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New forms of taxation

Taxation is often experienced as a forced levy in contrast to market exchange, but there has been a growth of experiments in the financing of collective goods, and the legitimation of tax, which encourage the kind of innovations that command public support. This is particularly the case in the environmental field, where charges on the basis of the ‘polluter pays’ encourage innovation in pollution or materials reduction (as with producer responsibility schemes), with a transfer of funds to those who have innovated (as in the UK Landfill Allowance Trading Scheme).