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The Distributional Impacts of a VMT-Gas Tax Swap

Author

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  • Gilbert E. Metcalf

Abstract

More stringent fuel-economy standards and increased popularity of electric vehicles (EVs) are contributing to an erosion in federal motor vehicle fuel excise tax revenues. One solution to this problem is a vehicle miles traveled (VMT) tax. I consider the distributional implications of a federal tax swap where a VMT tax is used to finance a reduction in the federal excise tax on gasoline. The distributional impact of this tax swap depends on the sign of the income elasticity of demand for fuel intensity.

Suggested Citation

  • Gilbert E. Metcalf, 2023. "The Distributional Impacts of a VMT-Gas Tax Swap," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 4(1), pages 4-42.
    • Handle: RePEc:ucp:epolec:doi:10.1086/722672
    DOI: 10.1086/722672
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    Cited by:

    1. Sarah Armitage & Noël Bakhtian & Adam Jaffe, 2024. "Innovation Market Failures and the Design of New Climate Policy Instruments," Environmental and Energy Policy and the Economy, University of Chicago Press, vol. 5(1), pages 4-48.
    2. Delfgaauw, Josse & Swank, Otto, 2024. "The political climate trap," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).
    3. Cheon, Jiyeon, 2025. "Distributional effects of a vehicle miles traveled tax over the different vehicle efficiency," Economics of Transportation, Elsevier, vol. 41(C).
    4. Zhao, Jiaxin & Mattauch, Linus, 2022. "When standards have better distributional consequences than carbon taxes," Journal of Environmental Economics and Management, Elsevier, vol. 116(C).
    5. Edward L. Glaeser & Caitlin S. Gorback & James M. Poterba, 2022. "How Regressive Are Mobility-Related User Fees and Gasoline Taxes?," NBER Chapters, in: Tax Policy and the Economy, Volume 37, pages 1-56, National Bureau of Economic Research, Inc.
    6. Josse Delfgaauw & Otto Swank, 2023. "The Gasoline Climate Trap," Tinbergen Institute Discussion Papers 23-025/VII, Tinbergen Institute.

    More about this item

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • R48 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Government Pricing and Policy

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