Environmental Tax and the Distribution of Income among Heterogeneous Workers

Mireille Chiroleu-Assouline (1, 2) , Mouez Fodha (1, 2)

1 PSE - Paris School of Economics
2 CES - Centre d'économie de la Sorbonne

This paper analyzes the environmental tax policy issues when labor is heterogeneous. The objective is to assess whether an environmental tax policy could be Pareto improving, when the revenue of the pollution tax is recycled by a change in the labor tax properties. We show that, depending on the heterogeneity characteristics of labor and on the initial structure of the tax system, a policy mix could be designed in order to leave each class of workers unharmed. It consists of an increase in progressivity together with a decrease in the flat rate component of the wage tax.

Mots clés: Environmental tax; Heterogenous agents; Welfare analysis; Tax progressivity

Mots clés: Taxe environnementale; Agents hétérogènes; Analyse de bien-être; Progressivité de l'impôt

Domaines: Economies et finances

Mireille Chiroleu-Assouline, Mouez Fodha. Environmental Tax and the Distribution of Income among Heterogeneous Workers. Annales d'Economie et de Statistique, 2011, 103-104, pp.71-92. ⟨10.2307/41615494⟩. ⟨hal-00652900⟩