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Diane Publishing Books
Offsetting a Carbon Taxäó»s Costs on Low-Income Households
Terry Dinan (au)
Imposing a tax on carbon dioxide emissions would reduce the damage from climate change but would also impose a larger burden, relative to income, on low-income households than on high-income households. This study evaluates two broad groupings of options for reducing the regressive effects of a carbon tax; one group of options would affect large segments of the economy, for ex. by reducing payroll taxes, and the other group of options would be targeted at low-income households, for ex. by providing an additional payment to households currently receiving electronic transfer benefits. Each option is evaluated based on the percent of low-income households that it would affect, whether it would provide comparatively larger benefits for lower-income households, its administrative costs, and its implications for economic efficiency, specifically whether it would increase incentives to work and invest and whether it would preserve the incentives to reduce emissions that the carbon tax would create. Tables and figures. This is a print on demand report.
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