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| Parry, Ian W.H.; Small, Kenneth A.. |
| This paper develops an analytical framework for assessing the second-best optimal level of gasoline taxation taking into account unpriced pollution, congestion, and accident externalities, and interactions with the broader fiscal system. We provide calculations of the optimal taxes for the US and the UK under a wide variety of parameter scenarios, with the gasoline tax substituting for a distorting tax on labor income. Under our central parameter values, the second-best optimal gasoline tax is $1.01/gal for the US and $1.34/gal for the UK. These values are moderately sensitive to alternative parameter assumptions. The congestion externality is the largest component in both nations, and the higher optimal tax for the UK is due mainly to a higher assumed... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Gasoline tax; Pollution; Congestion; Accidents; Fiscal interactions; Public Economics; H21; H23; R48. |
| Ano: 2004 |
URL: http://purl.umn.edu/10461 |
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| Parry, Ian W.H.. |
| This paper discusses the appropriate balance between traditional gasoline taxes and charging by the mile, focusing mainly on economic efficiency considerations. We begin with a brief discussion of the five major passenger vehicle externalities of concern-local pollution, greenhouse warming, oil dependency, traffic congestion, and traffic accidents-summarizing evidence on the dollar value of the externalities for passenger vehicles in the United States. We then discuss how much fuel taxation might be justified to account for these externalities, as well as how much taxation might be appropriate on fiscal grounds, assuming per-mile charges are unavailable. Finally, we discuss to what extent fuel taxation should be replaced with per-mile charges. |
| Tipo: Working or Discussion Paper |
Palavras-chave: Gasoline tax; Mileage tax; Motor vehicle externalities; Fiscal interactions; Public Economics; H21; H23; R48. |
| Ano: 2005 |
URL: http://purl.umn.edu/10805 |
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| Parry, Ian W.H.. |
| This paper provides simple formulas for adjusting the costs of carbon taxes and tradable carbon permits to account for interactions with preexisting tax distortions in the labor market. Both policies reduce labor supply as they increase product prices and reduce real household wages; the resulting efficiency losses in the labor market can be substantial relative to partial equilibrium abatement costs. However, much of this added cost can be offset-and perhaps more than offset when additional distortions from the tax system are considered-if revenues from carbon taxes or auctioned permits are used to reduce distortionary taxes. Consequently, there can be a strong case on efficiency grounds for using carbon taxes or auctioned permits over grandfathered... |
| Tipo: Working or Discussion Paper |
Palavras-chave: Carbon taxes; Carbon permits; Fiscal interactions; Revenue recycling; Environmental Economics and Policy; Q28; H21; H23. |
| Ano: 2003 |
URL: http://purl.umn.edu/10509 |
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