They give factory owners an economic incentive to reduce pollution.

Question

Quizplus · Accepted Answer

Corrective taxes are a form of Pigouvian tax imposed on goods and services with negative externalities. By raising the cost of production, it incentivizes factory owners to reduce pollution levels, leading to reduced negative externalities. This results in a more efficient allocation of resources and a reduction in market failure.

What Are the Benefits of Using Corrective Taxes