Are Commodity Taxes Regressive? Evidence from Sweden

Douglas Lundin
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Douglas Lundin: Department of Economics, Postal: Stockholm School of Economics, Box 6501, SE-113 83 Stockholm, Sweden

No 1997:9, Working Paper Series from Uppsala University, Department of Economics

Abstract: The distributional consequences of commodity taxes have become more important as industrialized countries have started to raise more revenue using these taxes. In this paper the distributional consequences of commodity taxes are evaluated using both disposable income and total expenditure as measures of household well-being. Using Swedish household expenditure data from 1988 and 1992, I find that the overall effect of commodity taxation has been to redistribute welfare from the poor to the rich. I find that almost all individual taxes are regressive, but only a few are significantly redistributive - the taxes on energy, food and consumer goods. Furthermore, the redistributive effect of energy taxation increased sharply after the 1990-91 tax reform.

Keywords: commodity taxes; welfare distribution; vertical and horizontal equity (search for similar items in EconPapers)
JEL-codes: D31 D63 H23 (search for similar items in EconPapers)
Pages: 19 pages
Date: 1998-03-10
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:uunewp:1997_009

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