We examine the Dutch national groundwater tax (GWT) – a ‘win–win, green’ tax that promised to reduce distortions by simultaneously reducing the income tax burden and improving environmental outcomes. We find no evidence of these impacts. Instead, we see that the GWT increased distortions by taxing a narrow base (a few drinking-water companies reliant on raw groundwater) and interfering with groundwater management programmes funded by an existing provincial groundwater fee. The Dutch government revoked the GWT for being fiscally inefficient and environmentally unhelpful on 31 December 2011, but this story provides some useful lessons.
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Research Article| August 01 2013
The life and death of Dutch groundwater tax
Marianne Schuerhoff, Hans-Peter Weikard, David Zetland; The life and death of Dutch groundwater tax. Water Policy 1 December 2013; 15 (6): 1064–1077. doi: https://doi.org/10.2166/wp.2013.112
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