Mike Moffatt describes British Columbia's revenue-neutral carbon tax with equity considerations:
You have a small, escalating carbon tax that is used to reduce income and corporate income taxes. To quell any fears of regressivity, the government is sending rebate checks to low income households. It is about win-win as you can get in public policy.
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Replacing high-distortionary taxes with low-distortionary ones is simply good economics. Even if the plan has no environmental benefits whatsoever, this move is a wise one.
