Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Because electricity is a higher fraction of spending for those with low income, carbon taxes are believed to be regressive. Many argue, however, that their revenues can be used to offset the regressivity. We assess these claims by employing data on 322,000 families in the U.S. Treasury's Distribution Model to study vertical redistributions between rich and poor, as well as horizontal redistributions among families with common incomes but heterogeneous energy intensity of consumption (different home heating and cooling demands). Accounting for the statutory indexing of transfers, and measuring impacts on annual consumption as a proxy for permanent income, we find that the carbon tax burden is progressive, rising across deciles as a fraction of consumption. The rebate of revenue via transfers makes it even more progressive. In every decile, the standard deviation of the change in consumption as a fraction of consumption varies around 1% or 2% and is larger than the average burden (about 0.7%). When existing transfer programs are used to rebate revenue, the tax and rebate together increase that variation to more than 3% within each decile. The average family in the poorest decile gets a net tax cut of about 1% of consumption, but 44% of them get a net tax increase. Relative to no rebate, every type of rebate we consider increases this variation within most deciles. Terms of use: Documents in EconStor mayJEL-Codes: Q580.Keywords: incidence, climate policy, revenue-neutral reform. A market-based pricing policy such as a carbon tax or tradable permit program can reduce emissions at less cost than commonly-employed mandates like a renewable-fuel standard or energy efficiency standard (Goulder and Parry, 2008;Aldy et al. 2010). Despite their greater efficiency, however, carbon pricing has found little favor among U.S. policy makers for a variety of reasons. They may not trust the market to allocate resources efficiently, and they may place more value on objectives other than efficiency. Policymakers may also fear the distributional consequences of carbon pricing, particularly its oft-assumed regressivity. Indeed, carbon pricing likely raises the price of electricity and other carbon-intensive goods that constitute relatively high fractions of low-income family budgets (Metcalf 2009;Grainger and Kolstad 2010).In response, economists point out that measured regressivity depends on how household income is defined and measured; on the consumer and producer shares of ...

The purpose of this analysis is to improve the U.S. Department of the Treasury's distributional model and methodology by defi ning new model parameters. We compute the percentage of capital income attributable to normal versus supernormal return, the percentage of normal return attributable to the "cash fl ow tax" portion of the tax that does not impose a tax burden, and the portion of the burdensome tax on the normal return to capital borne by capital income versus labor income. In summary, 82 percent of the corporate income tax burden is borne by capital income and 18 percent is borne by labor income.

Weisbach, and participants at two NBER workshops for helpful comments and suggestions. Views contained herein are the authors and do not necessarily reflect the views or positions of the U.S. Department of the Treasury. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research. NBER working papers are circulated for discussion and comment purposes. They have not been peer-reviewed or been subject to the review by the NBER Board of Directors that accompanies official NBER publications.

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