This paper offers a political model of green tax reforms in which the use of the revenue from the ecotax is an integrated part. We use the model to explain why and when a link between an ecotax and cuts in other non-environmental taxes can be expected. In our model, green tax swaps arise because a producer lobby group, even if the use of the revenue does not affect profits per se, takes an interest in the allocation of revenue from the ecotax. The reason being that the lobby group uses the allocation of the revenue to reduce the 'price' of other political favours that it cares a lot about. To this end, the lobby group acts in the best interest of the voters, and to the extent the the voters prefer tax cuts on labour income. The paper also analyses the environmental impact of various budgetary procedures and discusses to what extent the revenue from an ecotax can be used to create a constituency in favour of the environmental protection.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number
1997-20.
Find related papers by JEL classification: D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Models of Political Processes: Rent-seeking, Elections, Legislatures, and Voting Behavior D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)