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Green taxes: Refunding rules and lobbying

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  • Aidt, Toke S.

Abstract

Green taxes can internalize environmental externalities and raise revenues. We develop a positive theory that treats both of these aspects as endogenous outcomes of special-interest and electoral politics. We consider the choice among three (endogenous) refunding rules: income tax cuts, extra public spending and tax burden compensation to polluters. We show that a polluter lobby group may lobby for the ecotax revenue to be refunded to voters rather than to its members. The reason is that the "price" that the lobby group must pay for a reduction in the green tax can be reduced by supporting a refunding rule that pleases voters. Our analysis provides insights into recent green tax reforms in Europe.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 60 (2010)
Issue (Month): 1 (July)
Pages: 31-43

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Handle: RePEc:eee:jeeman:v:60:y:2010:i:1:p:31-43

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Web page: http://www.elsevier.com/locate/inca/622870

Related research

Keywords: Green taxes Refunding Lobby groups Electoral competition;

References

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  1. Gene Grossman & Elhanan Helpman, 1994. "Electoral Competition and Special Interest Politics," NBER Working Papers 4877, National Bureau of Economic Research, Inc.
  2. Dijkstra, Bouwe R., 1998. "A two-stage rent-seeking contest for instrument choice and revenue division, applied to environmental policy," European Journal of Political Economy, Elsevier, Elsevier, vol. 14(2), pages 281-301, May.
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Citations

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Cited by:
  1. Habla, Wolfgang & Roeder, Kerstin, 2013. "Intergenerational aspects of ecotax reforms - An application to Germany," Munich Reprints in Economics, University of Munich, Department of Economics 20469, University of Munich, Department of Economics.
  2. Simone Borghesi & Giulio Cainelli & Massimiliano Mazzanti, 2012. "Brown Sunsets and Green Dawns in the Industrial Sector: Environmental Innovations, Firm Behavior and the European Emission Trading," Working Papers, Fondazione Eni Enrico Mattei 2012.03, Fondazione Eni Enrico Mattei.
  3. Roeder, Kerstin & Habla, Wolfgang, 2012. "The Political Sustainability of Germany's Environmental Tax Rate," Annual Conference 2012 (Goettingen): New Approaches and Challenges for the Labor Market of the 21st Century, Verein für Socialpolitik / German Economic Association 62060, Verein für Socialpolitik / German Economic Association.
  4. Massimiliano Mazzanti & Antonio Musolesi, 2011. "Income and time related effects in EKC," Working Papers 201105, University of Ferrara, Department of Economics.
  5. Joachim Fuenfgelt & Guenther G. Schulze, 2011. "Endogenous Environmental Policy when Pollution is Transboundary," Discussion Paper Series, Department of International Economic Policy, University of Freiburg 14, Department of International Economic Policy, University of Freiburg, revised Feb 2011.
  6. Joschka Gerigk & Ian A. MacKenzie & Markus Ohndorf, 2014. "A model of benchmarking regulation: revisiting the efficiency of environmental standards," Discussion Papers Series, School of Economics, University of Queensland, Australia 519, School of Economics, University of Queensland, Australia.
  7. Coria, Jessica & Mohlin, Kristina, 2013. "On Refunding of Emission Taxes and Technology Diffusion," Working Papers in Economics, University of Gothenburg, Department of Economics 573, University of Gothenburg, Department of Economics.
  8. Alesina, Alberto & Passarelli, Francesco, 2014. "Regulation versus taxation," Journal of Public Economics, Elsevier, Elsevier, vol. 110(C), pages 147-156.
  9. Toke Aidt & Uk Hwang, 2014. "To Ban or Not to Ban: Foreign Lobbying and Cross National Externalities," Cambridge Working Papers in Economics, Faculty of Economics, University of Cambridge 1402, Faculty of Economics, University of Cambridge.
  10. Massimiliano Mazzanti & Roberto Zoboli, 2012. "A Political Economy Approach to Resource Taxation: Weak Sustainability, Revenue Recycling and Regional Planning," Working Papers 201202, University of Ferrara, Department of Economics.
  11. Andrea Kollmann & Friedrich Schneider, 2010. "Why Does Environmental Policy in Representative Democracies Tend to Be Inadequate? A Preliminary Public Choice Analysis," Sustainability, MDPI, Open Access Journal, vol. 2(12), pages 3710-3734, November.

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