Which of the following may be classified as a 39 Pigouvian tax 39 ........

General Studies (CPO) Indian Economy

Which of the following may be classified as a 'Pigouvian tax'?

This questions was previously asked in

SSC CPO 12th Dec 2019 Shift-2

Long term capital gain tax

Corporate tax

Carbon tax

Income tax

- Option 1: Long term capital gain tax

- This tax is levied on earnings from investments held over a long period.

- It's not designed for correcting externalities, but rather for raising revenue.

- Option 2: Corporate tax

- This tax is on the profits of corporations.

- Like the capital gains tax, it's primarily a revenue-raising tool, not for rectifying externalities.

- Option 3: Carbon tax

- This tax targets the negative externalities of carbon emissions.

- Its purpose is to discourage pollution, aligning market outcomes with social welfare: 'Pigouvian tax'.

- Option 4: Income tax

- Income tax is taken directly from individual earnings.

- This tax is used for revenue purposes, not to address externalities.

Submit Error