Health effects and optimal environmental taxes in welfare state countries

Jean-Christophe Caffet ()
Additional contact information
Jean-Christophe Caffet: EUREQUA - Equipe Universitaire de Recherche en Economie Quantitative - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: Most studies on the green tax reform issue point out that environmental taxes exacerbate pre-existing tax distortions, thereby increasing the welfare costs associated with the overall tax code. As a result, the optimal environmental tax should lie below the Pigovian level (or marginal social damages). This article challenges this finding by arguing that health benefits from reduced pollution may sufficiently affect labor supply to create benefit-side tax interactions which, in turn, may be of the same magnitude as cost-side ones. Using a simple general equilibrium model that assumes the existence of a social security system, this paper shows that the optimal environmental tax rate could be greater than traditionally thought.

Keywords: social security; health; employment; double dividend; environmental tax; taxe environnementale; sécurité sociale; santé; emploi; double dividende (search for similar items in EconPapers)
Date: 2005-07
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00194917
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in 2005

Downloads: (external link)
https://shs.hal.science/halshs-00194917/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00194917

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().