
Showing posts with label Carbon Taxes. Show all posts
Showing posts with label Carbon Taxes. Show all posts
Thursday, October 17, 2019
IMF suggests a $75 per ton carbon tax. What would it mean?

Monday, August 21, 2017
Upon whom does an energy tax fall? Who bears the burden?
Who Bears the Economic Costs of Environmental Regulations? by Don Fullerton, Erich MuehleggerAbstract: Public economics has a well-developed literature on tax incidence - the ultimate burdens from tax policy. This literature is used here to describe not only the distributional effects of environmental taxes or subsidies but also the likely incidence of non-tax regulations, energy efficiency standards, or other environmental mandates. Recent papers find that mandates can be more regressive than carbon taxes. We also describe how the distributional effects of such policies can be altered by various market conditions such as limited factor mobility, trade exposure, evasion, corruption, or imperfect competition. Finally, we review data on carbon-intensity of production and exports around the world in order to describe implications for effects of possible carbon taxation on countries with different levels of income per capita.Complete working paper from the National Bureau of Economic Research.
Friday, April 7, 2017
Can a carbon tax be progressive?
From Vertical and Horizontal Redistributions from a Carbon Tax and Rebate
by Julie Anne Cronin, Don Fullerton, Steven E. Sexton
Abstract: Because electricity is a higher fraction of spending for those with low income, carbon taxes are believed to be regressive. Many argue, however, that their revenues can be used to offset the regressivity. We assess these claims by employing data on 322,000 families in the U.S. Treasury's Distribution Model to study vertical redistributions between rich and poor, as well as horizontal redistributions among families with common incomes but heterogeneous energy intensity of consumption (different home heating and cooling demands). Accounting for the statutory indexing of transfers, and measuring impacts on annual consumption as a proxy for permanent income, we find that the carbon tax burden is progressive, rising across deciles as a fraction of consumption. The rebate of revenue via transfers makes it even more progressive. In every decile, the standard deviation of the change in consumption as a fraction of consumption varies around 1% or 2% and is larger than the average burden (about 0.7%). When existing transfer programs are used to rebate revenue, the tax and rebate together increase that variation to more than 3% within each decile. The average family in the poorest decile gets a net tax cut of about 1% of consumption, but 44% of them get a net tax increase. Relative to no rebate, every type of rebate we consider increases this variation within most deciles.
Link: NBER #23250
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