Lifetime Incidence and the Distributional Burden of Excise Taxes

19 Pages Posted: 3 Jul 2007

See all articles by James M. Poterba

James M. Poterba

National Bureau of Economic Research (NBER); Massachusetts Institute of Technology (MIT) - Department of Economics

Date Written: 1989

Abstract

This implies that low-income households in one year have some chance of being higher-income households in other years, and significantly affects the estimated distributional burden of excise taxes. This paper shows that household expenditures on gasoline, alcohol, and tobacco as a share of total consumption (a proxy for lifetime income) are much more equally distributed than expenditures as a share of annual income. From a longer-horizon perspective, excise taxes on these goods are therefore much less regressive than standard analyses suggest.

Suggested Citation

Poterba, James M., Lifetime Incidence and the Distributional Burden of Excise Taxes (1989). NBER Working Paper No. w2833. Available at SSRN: https://ssrn.com/abstract=447240

James M. Poterba (Contact Author)

National Bureau of Economic Research (NBER) ( email )

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Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

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