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Please explain the main differences between a Pigouvian tax and a fiscal tax.

Please explain the main differences between a Pigouvian tax and a fiscal tax.

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Pigouvian taxes is a demotivation tool for the negative externality whereas fiscal tax is collection of government revenue. The main aim of pigouvian tax is not to generate revenue but to reduce the extent of externality and promote social welfare whereas the main aim of fiscal tax is to generate revenue for government expenditure. Example of fiscal tax is income tax and sales tax whereas example of pigouvian tax is tax on pollution.

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