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Ecological Tax Reform with Exemptions for the Export Sector in a two Sector two Factor Model

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  • Reto Schleiniger

Abstract

This present paper analyzes an energy tax reform that exempts the energy-intensive export sector from paying the energy tax and uses the additional revenue to cut existing taxes in all sectors. To that end, a two sector two factor model of an open economy that is small on the import side but not on the export side is applied. Within this model, an equivalence between a tax reform with and without exemption of the export sector is derived. The equivalence occurs because in both tax schemes the tax burden is shifted through an increasing producer price of labor from the domestic to the foreign household.

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  • Reto Schleiniger, "undated". "Ecological Tax Reform with Exemptions for the Export Sector in a two Sector two Factor Model," IEW - Working Papers 029, Institute for Empirical Research in Economics - University of Zurich.
    • Handle: RePEc:zur:iewwpx:029
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    More about this item

    Keywords

    Environmental tax reform; tax incidence; general equilibrium model;
    All these keywords.

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

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