double-dividend hypothesis

Related Overviews


'double-dividend hypothesis' can also refer to...


More Like This

Show all results sharing this subject:

  • Economics


Show Summary Details

Quick Reference

The claim that a tax levied on an activity causing a negative externality both reduces the externality problem and raises tax revenue, thus allowing other distortionary taxes to be reduced. For example, the introduction of a carbon tax will decrease carbon emissions and raise revenue, thus permitting a reduction in the rate of income tax or profit tax. The idea of a double-dividend is intuitively compelling, but it has proved difficult to demonstrate in formal models.

Subjects: Economics.

Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.