I had come to the conclusion that the impact of a carbon tax on the low to middle income families was going to be great. It was a no-brainer, really. You can read my own somewhat simplistic thoughts on it, here.
Not surpisingly Centre for Policy Alternatives came out with this report this past week. I've included the pdf link to the full report.
To be fair, BC’s carbon tax needs work
Is BC’s Carbon Tax Fair? analyzes the impact of the tax and revenue “recycling” for households with varying income levels. It finds that the tax is progressive for the first year, although personal and corporate income tax cuts still result in an undesirable net benefit to the highest income households, which also have the largest ecological footprint.
As the carbon tax increases in subsequent years, however, it becomes regressive, meaning low-income families pay a larger share of their income to the tax than higher-income families. The authors argue that the best way to fix the problem of inequality is to rework how carbon tax revenues are spent.
Is BC’s Carbon Tax Fair?An Impact Analysis for Different Income Levels - PDF File, 741 Kb