Abstract
This paper studies environmental taxation in a Mirrlees setting when energy, a polluting good, is used both as a factor of production and a final consumption good. The model is calibrated for the Czech economy. We study two different tax systems. Both consider a non-linear income tax but the first one considers a linear energy tax, while the second one allows for a non-linear taxation of energy. We show that: (i) households' energy consumption should be subsidized except if the environmental external costs of energy consumption are sufficiently high (ii) The subsidy applied to energy consumption should decrease with income.
Keywords
energy tax; Pigouvian tax; redistributive concerns;
JEL codes
- H21: Efficiency • Optimal Taxation
- H23: Externalities • Redistributive Effects • Environmental Taxes and Subsidies
Reference
Norbert Ladoux, and Milan Scasny, “Energy Price and Redistribution in Czech Republic”, TSE Working Paper, n. 14-527, May 2014.
See also
Published in
TSE Working Paper, n. 14-527, May 2014