Taxation is crucial to the functioning of the modern state. Tax revenues pay for public services — roads, the courts, defence, welfare assistance to the poor and elderly, and in many countries much of health care and education too. More than one third of national income in the industrialized (OECD) countries is on average taken in taxation. Taxes affect individuals in many ways. Taxes paid on income and spending directly reduce taxpayer disposable income, taxpayers face the hassle of tax returns and making payments, and they may be anxious about the possibility of investigation and enforcement action. People also adapt their activities in various ways to reduce the impact of taxation — putting money into tax-free savings accounts, or making shopping trips to other countries where taxes are lower. Taxation is therefore central to politics and public debate. Politicians that make reckless campaign promises about taxation then have to live with the uncomfortable consequences if elected. Businesses lobby for tax breaks that they claim will create jobs and prosperity. In this Very Short Introduction Stephen Smith shows how taxes have real effects on citizens and the economy that tax policy-makers have to balance. Although tax policy will always be a highly political issue, he argues that public decisions about taxation would be improved by a better understanding of the role of taxation, and of the nature and effects of different taxes. ABOUT THE SERIES: The Very Short Introductions series from Oxford University Press contains hundreds of titles in almost every subject area. These pocket-sized books are the perfect way to get ahead in a new subject quickly. Our expert authors combine facts, analysis, perspective, new ideas, and enthusiasm to make interesting and challenging topics highly readable.

If environmental protection is costly, how much should we spend on pollution control? Is it worth reducing pollution to zero, or should we accept some level of pollution because of the economic benefits associated with it? How can we assess the benefits that people get from a less-polluted atmosphere? In broad terms, environmental economics looks at how economic activity and policy affect the environment in which we live. Some production generates pollution, such as power station emissions causing acid rain and contributing to global warming, but household consumption decisions also affect the environment, where more consumption can mean more waste sent to polluting incinerators. However, pollution is not an inevitable consequence of economic activity — environmental policies can require polluting firms to clean up their emissions, and can encourage people to change their behaviour, through environmental taxes on polluting goods, for example. Generally, though, these measures will involve some costs, such as installing pollution control equipment. So there's a trade-off: a cleaner environment, but economic costs. In recent years, many economists have argued for greater use of incentive in the form of pollution charges and emissions trading rather than more traditional direct regulation of polluters. In this Very Short Introduction, Stephen Smith discusses environmental issues including pollution control, reducing environmental damage, and global climate change policies, answering questions about how we should balance environmental and economic considerations, and what form government policies should take. Including many illustrative case studies and examples he shows that this is an exciting field of economics, and one that is at the heart of many public debates and controversies.