Document Type
Article
Publication Date
5-2026
Publication Title
Journal of Environmental Economics and Management
Abstract
I use spatial microsimulation to estimate the geographic incidence of the consumer-facing portion of various revenue-neutral carbon tax designs in Massachusetts. I identify a substantial urban-rural disparity in impacts that is reduced, but not eliminated, by proposed revenue-targeting mechanisms. I further demonstrate that seemingly small variations in the definition of rural households can have substantial impacts on urban-rural equity and the distribution of gains and losses. Proposed policies are highly progressive in the aggregate with most low-income households receiving more in rebates than they pay in taxes, but notable numbers of low-income households are likely to experience significant losses. Methodologically, I improve upon related work, by considering the full distribution of possible effects that each household might experience and demonstrate the importance of this approach. Politically, I find that Democratic-held districts fare better under all policy variations. There are noticeable trade-offs between policies aimed at improving median outcomes in each district and those designed to minimize the number of households facing significant financial losses within each district.
Keywords
carbon tax, spatial microsimulation, political economy, tax incidence, political economy
Volume
137
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Rights
Licensed to Smith College and distributed CC-BY NC ND 4.0 under the Smith College Faculty Open Access Policy.
Version
Author's Accepted Manuscript
Recommended Citation
Sayre, Susan Stratton, "Geography, Income, and the Incidence of a Massachusetts Carbon Tax" (2026). Economics: Faculty Publications, Smith College, Northampton, MA.
https://scholarworks.smith.edu/eco_facpubs/119