From Regressive Pollution Taxes to Progressive Environmental Tax Reforms

Mireille Chiroleu-Assouline and Mouez Fodha

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

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 annd increasing its progressivity

Keywords: Environmental tax reform; heterogeneity; welfare analysis; tax progressivity (search for similar items in EconPapers)
JEL-codes: D60 D62 E62 H23 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2012-07
New Economics Papers: this item is included in nep-acc, nep-env and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://mse.univ-paris1.fr/pub/mse/CES2012/12048.pdf (application/pdf)

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:mse:cesdoc:12048

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