Gas taxes: Progressive or Regressive

Thomas Sterner

Work In progress Not for citation

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0,8

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1,2

1,4

1,6

1,8

0 0,05 0,1 0,15 0,2

Australia

Austria

Belgium

Canada

Denmark

Finland

France

Germany

Greece

Ireland

Italy

Japan

Luxembourg

Netherland

New Zealand

Norway

Portugal

Spain

Sweden

Switzerland

United Kingdom

USA

Ap

pen

dix 1.

Portugal

Italy

USA

CanadaAustralien

Transport Fuel Use in OECDGtons fuel (and ~C*(12/14))

Real

UK price

s

US price

sFuel use 1,13 0,72 1,47

-36% +30%

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

1 2 3 4 5 6 7 8 9 10

Inkomstdeciler

Ska

tteb

örd

a (

an

de

l ska

tt a

v in

kom

st i

%)

Indirekt skatt

Direkt skatt

Gasoline /Diesel taxes by income decile

Gasoline /Diesel taxes by Expenditure decile

0,0%

0,5%

1,0%

1,5%

2,0%

2,5%

3,0%

1 2 3 4 5 6 7 8 9 10

Inkomstdeciler

Ska

tteb

örd

a (

an

de

l ska

tt a

v in

kom

st i

%)

Indirekt skatt

Direkt skatt

0

10

20

30

40

50

60

70

80

90

100

0 10 20 30 40 50 60 70 80 90 100Ac kumulera d % a v inkomst

Ack

um

ule

rad

% a

v sk

atteb

örd

a

B ens ins katt P roportionell linje

Suits index

Adaptation

• West and Williams: for USA• More regressive with Income than

Expenditures• Less regressive when you take adaptation into

account • Even less regressive with individual el• Progressive with EV - partic with refunding of

revenue.

Tax Reform more possibilities

S Africa

Figure 1: Fuel expenditure as a share of total household expenditure

0

0.5

1

1.5

2

2.5

3

3.5

4

1 2 3 4 5 6 7 8 9 10

Poorest Income decile Richest

Perc

en

tag

e e

xp

en

dit

ure

sh

are

of

fuel

Public transport expenditures as share of total household expenditures

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

1 2 3 4 5 6 7 8 9 10

Household income decile

Pu

blic

tra

nsp

ort

sh

are

of t

ota

l exp

._

0.00

0.02

0.04

0.06

0.08

0.10

0.12

0.14

0.16

1 2 3 4 5 6 7 8 9 10

Household income decile

Pri

vate

tra

nsp

ort

sh

are

of

tota

l exp

.

Private transport expenditures as share of total household

expenditures

Transport fuel expenditures as share of total household

expenditures

0.00

0.02

0.04

0.06

0.08

0.10

0.12

1 2 3 4 5 6 7 8 9 10

Household income decile

Tra

nspo

rt fu

el s

hare

of

tota

l exp

.

Mexico

0

2

4

6

8

10

12

14

I II III IV V VI VII VIII IX X

%

Carros y gasolina Transporte público

Including use of diesel in PubTr

Roughly 25% of bus fare is diesel..Add shares from private fuel Tax in Mexico proportional

Gasoline taxes Regressive in INDIA?

all_fuel

0

1

2

3

4

5

6

7

1 2 3 4 5 6 7 8 9 10

deciles

sh

are

s

all_fuel

Table1: Budget shares of fuels (Transport + Cooking and Lighting Fuels)

India contd.

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

1 2 3 4 5 6 7 8 9 10

deciles

bu

dg

et s

har

e

trans_fuel

PT

tot_tran

Taking indirect effects into account

Incidence of Fuel Tax (Rural)

0

12

3

45

6

78

9

1 2 3 4 5 6 7 8 9 10

Consumption Deciles

Percen

t o

f B

ud

get

Coal

PET

GAS

Kerosene

Fuel

Urban

Incidence of Fuel Taxes (Urban)

0

2

4

6

8

10

12

1 2 3 4 5 6 7 8 9 10

Consumption Deciles

Perc

en

t o

f B

ud

get

COAL

PET

GAS

Kerosene

Fuel

Comparative work

• Many national articles• One comparative article• Maybe a book.

• policy impact• publications