From Regressive Pollution Taxes to Progressive Environmental Tax Reforms

Mireille Chiroleu-Assouline and Mouez Fodha

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: European countries have increased their use of environmental tax instruments by designing new tax bases. But, many countries have to face the opposition of the public opinion, for fear of the distributive consequences of these environmental tax reforms. This paper sheds light on the distributive consequences of environmental tax policies when households are heterogeneous. The objective is to assess whether an environmental tax reform could be Pareto improving, when the revenue of the pollution tax is recycled by a change in the labor tax properties. We show that, whatever the degree of regressivity of the environmental tax alone, it is possible to design a recycling mechanism that renders the tax reform Pareto improving, by simultaneously decreasing the average rate of the wage tax and increasing its progressivity.

Keywords: heterogeneity; welfare analysis; tax progressivity; Environmental tax reform; Réforme fiscale verte; hétérogénéité; économie du bien-être; progressivité de l'impôt (search for similar items in EconPapers)
Date: 2012-07
New Economics Papers: this item is included in nep-acc, nep-ene, nep-env, nep-pbe and nep-pub
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00719762v1
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Citations: View citations in EconPapers (6)

Published in 2012

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Related works:
Journal Article: From regressive pollution taxes to progressive environmental tax reforms (2014)
Working Paper: From regressive pollution taxes to progressive environmental tax reforms (2014)
Working Paper: From regressive pollution taxes to progressive environmental tax reforms (2014)
Working Paper: From regressive pollution taxes to progressive environmental tax reforms (2014)
Working Paper: From Regressive Pollution Taxes to Progressive Environmental Tax Reforms (2012)
Working Paper: From Regressive Pollution Taxes to Progressive Environmental Tax Reforms (2012)
Working Paper: From Regressive Pollution Taxes to Progressive Environmental Tax Reforms (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00719762

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