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Home
> Pigovian tax
A
Pigovian tax
is a
tax
enacted to correct the effects of negative
externalities
; they are named after
economist
Arthur Pigou
. Unlike most taxes, which are inefficient because they result in a
deadweight loss
, Pigovian taxes improve overall
economic efficiency
. Examples of Pigovian taxes include taxes on
alcohol
,
cigarette
s, and
gasoline
.
See
Social cost#Pigovian taxes
for more details.
Tax
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