At 01:05 PM 01/14/2000 +0100, you wrote:
>I suspect road fuel taxes to be regressive. I believe this issue is
>probably well documented. Unfortunately I could not find any data breaking
>down house-hold expenditure on transport by household income class.
There is considerable research on the regressiveness of fuel taxes. I'm
mostly familiar with the North American literature. You may want to review
our report "Evaluating Transportation Equity" at http://www.vtpi.org which
includes a section on this issue.
In general, fuel taxes are considered regressive, although not necessarily
more regressive than most other taxes. For example, fuel taxes may be no
more regressive than property or general sales taxes.
Many studies of fuel tax impacts overlook the fact that lower-income
households tend to purchase less fuel than higher income households. Fuel
consumption is particularly low for the lowest income classes, retired
people, and people with disabilities.
The equity impacts of fuel taxes also depend on the quality of travel
alternatives, since lower-income people will rely more on automobiles when
they have no choice.
See: James Poterba, "Reexaminations of Tax Incidence: Lifetime Incidence
and the Distributional Burden of Excise Taxes," The American Economic
Review, Vol. 79, No. 2, May 1989, p. pp. 325-330.
Sincerely,
Todd Litman, Director
Victoria Transport Policy Institute
"Efficiency - Equity - Clarity"
1250 Rudlin Street
Victoria, BC, V8V 3R7, Canada
Phone & Fax: 250-360-1560
E-mail: [log in to unmask]
Website: http://www.vtpi.org
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