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The Consumer Burden of a Carbon Tax on Gasoline

Fuel Taxes and the Poor: The Distributional Effects of Gasoline Taxation and Their Implications for Climate Policy, Thomas Sterner, ed., Resources for the Future Press, 2011

31 Pages Posted: 8 Feb 2013  

Kevin A. Hassett

American Enterprise Institute (AEI)

Aparna Mathur

American Enterprise Institute (AEI)

Gilbert E. Metcalf

Tufts University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: May 26, 2009

Abstract

This paper measures the incidence of a carbon tax on gasoline using current income and two measures of lifetime income to rank households. Our results suggest that carbon taxes on gasoline are more regressive when annual income is used as a measure of economic welfare than when lifetime income measures are used. In addition we find that the regional variation in the gasoline tax burden is likely to be modest varying by less than one-half of a percentage point with little fluctuation over the years of our analysis. These results carry through when we consider the incidence of the current state gasoline taxes, both across income deciles as well as across regions.

Keywords: carbon tax, gasoline, tax policy, tax burden

Suggested Citation

Hassett, Kevin A. and Mathur, Aparna and Metcalf, Gilbert E., The Consumer Burden of a Carbon Tax on Gasoline (May 26, 2009). Fuel Taxes and the Poor: The Distributional Effects of Gasoline Taxation and Their Implications for Climate Policy, Thomas Sterner, ed., Resources for the Future Press, 2011. Available at SSRN: https://ssrn.com/abstract=2212939

Kevin A. Hassett

American Enterprise Institute (AEI) ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States
202.862.7157 (Phone)
202.862.7177 (Fax)

Aparna Mathur (Contact Author)

American Enterprise Institute (AEI) ( email )

1150 17th Street, N.W.
Washington, DC 20036
United States
202-868-6026 (Phone)

HOME PAGE: http://www.aei.org/scholar/aparna-mathur/

Gilbert E. Metcalf

Tufts University - Department of Economics ( email )

Medford, MA 02155
United States
617-627-3685 (Phone)
617-627-3917 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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