"We use monthly gasoline price data for all 50 U.S. states over the period 1984-1999 to examine the incidence of state gasoline excise taxes. Our estimation results indicate full shifting of gasoline taxes to the final consumer. In addition, although we find that gasoline retail prices demonstrate asymmetric responses to changes in "gasoline wholesale prices", we find only limited evidence of such behavior for retail prices with respect to "gasoline excise taxes. "Finally, we find that gasoline markets in urban states exhibit full shifting, but those in rural states (with less competition) demonstrate somewhat less than full shifting". ("JEL "H22) Copyright (c) 2008 Western Economic Association International.

The standard assumption underlying the incidence of tax evasion is that the beneficiaries are those who successfully evade their taxes. However, this assumption is likely to be incorrect or at least incomplete. Those who benefit from tax evasion are not necessarily the individuals actually engaging in evasion; indeed, these participants may not benefit at all. In many situations tax evasion is similar to a "tax advantage" generated by the tax laws. If there is any advantage at all, we would expect replication and competition (if possible) to work toward the elimination of this advantage. Put differently, a general equilibrium process of adjustment should occur through changes in the relative prices of both commodities and factors of production as resources move into and out of the relevant activities, and these changes should tend to eliminate (or at least reduce) the tax advantage of tax evasion. In this paper we analyze these incidence effects, using a computable general equilibrium model of an economy with a formal (and taxed) sector and an informal (and untaxed) sector. We incorporate the element of uncertainty in an individual's decision to evade. Importantly, we also allow for varying degrees of mobility via competition/entry across sectors in the economy in order to examine how much of the tax advantage is retained by the initial evaders and how much is shifted via factor and commodity price changes stemming from mobility. Our simulation results show that the evading household's post-evasion welfare is only 0.7-3.4 percent higher than the post-tax welfare if it had fully complied with taxes. Further, the evading household keeps 75.3-83.2 percent of this initial increase in welfare, while 16.8-24.7 percent of this initial gain is competed away as a result of mobility that reflects competition and entry into the informal sector. The compliant household's welfare increases by 58.8-106.5 percent with competition and entry in the informal sector. Consequently, the evading household benefits only marginally from successful evasion, and this advantage diminishes with mobility via competition/entry in the informal sector.

No abstract

This article examines the interrelationships between public spending composition and Uganda’s development goals including economic growth and poverty reduction. The authors utilize a dynamic computable general equilibrium model to study these interrelationships. These results demonstrate that public spending composition does indeed influence economic growth and poverty reduction. In particular, the authors show that improved public sector efficiency coupled with reallocation of public expenditure away from the unproductive sectors such as public administration and security to the productive sectors including agriculture, energy, water, and health leads to higher gross domestic product growth rates and accelerates poverty reduction. Moreover, the rate of poverty reduction is faster in rural households relative to the urban households. A major contribution of this article is that investments in agriculture, particularly with a view to promoting value addition and investing in complementary infrastructure (e.g., roads and affordable energy), contribute to higher economic growth rates and also accelerate the rate of poverty reduction.

No abstract