Equity impacts of proposals for federal product charges

Pollution taxes have been studied as instruments for promoting environmental objectives in an efficient manner. Their adoption has also been recommended, although less rigorously, on equity grounds. In the case of solid wastes it has been contended that persons whose waste generation occasions local public outlays for refuse service should pay commensurately, but that they often do not under general revenue financing. How proposals for federal product charges might reduce current inequities, so conceived, is the subject of the paper. The behavioral responses of local public officials to federal grants funded by charge revenues and the design of the grant formula are identified as potentially important factors in that regard.