ZEW Discussion Papers
Green Tax Reform and Employment: The Interaction of Profit and Factor Taxes
Boeters, Stefan (2001), Green Tax Reform and Employment: The Interaction of Profit and Factor Taxes, ZEW Discussion Paper No. 01-45, Mannheim., erschienen in: FinanzArchiv Download
The employment effects of an ecological tax reform depend decisively on the presence of a profit tax and on the extent to which profits are taxed.
This is shown in a model where firms have monopoly power on product markets and bargain over wages with unions on the labour market.
In this setting, the value of the employment-maximising energy tax rate depends on the level of the profit tax.
The question of whether there is unemployment or not turns out to be less important.
Keywords: factor taxes, profit taxes, ecological tax reform, trade unions, unemployment
