The Initial Incidence of a Carbon Tax across Income Groups

Although carbon taxes are regressive, how the revenue is used—to cut capital taxes, given as a lump sum rebate, or for a labor tax swap—impacts how much the poorest populations are affected.

Working Paper by Roberton C. Williams III, Hal Gordon, Dallas Burtraw, Jared Carbone, and Richard D. Morgenstern — Aug. 7, 2014