PT  - JOURNAL ARTICLE
AU  - Chan, Nathan W.
AU  - Kotchen, Matthew J.
TI  - Funding Public Goods through Dedicated Taxes on Private Goods
AID  - 10.3368/le.98.3.082721-0101
DP  - 2022 Aug 01
TA  - Land Economics
PG  - 428--439
VI  - 98
IP  - 3
4099  - http://le.uwpress.org/content/98/3/428.short
4100  - http://le.uwpress.org/content/98/3/428.full
SO  - Land Econ2022 Aug 01; 98
AB  - We examine dedicated taxes (i.e., taxes on private goods used to finance public good provision) in a game-theoretic model of impure public goods. We show that a dedicated tax can increase or decrease demand for the taxed good. The optimal dedicated tax generally cannot achieve the Pareto-optimal allocation, but it can generate a conditionally efficient equilibrium with comparatively more or less public good provision, depending in part on complementarity or substitutability between the private and public good. We also demonstrate a neutrality result: when individuals can make direct donations, sufficiently low dedicated taxes will not impact equilibrium allocation.