The Role of Environmental Taxes into Alter Negative Motivations of Taxpayers under Pigouvian Theory

Abstract

The literature showed that individuals may do not take into their account the full social cost of their actions towards the environment. Therefore, the environmental tax is usually justified by externalities argument. The study used the empirical literature published to prove that the high tax rates alter the motivation of taxpayers to discourage environmental damage. This paper highlighted also the environmental knowledge and other policies such as command-and-control, and tax incentives. Understanding each of these three forms is useful in order to understand the importance of the role of environmental taxes. The research finding indicated that the high tax rates will motivate taxpayers to use environmentally friendly resources, and the three forms (environmental knowledge, command-andcontrol, and tax incentives) are not effective for altering motivations towards environment unless it's implemented alongside taxation. Therefore, this study will add to the current literature the importance of environmental tax role to motivate taxpayers to discourage environmental harms