The Distributional Implications of a Tax on Gasoline.

by James P. Stucker


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Prepared for the 1975 meeting of the Western Economic Association. In the continuing debate over the advantages and disadvantages of a gasoline tax as opposed to a general petroleum tax or some form of rationing of gasoline or other petroleum products, the question arises whether a gasoline tax is regressive--whether it falls more heavily on poor families than on families who are better off. The author's analysis shows that the gas tax is regressive, a conclusion that is at variance with a number of other recent studies. He estimates that the income elasticity of gasoline consumption by households is at least 1.0 for incomes around the $5,000 level, 0.7 for incomes around the $10,000 level, and about 0.5 for incomes in the $15,000 to $25,000 range. 26 pp. Ref. (JDD)

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