Inequality and regressivity in Italian waste taxation. Is there an alternative route?

Abstract

The Italian financing system for waste collection and disposal services, still far from a price-based system at the national level, is similar to a real property tax system. Among other concerns, this raises equity issues. The aim of this paper is threefold. First, the structure of the waste tax in its components (i.e., fixed and variable) is analysed at the provincial level. This allows to investigate the magnitude of the two tax components in Italian provinces, while showing the differences among macro-areas in the financing system for waste collection and disposal services. Second, the regressivity (progressivity) of the tax system adopted is investigated, so as to highlight the differences among geographical areas. Third, an alternative base for the waste tax is proposed, in order to avoid regressivity and achieve higher equality. For these purposes, official data referring to 2017 are used and a Geographically Weighted Regression is implemented. The results highlight the importance of an alternative base of the waste tax to design an equal and non-regressive tax, more similar to a Pay-As-You-Throw scheme.

Keywords: Equity; Geographically Weighted Regression; Italy; Waste management; Waste tax.