Taxis in Palma are metered, if you are traveling outside the the city then it is advisable to make sure you agree a fixed price before hand.
A green light on a taxi means that it is avaliable for hire on the street or you can hire one at one of the main taxi ranks in the city.
You pay an initial fee when you board the taxi and then a charge per kilomoter traveled.
Other charges can be applied for additional luggage, and generally there is an additional charge for the airport and ferry port.
Useful links
The only british taxi driver in Palma de Majorca. http://majorcabdriver.com/
