Frederick van der Ploeg, Armon Rezai, Miguel Tovar Reanos

Public Finance Options for Recycling Carbon Tax Revenue in Germany

Rubrik: Articles
FinanzArchiv (FA)

Jahrgang 80 () / Heft 1, S. 39-69 (31)
Publiziert 22.03.2024

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We use a micro simulation model for Germany to show that it is optimal to use part of carbon tax revenue for handing out climate dividends, part to lower income taxes, and part to make up for public revenue shortfalls. The optimal recycling mix is tilted towards climate dividends away from tax reductions as relative inequality aversion increases. For baseline inequality aversion, up to half of carbon tax revenue is used to fund climate dividends and the rest to fund income tax cuts. We consider the implications of a Linear Expenditure System for carbon price policies.

Frederick van der Ploeg Keine aktuellen Daten verfügbar.

Armon Rezai Keine aktuellen Daten verfügbar.

Miguel Tovar Reanos Keine aktuellen Daten verfügbar.