Tax Policy in Ireland to Tackle Pollution

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Taxation can be defined as a form of government Levy placed on goods on services that contributes to the state revenue. There are 2 main forms of taxation, direct tax [income tax, CGT tax] and indirect tax [VAT and taxes placed on cigarettes and alcohol].
One of the most common policies that are used to tackle pollution is the green/environmental tax.
This is basically when a form of tax is placed upon a good that damages the environment in an attempt to reduce the level of production or consumption. One example that we can use to evaluate the use of taxes to solve pollution is the recent tax on plastic bags placed by the Irish government.

From this diagram we can see the negative externalities that arise from the use of plastic bags. The MPC curve highlights the private cost of the use of chopping bags and the MSC highlights the cost to society of the use of shopping bags

If there was a form of tax implemented on the production of shopping bags then this would in principle reduce the output of it. The reason for this is that the tax placed on the good would mean that the cost of production would increase. This would then lead to a parallel shift of supply therefore increasing the price of the good and decreasing the supply of shopping bags.
Linking this to the extract it is possible that a form of tax could be placed to reduce the level of spam mail. Spam mail can be seen as a negative externality from these diagrams below.

As the article highlights, the

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