Pigouvian tax

/ pɪˈɡuːvɪən /

noun

1. a tax levied to counter an economic negative externality, for example taxing producers of industrial pollution in order to encourage pollution control

Word History and Origins

Origin of Pigouvian tax¹

C20: named after Arthur Pigou (1877-1959), English economist

Example Sentences

Beyond Meat boss Ethan Brown told the BBC he is in favour of a "pigouvian tax" on activities that create adverse side effects for society.

From BBC

One great thing about the gas tax is that it’s what economists call a Pigouvian tax: a levy on an activity with significant negative externalities.

From Slate

Washington state’s proposed levy is a textbook “Pigouvian tax” which should come as no surprise since it’s the brainchild of an economist: Yoram Bauman, who previously taught economics at the University of Washington.

From Wall Street Journal

It's called a Pigouvian tax after the British economist Arthur Pigou who set out the case in a 1920 book.

From BBC

In that regard, the FTT is a Pigouvian tax: a tax that offsets the significant, external costs imposed on the larger society by activities like smoking or polluting.

From Forbes