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Bureaucratic Tax-Seeking: The Danish Waste Tax

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  • Henrik Christoffersen
  • Gert Tinggaard Svendsen

Abstract

We suggest that when individual ministries are able to add differentiated green taxation on top of traditional taxation, the result is over-taxation. This is so for two reasons. Firstly, budget maximisation leads to overwhelming fiscal pressure because bureaucracies are competing for resources just like fishermen or hunters (here named ‘bureaucratic tax-seeking’). Secondly, the absence of a strong and fully informed ‘troop leader’, i.e. overall budget co-ordinator, prevents the rational co-ordination of collective action. Taxing citizens or firms may then be likened to harvesting rents from a natural resource and we therefore apply a common-pool resource model. These suggestions are confirmed by a case study of the Danish waste tax with its fixed price approach and perverse incentives compared to that of achieving environmental target levels in a cost-minimising way. Thus, we recommend that bureaucratic institutions should coordinate their tax-seeking efforts to maximise budgets in the long run and that the ministries that collect green tax revenues should not be allowed to control these revenues. Furthermore, our results dictate that the postulated effects arising from green tax intervention need to be demonstrated.

Suggested Citation

  • Henrik Christoffersen & Gert Tinggaard Svendsen, 2002. "Bureaucratic Tax-Seeking: The Danish Waste Tax," Energy & Environment, , vol. 13(3), pages 355-366, July.
    • Handle: RePEc:sae:engenv:v:13:y:2002:i:3:p:355-366
    DOI: 10.1260/095830502320268223
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    1. Boom, J.-T. & Svendsen, G.T., 1999. "International Emission Trading Systems: Trade Level and Political Acceptability," Papers 99-11, Aarhus School of Business - Department of Economics.
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    4. Lene Hjøllund & Gert Tinggaard Svendsen, 2001. "Why Green Taxation?," Energy & Environment, , vol. 12(1), pages 29-38, January.
    5. Carsten Daugbjerg & Gert Tinggaard Svendsen, 2001. "Green Taxation in Question," Palgrave Macmillan Books, Palgrave Macmillan, number 978-0-230-59553-8, March.
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    7. Charles Howe, 1994. "Taxesversus tradable discharge permits: A review in the light of the U.S. and European experience," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(2), pages 151-169, April.
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    Cited by:

    1. Urs Steiner Brandt & Gert Tinggaard Svendsen, 2004. "Rent-Seeking and Grandfathering: The Case of GHG Trade in the Eu," Energy & Environment, , vol. 15(1), pages 69-80, January.
    2. Urs Steiner Brandt & Gert Tinggaard Svendsen, 2003. "Bureaucratic Rent-Seeking in the European Union," Working Papers 46/03, University of Southern Denmark, Department of Sociology, Environmental and Business Economics.

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    More about this item

    Keywords

    bureaucratic tax-seeking; troop leader; common-pool resource model; green taxation; waste tax;
    All these keywords.

    JEL classification:

    • H0 - Public Economics - - General
    • H4 - Public Economics - - Publicly Provided Goods
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General

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