-budget tax reform for an externality-generating intermediate input in a second-best economic environment. For purposes of … concreteness, the focus is on tax reform for freight road transport to cope with congestion externalities; results for other types … of externalities can be derived as special cases. The model takes into account that passenger and freight flows jointly …

taxation, commodity taxation, tax expenditures, externalities, public goods, capital income and wealth taxation, social …

engaged in trade. In our model, the motivation for an incumbent government to use environmental policy arises from its selfish …