TY  - JOUR
AU  - Fullerton, Don
AU  - Heutel, Garth
AU  - Metcalf, Gilbert E
TI  - Does the Indexing of Government Transfers Make Carbon Pricing Progressive?
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16768
PY  - 2011
Y2  - February 2011
DO  - 10.3386/w16768
UR  - http://www.nber.org/papers/w16768
L1  - http://www.nber.org/papers/w16768.pdf
N1  - Author contact info:
Don Fullerton
Department of Finance
University of Illinois
515 East Gregory Drive, BIF Box#30 (MC520)
Champaign, IL  61820
Tel: 217/244-3621
Fax: 217/244-3102
E-Mail: dfullert@illinois.edu

Garth Heutel
436 Andrew Young School
Department of Economics
Georgia State University
PO Box 3992
Atlanta, GA 30302-3992
Tel: 404 413 0159
E-Mail: gheutel@gsu.edu

Gilbert E. Metcalf
Department of Economics
Tufts University
Medford, MA 02155
Tel: 617/627-3685
Fax: 617/627-3917
E-Mail: gilbert.metcalf@tufts.edu
AB  - We analyze both the uses side and the sources side incidence of domestic climate policy using an analytical general equilibrium model, taking into account the degree of government program indexing.  When transfer programs such as Social Security are explicitly indexed to inflation, higher energy prices automatically lead to cost-of-living adjustments for recipients.  We show results with no indexing, 100 percent indexing, and partial indexing based on our analysis of actual transfer programs.  When households are classified by annual income, the indexing of U.S. transfers is not enough to offset the regressive uses side, but when they are classified by annual expenditures as a proxy for permanent income, transfer indexing does offset regressivity across the lowest income groups.
ER  -