【Special Issues: Industrial waste taxes】
Environmental Management through Industrial Waste Taxes: Theoretical Foundations and Policy Designs
Toru Morotomi
Associate Professor, Graduate School of Economics, University of Kyoto
（Yoshida-Honmachi, Sakyo-ku, Kyoto, 606-8501 Japan）


Abstract
Environmental taxes can be introduced not only at the national level, but also at the local level. Environmental problems which bear local characteristics, such as waste or water management, can actually be managed by the local government. According to the new legislation of April 1, 2000, local governments are allowed to introduce their own taxes within a certain limit, and interest in the Local Environmental Tax（LET）has been growing rapidly. One typical example is Mie Prefecture which implemented this industrial waste tax on April 1, 2002, with nine more prefectures following the prefecture's precedent. The purpose of this paper is to investigate the theoretical foundations and policy designs for Industrial Waste Tax possibilities based on both Japanese experiences and ongoing discussions. From the viewpoint of public finances, we then analyze the appropriate revenue sharing of LET between local and central governments. The criteria for judgments would be “mobility of the tax base” and “uneven distribution of the tax bases among jurisdictions”. Finally, we explore possibilities for solving the problem of double taxation by multiple jurisdictions.


Key words: industrial waste tax, destination principle, double taxation by multiple jurisdictions, taxation at source, taxation at final disposal