Download or read book Pigouvian Taxation with Administrative Costs written by A. Mitchell Polinsky and published by . This book was released on 1981 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines how the optimal Pigouvian tax should be adjusted to reflect administrative costs. Several cases are examined, depending on whether the administrative costs are fixed per firm taxed or are a function of the amount of tax collected, and on whether such costs are borne by the government or by the taxed firm. In some cases, the presence of administrative costs increases the optimal tax above the external cost, while in other cases it leads to a decrease in the tax.