Economic theory

This argument is used in the debate : Are Air Quotas a good way to reduce air traffic?.

This argument is a justification of : Air Quotas are more effective than the alternative solution ‘Control through prices’ (taxes).

Keywords: Economy

Summary

The economic theory of the tax is based on the price signal, which is supposed to reduce purchases when the price rises. In fact, it is only effective for individuals with a constrained budget. Most carbon emissions and flight abuse are caused by the ultrarich people with unconstrained budgets: taxes have no reductive effect.

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