taxesWhat is some good research done about this? Different economists make wildly diverging claims, but surely there must be some empirical basis to this discussion.
Any tax that corrects a market inefficiency will have no deadweight loss; it will have quite the reverse effect.
As such, any Pigouvian tax that in part or in whole adds a price onto what otherwise would be an unpriced negative externality, and for which the revenue is greater than the direct cost of collection, has a negative deadweight loss.
Some examples are: UK fuel duty; carbon taxes; landfill tax; taxes on cigarette and alcohol.
It is important to bear in mind that any intention behind the tax, and its effect, are separate things: a tax may or may not be devised to correct a market inefficiency; it may have been introduced as a “sin” tax, or as a tax on something just because it was easy to collect revenue, hard to evade, and the target product or service was price-inelastic: all these are by-the-by; what’s important is not the intention, but whether or not they do price negative externalities, and thus have negative deadweight losses.
A lot of work has been done on the externalities of each of the things I mentioned: see for example the work of Nicholas Stern and Chris Hope on carbon taxes; David Pearce on environmental taxes such as the landfill tax; others on the health and crime costs of alcohol; the environmental, social, climate, noise and health costs of petrol, and so on.
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