As usual, the answer is somewhere in between, depending on price elasticity and availability of substitutes en.wikipedia.org/wiki/Tax_in… nitter.vloup.ch/rlove/status/824…
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As is the case with all taxes. Here, my gut says more of the burden will fall on the Mexican imports due to lots of substitutes.
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taxing negative externalities makes a lot of sense, especially if you're looking to change practices, but they're still paid
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and it's interesting in the case of carbon taxes in particular to see who pays (oil companies, retailers, consumers etc)
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Distributional aspects can be corrected by other policies that change distribution. But don't know what you mean by "still paid".
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using a carbon tax as an example, you could see the same arguments being made "oil companies will pay for their pollution: cont.
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on the flip side if demand were perfectly inelastic and there were no suitable substitutes, consumers would bear the entire cost
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Distribution needs to be considered globally, not one policy at a time.
Jan 26, 2017 · 11:00 PM UTC
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