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Now we will assume that someone has decided to construct a new building near to factory andThat as a result value of damage annually caused by a smoke reaches 100 Dollars the Builder can count on that the owner of factory will establish
Can avoid the tax in 100 Those dollars who will be under construction near to factory
After that, will not suffer from any damage as it is more a than smoke
No. But the situation can and not to be optimum. The builder could choose another
Place, so satisfactory and without any smoke, all for Additional 40 dollars a year. Besides value of manufacture would be more
On 50 dollars a year if there were no taxes and the factory continued to smoke.
I also have declared that if "it is necessary to force the owner of factory to payment
The tax at a rate of the caused damage followed found the double Tax system and to force inhabitants of area to payment of the tax equal To additional costs of the owner of factory... To avoid causing Damage "p. 151 - 151, The Problem of Social Cost. It is easy to show it.
Additional costs of the owner of factory are equal in our example 90 dollars in
Year. We will assume that on inhabitants it the tax in 90 dollars In this case is imposed
The builder will prefer to build in other place, to incur because of it Additional costs in 40 dollars but to avoid the tax in 90 dollars, and in Result the factory will let out still a smoke and value of manufacture Will be maximum.
The conclusion would be erroneous that I supported double system of taxes or in general
For use of tax system for this purpose. I have simply noticed that if
To impose the tax based at size of a damage it is desirable to impose with it
The tax and what presence attracts costs on the firm generating
Harmful influences. But, as I already spoke in article "the Problem of the social
Costs ", any tax system abounds with difficulties, and desirable can To appear unattainable. - which in detail assorted my sights in the article, asserted that Its main objective - "to show that if to start with own preconditions
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