Sustainable public finance: Double neutrality instead of double dividend

  • A common answer to the financial challenges of green transformation and the shortcomings of the current taxation system is the “double dividend approach”. Environmental taxes should either feed the public purse in order to remove other distorting taxes, or directly contribute to financing green transformation. Germany adopted the former approach. However, this article argues, by using the example of Germany, that “good taxes” in terms of public finance should be neutral in terms of environmental protection and vice versa. Neutral taxation in terms of environmental impacts can be best achieved by applying the “Henry George principle”. Additionally, neutral taxation in terms of public finance is best achieved if the revenues from environmental taxes are redistributed to the citizens as an ecological basic income. Thus, distortive effects of environmental charges in terms of distribution and political decision-making might be removed. However, such a financial framework could be introduced step by step, starting with a tax shift.

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Author:Dirk Löhr
URN:urn:nbn:de:hbz:tr5-1602
DOI:https://doi.org/10.4236/jep.2016.72013
Parent Title (English):Journal of Environmental Protection
Document Type:Article
Language:English
Date of OPUS upload:2022/11/02
Date of first Publication:2016/02/04
Publishing University:Hochschule Trier
Release Date:2022/11/02
Tag:Henry George principle; Tinbergen rule; double dividend; double neutrality; ecological basic income
GND Keyword:Finanzwirtschaft; Nachhaltigkeit
Volume:7
Issue:2
Page Number:15
First Page:145
Last Page:159
Departments:FB Umweltwirtschaft/-recht (UCB)
Dewey Decimal Classification:3 Sozialwissenschaften / 33 Wirtschaft
Licence (German):License LogoCreative Commons - CC BY - Namensnennung 4.0 International