What drives gasoline taxes?
AbstractGasoline taxes are the most important tax on car use. The question naturally arises as to what tax would be adopted by a government that responds to the preferences of the public. To address that issue, we begin with the standard Downsian model, where policy is determined by the median voter. This model predicts that as long as the median voter is not a car user, he wants high taxes on road use and a road capacity that maximizes net tax revenues. When he becomes a driver himself, he wants road user taxes that are lower and only increase to control congestion, as well as more road capacity. We then use panel data for 28 countries and find support for our theory. When the median voter becomes a driver, the gasoline tax drops on average by 20%.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven, Centrum voor Economische Studiën in its series Center for Economic Studies - Discussion papers with number ces10.01.
Date of creation: Jan 2010
Date of revision:
gasoline taxes; median voter theory; political economy;
Find related papers by JEL classification:
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
- Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Costs; Distributional Effects; Employment Effects
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-12-23 (All new papers)
- NEP-CDM-2010-12-23 (Collective Decision-Making)
- NEP-ENE-2010-12-23 (Energy Economics)
- NEP-PUB-2010-12-23 (Public Finance)
You can help add them by filling out this form.
Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- A driving median voter reduces gas taxes
by Economic Logician in Economic Logic on 2011-02-01 15:40:00
- Russo, Antonio, 2013.
"Voting on road congestion policy,"
Regional Science and Urban Economics,
Elsevier, vol. 43(5), pages 707-724.
- DE BORGER, Bruno & PROOST, Stef, 2010.
"A political economy model of road pricing,"
2010014, University of Antwerp, Faculty of Applied Economics.
- 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.
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