A "Double Dividend", After All?
AbstractThe consensus view among economists seems to be that a green tax reform is unlikely to be associated with a "double dividend" (Bovenberg 1998). However, the results derived in the present paper suggest that this view needs to be qualified. We demonstrate that a green tax reform is likely to be associated with a significant "double dividend" if the government prior to taking the environmental aspect into account has adopted a proportional tax structure due to the administrative costs involved in differentiating commodity tax rates, and if the green tax reform stimulates the labour supply and has desirable income distributional effects.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces9918.
Date of creation: Mar 1999
Date of revision:
Optimal taxation; externalities; administrative costs; green tax reform; double dividend;
Find related papers by JEL classification:
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-12 (All new papers)
- NEP-ENV-2008-04-12 (Environmental Economics)
- NEP-PUB-2008-04-12 (Public Finance)
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