The Incidence of a U.S. Carbon Tax: A Lifetime and Regional Analysis
AbstractThis paper measures the direct and indirect incidence of a carbon tax using current income and two measures of lifetime income to rank households. Our results suggest that carbon taxes are more regressive when annual income is used as a measure of economic welfare than when proxies for lifetime income are used. Further, the direct component of the tax, in any given year, is significantly more regressive than the indirect component. In fact, for 1987, the indirect component of the tax is mildly progressive. We observe a modest shift over time with the direct component of carbon taxes becoming less regressive and the indirect component becoming more regressive. These effects mostly offset each other and the distribution of the total tax burden has not changed much over time. In addition we find that regional variation has fluctuated over the years of our anlaysis. By 2003 there is little systematic variation in carbon tax burdens across regions of the country.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13554.
Date of creation: Oct 2007
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Other versions of this item:
- Kevin A. Hassett & Aparna Mathur & Gilbert E. Metcalf, 2009. "The Incidence of a U.S. Carbon Tax: A Lifetime and Regional Analysis," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 155-178.
- Kevin A. Hasset & Aparna Mathur & Gilbert Metcalf, 2007. "The Incidence of a U.S. Carbon Tax: A Lifetime and Regional Analysis," Discussion Papers Series, Department of Economics, Tufts University 0714, Department of Economics, Tufts University.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-11-03 (All new papers)
- NEP-ENE-2007-11-03 (Energy Economics)
- NEP-ENV-2007-11-03 (Environmental Economics)
- NEP-PBE-2007-11-03 (Public Economics)
- NEP-PUB-2007-11-03 (Public Finance)
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.:
- Gilbert E. Metcalf, 2008. "An Empirical Analysis of Energy Intensity and Its Determinants at the State Level," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-26.
- Sergey Paltsev & John M. Reilly & Henry D. Jacoby & Angelo C. Gurgel & Gilbert E. Metcalf & Andrei P. Sokolov & Jennifer F. Holak, 2007.
"Assessment of U.S. Cap-and-Trade Proposals,"
NBER Working Papers
13176, National Bureau of Economic Research, Inc.
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