Progressing to a fair carbon tax: policy design options and impacts to households
Progressing to a fair carbon tax: policy design options and impacts to households / Daniel F. Morris & Clayton Munnings. Resources for the Future, April 2013, 18 p. (Issue brief)
http://www.rff.org/RFF/Documents/RFF-IB-13-03.pdf
Key Points (© RFF) :
- Carbon taxes are likely not as regressive as they are often thought to be.
- Poor households can be compensated for increased prices through effective use of tax revenue.
- Incidence measures based on annual income or only use side effects may overstate tax regressivity.
- Government programs that index to inflation may contribute to a more progressive tax.
- Tax effects in different parts of the country will be muted.
- Recycling revenue to consumers through direct rebates will be progressive and reach more households, though targeted tax swaps could have similar effects.