The Political Economy of Motor-Fuel Taxation
AbstractThis paper examines the political and economic underpinnings of gasoline tax policy. The theoretical model extends the earlier work of Hettich and Winer (1988) to flush out the effect of a change in the pre-tax price of a taxable activity on the politically optimal tax rate. Using a large cross-sectional sample of U.S. states over 1960-94, the empirical model tests the predictions of the theoretical model within the context of the state tax policy on gasoline. While simultaneously controlling for other politico-economic influences, we find that the influence of changes in gas prices on tax rates is negative. To our knowledge, this is the first study to include a fully developed theoretical model and its empirical application to the gasoline market for a test of the votemaximizing model of tax policy.
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Bibliographic InfoArticle provided by International Association for Energy Economics in its journal The Energy Journal.
Volume (Year): Volume20 (1999)
Issue (Month): Number 1 ()
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- F0 - International Economics - - General
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- Fredriksson, Per G. & Millimet, D.L.Daniel L., 2004. "Comparative politics and environmental taxation," Journal of Environmental Economics and Management, Elsevier, vol. 48(1), pages 705-722, July.
- Shanjun Li & Joshua Linn & Erich Muehlegger, 2012.
"Gasoline Taxes and Consumer Behavior,"
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- Kossov, Vladimir & Kossova, Elena, 2013. "Gasoline price as social phenomenon," MPRA Paper 48720, University Library of Munich, Germany.
- Julien Daubanes & Lisa Leinert, 2012. "Optimum Tariffs and Exhaustible Resources: Theory and Evidence for Gasoline," CER-ETH Economics working paper series 12/163, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Scott, K. Rebecca, 2012. "Rational habits in gasoline demand," Energy Economics, Elsevier, vol. 34(5), pages 1713-1723.
- Parry, Ian & Portney, Paul & Harrington, Winston & Gruenspecht, Howard, 2003. "The Economics of Fuel Economy Standards," Discussion Papers dp-03-44, Resources For the Future.
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