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Carbon Tax ( CO2 ) from 1991 to 2018 in Sweden - results

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  • Informative
Reactions: mblakele
It's great to have data like this. I was particularly interested in any discussion of regressive effects. One of the arguments against a carbon tax is that it would weight heavily on low-income households. Here's what I found:

[...] the financial revenues generated by the tax can be used to compensate for distributional effects and/or help finance necessary adaption and mitigation measures.

[...]

Since the tax is applied uniformly over all users it is regressive in that low-income households will have to pay a larger proportion of their income to the tax as opposed to high-income households. However, such distributional effects can be solved by distributional policies, and to some extent this was also the case in the tax reform of 1991 in that it included an increase in basic income tax reductions for low and middle-income households. It has also been the case during increases of the tax that other taxes affecting the households (e.g. the income tax) have been reduced. How the tax has affected the industrial sector will differ widely depending on the energy intensity of a specific sector. The possibility of the specific industry to pass on the cost increase to the consumers (which depend on their market position) also matters.​

Contrast this with Economists' Statement | Climate Leadership Council which proposes a rebate or dividend to combat the regressive effects of a carbon tax:

V. To maximize the fairness and political viability of a rising carbon tax, all the revenue should be returned directly to U.S. citizens through equal lump-sum rebates. The majority of American families, including the most vulnerable, will benefit financially by receiving more in “carbon dividends” than they pay in increased energy prices.​
 

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