The Incidence of a U.S. Carbon Tax: A Lifetime and Regional Analysis
This 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.
|Date of creation:||Oct 2007|
|Publication status:||published as 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. 30(2), pages 155-178.|
|Contact details of provider:|| Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.|
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- 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.
- S. Paltsev & J. Reilly & H. Jacoby & A. Gurgel & G. Metcalf & A. Sokolov & J. Holak, 2007.
"Assessment of U.S. Cap-and-Trade Proposals,"
0705, Massachusetts Institute of Technology, Center for Energy and Environmental Policy Research.
- 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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