Regime-Dependent Environmental Tax Multipliers: Evidence from 75 Countries

doi:10.1080/21606544.2022.2089238

Publication:
Regime-Dependent Environmental Tax Multipliers: Evidence from 75 Countries

dc.contributor.author	Schoder, Christian
dc.date.accessioned	2023-07-13T18:50:16Z
dc.date.available	2023-07-13T18:50:16Z
dc.date.issued	2022-06-27
dc.description.abstract	This paper reviews the main transmission channels of an environmental tax reform shifting the tax burden from labour to carbon emission. The analysis uses a simple open-economy macro model and estimates dynamic environmental tax as well as personal income tax multiplier effects on output and employment for a panel of 75 high- and low-income countries from 1994 to 2018. Tax policy changes are identified by cyclically adjusting the tax revenues. The estimated environmental tax multiplier effects on output range from 1 on impact to 1.8 at the peak. Personal income tax multipliers are slightly higher, ranging from 1.4 to 2.3. While income taxes reduce employment, environmental taxes do not. Environmental tax multipliers are highly regime dependent: they are close to zero or statistically insignificant unless taxes are increased when output contracts, fuel prices are high, the environmental tax levels are high, or the carbon intensity of output is low. Commodity trade-exposed countries face higher tax multipliers. This analysis concludes that, compared with income taxes, environmental taxes can be a less contractionary source of revenues to support the post-COVID-19 fiscal consolidation efforts, especially in countries that are at the beginning of their decarbonization efforts.	en
dc.identifier.citation	Journal of Environmental Economics and Policy
dc.identifier.doi	10.1596/40009
dc.identifier.issn	2160-6544 (Print)
dc.identifier.issn	2160-6552 (eISSN)
dc.identifier.uri	https://openknowledge.worldbank.org/handle/10986/40009
dc.language.iso	en_US
dc.publisher	Taylor and Francis
dc.rights	CC BY-NC-ND 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	https://creativecommons.org/licenses/by-nc-nd/3.0/igo/
dc.subject	ENVIRONMENTAL TAXES
dc.subject	PERSONAL INCOME TAXES
dc.subject	TAX MULTIPLIERS
dc.subject	REGIME DEPENDENCE
dc.subject	LOCAL PROJECTION
dc.title	Regime-Dependent Environmental Tax Multipliers	en
dc.title.subtitle	Evidence from 75 Countries	en
dc.type	Journal Article
dspace.entity.type	Publication
okr.associatedcontent	https://www.tandfonline.com/doi/abs/10.1080/21606544.2022.2089238 Journal website (version of record)
okr.crossref.title	Regime-Dependent Environmental Tax Multipliers: Evidence from 75 Countries
okr.date.disclosure	2023
okr.doctype	Publications & Research
okr.doctype	Publications & Research::Journal Article
okr.externalcontent	External Content
okr.identifier.doi	10.1080/21606544.2022.2089238
okr.identifier.doi	http://dx.doi.org/10.1596/40009
okr.language.supported	en
okr.pagenumber	124-167
okr.peerreview	Academic Peer Review
okr.region.geographical	World
okr.topic	Law and Development::Tax Law
okr.topic	Law and Development::Legal Reform
okr.volume	12(2)