A distributional analysis of green tax reforms

I measure the distributional impact of a shift toward greater reliance on e nvironmental taxes (a green tax reform) using both annual and lifetime inco me measures to rank households. An environmental tax reform can be designed that has a negligible impact on the income distribution when the funds are rebated to households through reductions in the payroll tax and personal i ncome tax. I also analyze trade-offs among competing goals of efficiency, e quity, and ease of administration in the design of a green tax reform.