Research Report Carbon Taxes and Corporate Tax Reform
Donald Marron, Eric Toder
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The revenues from a carbon tax could help finance lower corporate tax rates, extending business tax preferences, or other corporate tax reforms. Such a tax swap would reduce the environmental risks of carbon emissions and improve the efficiency of Americas corporate tax system. But it would also pose a significant distributional challenge. A carbon tax would fall disproportionately on low-income families, while corporate tax cuts would disproportionately benefit those with high incomes. Policymakers may want to use some revenue to offset those impacts. They may also want to use some carbon revenues for deficit reduction.

Research Areas Economic mobility and inequality Neighborhoods, cities, and metros Taxes and budgets Climate, disasters, and environment
Tags Fiscal policy Infrastructure Individual taxes Taxes and business Federal budget and economy Campaigns, proposals, and reforms Climate mitigation, sustainability, energy and land use Federal tax issues and reform proposals
Policy Centers Urban-Brookings Tax Policy Center