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Environmental tax revenue and public health care expenditure

Author

Listed:
  • Prince Fosu

    (Rockhurst University)

  • Kevin Sylwester

    (Southern Illinois University)

Abstract

This paper considers to what extent environmental taxes are associated with more public healthcare spending. The double-dividend hypothesis argues that these taxes not only lower pollution but generate revenue that can then be used to enhance welfare such as health care. Using a panel of countries and controlling for pollution to better distinguish between these two dividends, we find that countries with greater environmental tax revenue do, indeed, spend more on public healthcare although this result primarily holds for energy and transportation taxes. This finding arises for both high- and low-income countries but is stronger for democracies.

Suggested Citation

  • Prince Fosu & Kevin Sylwester, 2025. "Environmental tax revenue and public health care expenditure," Economics Bulletin, AccessEcon, vol. 45(4), pages 2041-2054.
    • Handle: RePEc:ebl:ecbull:eb-24-00420
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2025/Volume45/EB-25-V45-I4-P177.pdf
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    References listed on IDEAS

    as
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    Keywords

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    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H5 - Public Economics - - National Government Expenditures and Related Policies

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