Using the Tax System to Address Competition Issues with a Carbon Tax

Gilbert Metcalf

No 789, Discussion Papers Series, Department of Economics, Tufts University from Department of Economics, Tufts University

Abstract: This paper considers how tax reductions financed by a carbon tax could be designed to mitigate the need for specific relief for firms in select energy- intensive, trade-exposed (EITE) sectors at the six-digit North American Industry Classification System level. Providing an output-based tax credit to EITE sectors or a broad based reduction in corporate income tax rates disproportionately benefits EITE sectors thereby potentially reducing pressure for other transitional relief. Payroll tax reductions, on the other hand, do not disproportionately benefit EITE sectors given their higher than average capital intensity.

Keywords: climate change; carbon tax; green tax reforms; trade competitiveness (search for similar items in EconPapers)
JEL-codes: F64 H25 Q54 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Using the Tax System to Address Competition Issues With a Carbon Tax (2014)
Working Paper: Using the Tax System To Address Competition Issues with a Carbon Tax (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:tuf:tuftec:0789

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