Department of Management Science
Stanford, CA 94305
Institutional Affiliation: Stanford University
NBER Working Papers and Publications
|October 2018||Impacts of a Carbon Tax across US Household Income Groups: What Are the Equity-Efficiency Trade-Offs?|
with Lawrence H. Goulder, Marc A. C. Hafstead, GyuRim Kim: w25181
This paper assesses the impacts across US household income groups of carbon taxes of various designs. We consider both the source-side impacts (reflecting how policies affect nominal wage, capital, and transfer incomes) and the use-side impacts (reflecting how policies alter prices of goods and services purchased by households). We apply an integrated general equilibrium framework with extended measures of the source- and use-side impacts that add up to the overall welfare impact. The distributional impacts depend importantly on the revenue recycling method and treatment of transfer income. In the absence of compensation targeted to particular income groups, use-side impacts tend to be regressive and source-side impacts progressive, with the progressive source-side impacts fully offsetting...
Published: Lawrence H. Goulder & Marc A.C. Hafstead & GyuRim Kim & Xianling Long, 2019. "Impacts of a carbon tax across US household income groups: What are the equity-efficiency trade-offs?," Journal of Public Economics, vol 175, pages 44-64. citation courtesy of