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Tax system it is impossible to assign a problem of optimum placing of resources,
Even if it is wanted by the power. However my arguments were obviously badly
Are formulated, time even such critic executed sympathy, as Baumol, not
Has understood them. Critic Baumola I have been directed on positions, which not
Adhered and do not adhere. Therefore I intend to state my arguments more
Clearly, having expanded those sections of the argument, where the compressed or inexact statement
Could mislead my critics. Many of those who wrote about
Use of taxes for the decision of a problem of harmful influences, have accepted
The interpretation of my position put forward by Baumolom, but I will limit the comments
Only that I will try to clear it Baumol William J., p.
307 - 322, On Taxation, 62, it 3, June 1972 and the
Control of Externalities//American Economic Review.
I began with the assumption that the tax will be equal to value of the caused damage.
As an example I took the factory which smoke caused a damage in 100 dollars a year
Smoke attract on the owner of factory taxes in 100 dollars, it will put
Can not be optimum. We will assume that those to whom cause a damage, can
To avoid it at the expense of the measures attracting costs at a rate of 40 dollars year. In it
Case, in the presence of a smoke and absence of taxes, value of manufacture has appeared
- on 50 dollars a year (90 dollars a minus 40 dollars). Then I have noticed that
Growth of number of people or the enterprises located in the neighbourhood with factory,
Will increase the size of the damage caused by the same emissions of a smoke. It will lead
To payment more heavy taxes if smoke emissions proceed, so,
The factory will be ready to incur the big costs for smoke prevention in
Avoidance more heavy taxes, than before. Those who decides to settle down
Near to factory, will not consider these additional costs. It is easy
To illustrate with the same numbers. We will assume at first that near to factory
There is nobody. There will be a smoke, but there will be no damage so, there will be no also taxes.
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