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Environmental Tax and the Distribution of Income among Heterogeneous Workers

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  • Mireille Chiroleu-Assouline

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

  • Mouez Fodha

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

This paper analyzes the environmental tax policy issues when labor is heterogeneous. The objective is to assess whether an environmental tax policy could be Pareto improving, when the revenue of the pollution tax is recycled by a change in the labor tax properties. We show that, depending on the heterogeneity characteristics of labor and on the initial structure of the tax system, a policy mix could be designed in order to leave each class of worker unharmed. It consists of an increase in progressivity together with a decrease in the flat rate component of the wage tax.

Suggested Citation

  • Mireille Chiroleu-Assouline & Mouez Fodha, 2009. "Environmental Tax and the Distribution of Income among Heterogeneous Workers," Post-Print halshs-00348891, HAL.
    • Handle: RePEc:hal:journl:halshs-00348891
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00348891v2
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    References listed on IDEAS

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    Cited by:

    1. Aubert, Diane & Chiroleu-Assouline, Mireille, 2019. "Environmental tax reform and income distribution with imperfect heterogeneous labour markets," European Economic Review, Elsevier, vol. 116(C), pages 60-82.
    2. Chiroleu-Assouline, Mireille & Fodha, Mouez, 2014. "From regressive pollution taxes to progressive environmental tax reforms," European Economic Review, Elsevier, vol. 69(C), pages 126-142.
    3. Mireille Chiroleu-Assouline & Mouez Fodha, 2023. "Debt, tax and environmental policy [Dette, taxe et politique environnementale]," Post-Print halshs-04181981, HAL.
    4. Jan Siegmeier & Linus Mattauch & Max Franks & David Klenert & Anselm Schultes & Ottmar Edenhofer, 2015. "A Public Finance Perspective on Climate Policy: Six Interactions That May Enhance Welfare," Working Papers 2015.31, Fondazione Eni Enrico Mattei.
    5. Klenert, David & Mattauch, Linus, 2016. "How to make a carbon tax reform progressive: The role of subsistence consumption," Economics Letters, Elsevier, vol. 138(C), pages 100-103.
    6. Mireille Chiroleu-Assouline & Mouez Fodha, 2009. "Double Dividend and Distribution of Welfare: Advanced Results and Empirical Considerations," Economie Internationale, CEPII research center, issue 120, pages 91-108.
    7. Mireille Chiroleu-Assouline & Mouez Fodha, 2011. "Verdissement de la fiscalité. À qui profite le double dividende ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 409-431.
    8. Nicholas Kilimani, 2014. "Water Taxation and the Double Dividend Hypothesis," Working Papers 201451, University of Pretoria, Department of Economics.
    9. Mireille Chiroleu-Assouline, 2022. "Rendre acceptable la nécessaire taxation du carbone. Quelles pistes pour la France ?," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 15-53.
    10. Li, Xiaochun & Fu, Huanan & Wu, Yunyun, 2020. "Pollution mitigation, unemployment rate and wage inequality in the presence of agricultural pollution," China Economic Review, Elsevier, vol. 61(C).
    11. Thais NUNEZ-ROCHA & Inmaculada MARTíNEZ-ZARZOSO, 2018. "Is National Environmental Legislation Affecting Emissions?," LEO Working Papers / DR LEO 2505, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.

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    More about this item

    Keywords

    Environmental tax; Heterogeneous agents; Welfare analysis; Tax progressivity;
    All these keywords.

    JEL classification:

    • D60 - Microeconomics - - Welfare Economics - - - General
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies

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