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Ideology, Incidence and the Political Economy of Fuel Taxes: Evidence from the California 2018 Proposition 6

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Listed:
  • Lucas Epstein
  • Erich Muehlegger

Abstract

In 2018, California voters rejected Proposition 6, a ballot initiative that sought to repeal state gasoline taxes and vehicle fees enacted as part of the 2017 Road Repair and Accountability Act. We study the relationship between support for the proposition, political ideology and the economic burdens imposed by the Act. For every hundred dollars of annual per-household imposed costs, we estimate that support for the proposition rose by 3 - 9 percentage points. Notably, we find that the relationship between voting and the economic burden of the policy is seven times stronger in the most conservative tracts relative to the most liberal tracts. Since conservative areas in California and elsewhere tend to bear a higher burden from transportation and energy taxes than liberal areas, heterogeneity in the response to economic burdens has important implications for the popular support for environmental taxes and the ongoing policy debate about how to finance future road infrastructure.

Suggested Citation

  • Lucas Epstein & Erich Muehlegger, 2024. "Ideology, Incidence and the Political Economy of Fuel Taxes: Evidence from the California 2018 Proposition 6," NBER Working Papers 32311, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32311
    Note: EEE PE
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    More about this item

    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

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