Skip to main content
Article
The Incidence of a U.S. Carbon Tax: A Lifetime and Regional Analysis
The Energy Journal (2009)
  • Kevin Hassett, American Enterprise Institute
  • Aparna Mathur, American Enterprise Institute
  • Gilbert E. Metcalf, Tufts University
Abstract

This paper measures the direct and indirect incidence of a carbon tax using current income and two measures of lifetime income to rank households. Our results suggest that carbon taxes are more regressive when annual income is used as a measure of economic welfare than when lifetime income measures are used. Further, the direct component of the tax, in any given year, is significantly more regressive than the indirect component. We observe a modest shift over time with the direct component of carbon taxes becoming less regressive and the indirect component becoming more regressive. These effects mostly offset each other and the distribution of the total tax burden has not changed much over time. In addition we find that regional variation has fluctuated over the years of our analysis. By 2003 there is little systematic variation in carbon tax burdens across regions of the country.

Keywords
  • energy consumption
Disciplines
Publication Date
2009
Citation Information
Kevin Hassett, Aparna Mathur and Gilbert E. Metcalf. "The Incidence of a U.S. Carbon Tax: A Lifetime and Regional Analysis" The Energy Journal Vol. 30 Iss. 2 (2009)
Available at: http://works.bepress.com/gilbert_metcalf/77/