Carbon taxes and fiscal reform in the United Atates

Dale W. Jorgenson, Richard J. Goettle, Mun S. Ho, Peter J. Wilcoxen

Research output: Contribution to journalArticlepeer-review

17 Scopus citations


In this paper we consider the economic and environmental impacts of taxes on emissions of greenhouse gases. Substituting carbon taxes for other sources of revenue or using the proceeds to reduce deficits or finance expenditures are the keys to integration of carbon taxes with fiscal reform. Recycling carbon tax revenues through reductions of capital income tax rates provides the largest margin of economic benefits over the costs of emissions control. Reducing capital tax rates lowers the cost of capital services and increases the rate of capital formation. This mechanism provides a dramatic illustration of the power of intertemporal general equilibrium modeling in the design of new energy and environmental policies for the United States.

Original languageEnglish (US)
Pages (from-to)121-138
Number of pages18
JournalNational Tax Journal
Issue number1
StatePublished - Mar 2015


  • Carbon taxes
  • Fiscal reform
  • Revenue recycling

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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