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June 22, 2009
Series Editor: Ian Parry
Managing Editor: Felicia Day
Assistant Editors: John Anderson and Adrienne Foerster
Welcome to the RFF Weekly Policy Commentary, which is meant to provide an easy way to learn about important policy issues related to environmental, natural resource, energy, urban, and public health problems.
Gasoline taxes are easily the most efficient policy to reduce gasoline use. However, the federal gasoline tax has not been increased since 1993, and inflation has eroded its real value over time. One common argument against raising fuel taxes is that they might impose a disproportionate burden on low-income families. In this week's commentary, Sarah West takes a careful look at the validity of this argument.
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Should Distributional Considerations Hold Up Higher Gasoline Taxes?
By Sarah E. West
Further Reading: Burtraw, Dallas, Richard Sweeney, and Margaret Walls. 2009. The Incidence of Climate Change Policy: Alternative Uses of Revenues from a Cap-and-Trade Auction. Discussion paper 09-17. Washington, DC: Resources for the Future. Parry, Ian W.H., Margaret Walls, and Winston Harrington. 2007. Automobile Externalities and Policies. Journal of Economic Literature XLV: 374–400. West, Sarah. 2004. Distributional Effects of Alternative Vehicle Pollution Control Policies. Journal of Public Economics 88: 735–757. West, Sarah E. and Roberton C. Williams III. 2004. Estimates from a Consumer Demand System: Implications for the Incidence of Environmental Taxes. Journal of Environmental Economics and Management 47: 535–558. West, Sarah E. and Roberton C. Williams III 2007. Optimal Taxation and Cross-Price Effects on Labor Supply: Estimates of the Optimal Gas Tax. Journal of Public Economics, 91: 593–617. |
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Views expressed are those of the author.
RFF does not take institutional positions on legislative or policy questions.
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