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Tax Review Commission Meeting - Shared screen with speaker view
Nicole Woo
Thanks for such a detailed presentation. It is my understanding that the differences in consumption patterns between the 5 income quintiles are based on 2019 data. How does your model shift these patterns for future years, like 2025 and 2045, to account for the differences between the 5 income quintiles in their responses to the carbon tax? While high-income households can afford to quickly shift their consumption patterns in response to the tax, low-income households have less ability to do so. It seems likely that low-income households would get stuck paying the higher prices caused by the tax for a longer period of time than high-income households. This would seem to affect the assessment of the progressivity of the tax.
Nicole Woo
Thanks for your response about the different income quintiles. To clarify, as your model shifts the consumption of goods in the future, does it take into account whether or not households can afford to make changes to their consumption patterns? For example, low-income households are less able to afford electric vehicles. Also, low-income homeowners and renters don't have the same ability to purchase solar panels or high-efficiency appliances.