Scandinavian Working Papers in Economics
Umeå Economic Studies,
Umeå University, Department of Economics
No 607: Environmental Policy, Efficient Taxation and Unemployment
Thomas Aronsson ()
Additional contact information
Thomas Aronsson: Department of Economics, Umeå University, Postal: S 901 87 Umeå, Sweden
Abstract: In this paper, I consider environmental policy as part of a mixed tax problem with a general income tax and linear commodity taxes. I assume that the wage rate is determined by bargaining between unions and firms. The results show that the change in the number of employed persons, following a change in the use of a tax instrument, affects the optimal tax structure via two channels; (i) it makes the tax revenues available for public expenditures more or less costly to collect, and (ii) it affects the aggregate demand for the good that causes the environmental damage. This means that the use of taxation to counteract the labor market imperfection is not easily separated from the environmental aspects of tax policy. As a consequence, the so called 'additivity' property characterizing the commodity tax structure in previous studies does not apply.
Keywords: Optimal taxation; external effects; unemployment
32 pages, April 3, 2003
Full text files
DownloadAsset.action...Id=3&assetKey=ues607
Questions (including download problems) about the papers in this series should be directed to David Skog ()
Report other problems with accessing this service to Sune Karlsson ().
This page generated on 2024-02-05 17:13:51.