How do corrective taxes help address negative externalities in a market economy according to economic theory?

Corrective taxes are used to address negative externalities, which are harmful effects that a business or individual imposes on others but does not pay for. In a market economy, when a company pollutes the air, for example, it might not consider the health problems this causes for nearby residents. By imposing a corrective tax on pollution, the government encourages the company to reduce its emissions because it now has to pay for the damage it causes. This not only helps the environment but also leads to a more efficient market where costs reflect the true impact of production. For instance, if a factory is taxed for every ton of pollution it emits, it might invest in cleaner technologies to avoid paying high taxes, benefiting the community and improving overall health.