Business Management Dynamics

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ISSN: 2047-7031

bmd Business and Management Dynamics bmd
ISSN: 2047-7031  
Volume  8   Issue 12  2019  
Article Abstract
Design of an Incentive Based Carbon Tax System
Keywords:  Tax, Carbon Tax, Incentive Model, Modelling
Joseph Boyd and Kouroush Jenab
This article describes a revenue neutral approach to reducing greenhouse gas emissions. The revenue from the carbon taxes is used to finance an environmental earned income credit. Different from other proposals, the proposal would be guaranteed for taxpayers with income under $ 50,000. For taxpayer with income in excess of these amounts they would receive the credit only if greenhouse emissions in their state of residence were reduced to a predetermined level. The advantage of this approach is to provide motivation for states, corporation and high income individuals to actively reduce greenhouse emissions. Current revenue neutral proposals that allow corporations to pass the tax to individuals with the individual receiving an equal credit may not provide sufficient motivation for a significant reduction in greenhouse gas emissions. This proposal encourages states to actively reduce greenhouse emissions so that all its citizens would receive the environmental credit.
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