Is the Gasoline Tax Regressive?

James Poterba

No 3578, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Claims of the regressivity of gasoline taxes typically rely on annual surveys of consumer income and expenditures which show that gasoline expenditures are a larger fraction of income for very low income households than for middle or high-income households. This paper argues that annual expenditure provides a more reliable indicator of household well-being than annual income. It uses data from the Consumer Expenditure Survey to reassess the claim that gasoline taxes are regressive by computing the share of total expenditures which high-spending and low-spending households devote to retail gasoline purchases. This alternative approach shows that low?expenditure households devote a smaller share of their budget to gasoline than do their counterparts in the middle of the expenditure distribution. Although households in the top five percent of the total spending distribution spend less on gasoline than those who are less well-off, the share of expenditure devoted to gasoline is much more stable across the population than the ratio of gasoline outlays to current income. The gasoline tax thus appears far less regressive than conventional analyses suggest.

Date: 1991-01
Note: PE
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (211)

Published as Is the Gasoline Tax Regressive? , James M. Poterba. in Tax Policy and the Economy, Volume 5 , Bradford. 1991

Downloads: (external link)
http://www.nber.org/papers/w3578.pdf (application/pdf)

Related works:
Chapter: Is the Gasoline Tax Regressive? (1991)
Working Paper: IS THE GASOLINE TAX REGRESSIVE? (1990)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:3578

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w3578

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().