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Should Fuel Taxes Be Scrapped in Favor of Pay-by-the-Mile Charges?


  • Ian Parry


This paper discusses the appropriate balance between traditional gasoline taxes and charging by the mile, focusing on economic efficiency considerations. It begins with a brief discussion of the five major passenger vehicle issues of concern—local pollution, greenhouse warming, oil dependency, traffic congestion, and traffic accidents—and summarizes evidence on the dollar value costs of these problems for passenger vehicles in the United States. It then discusses how much fuel taxation might be justified to account for them, as well as how much taxation might be appropriate on fiscal grounds, assuming per mile charges are unavailable. Finally, it discusses to what extent fuel taxation should be replaced with per mile taxes.

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  • Ian Parry, 2005. "Should Fuel Taxes Be Scrapped in Favor of Pay-by-the-Mile Charges?," World Economics, World Economics, 1 Ivory Square, Plantation Wharf, London, United Kingdom, SW11 3UE, vol. 6(3), pages 91-102, July.
  • Handle: RePEc:wej:wldecn:217

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    1. Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(03), pages 379-414, June.
    2. Akerlof, George A, 1991. "Procrastination and Obedience," American Economic Review, American Economic Association, vol. 81(2), pages 1-19, May.
    3. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, Oxford University Press, vol. 107(3), pages 797-817.
    4. Albert Breton & Gianluigi Galeotti & Pierre Salmon & Ronald Wintrobe, 1995. "Nationalism and Rationality," Post-Print hal-00445587, HAL.
    5. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-440, June.
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    7. Wintrobe,Ronald, 1998. "The Political Economy of Dictatorship," Cambridge Books, Cambridge University Press, number 9780521583299, March.
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    Cited by:

    1. James K. Boyce, 2007. "Public finance, aid and post-conflict recovery," UMASS Amherst Economics Working Papers 2007-09, University of Massachusetts Amherst, Department of Economics.

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