Fuel Tax Incidence and Supply Conditions

Marion, Justin; Muehlegger, Erich

doi:10.3386/w16863

Cited by 62 publications

(67 citation statements)

References 30 publications

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“…Contrary to that strand of work, our context requires considering both sides of the market. There has been a recent revival of interest in estimating the incidence of specific taxes/transfers (e.g., Doyle Jr. and Samphantharak, 2008;Mishra et al, 2008;Hastings and Washington, 2010;Marion and Muehlegger, 2011). Real estate tax is more complicated due to non-homogeneity of goods traded, and the closest analogue is work on incidence of income/payroll taxes or credits (Rothstein, 2010;Saez et al, 2011).…”

Section: Introductionmentioning

confidence: 99%

Mansion Tax: The Effect of Transfer Taxes on the Residential Real Estate Market

Kopczuk¹,

Munroe²

2015

American Economic Journal: Economic Policy

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Houses and apartments sold in New York and New Jersey at prices above $1 million are subject to the so-called 1% "mansion tax" imposed on the full value of the transaction. This policy generates a discontinuity (a "notch") in the overall tax liability. We rely on this and other discontinuities to analyze implications of transfer taxes in the real estate market. Using administrative records of property sales, we find robust evidence of substantial bunching and show that the incidence of this tax for transactions local to the discontinuity falls on sellers, may exceed the value of the tax, and is not explained by tax evasion (although supply-side quality adjustments may play a role). Above the notch, the volume of missing transactions exceeds those bunching below the notch. Interpreting our results in the context of an equilibrium bargaining model, we conclude that the market unravels in the neighborhood of the notch: its presence provides strong incentive for buyers and sellers in the proximity of the threshold not to transact. This effect, the identification and recognition of which is novel to this paper, is above and beyond the standard extensive margin response. When present, unraveling affects interpretation and estimation of bunching estimates. Finally, we show that the presence of the tax affects how the market operates away from the threshold-taxation increases price reductions during the search process and in the bargaining stage and weakens the relationship between listing and sale prices. We interpret these results as demonstrating that taxation affects the ultimate allocation in this search market. Short Abstract (100 words)Using discontinuities in housing transaction taxes in New York and New Jersey we find robust price bunching. Incidence for transactions local to the notch falls on sellers, with no evidence of evasion. The volume of missing transactions above the notch exceeds those bunching (beyond the usual extensive-margin response), indicating incentives for buyers and sellers not to transact (market unravels). The possibility of unraveling affects interpretation and estimation of bunching.Away from the threshold, we find increased discounts and weaker relationship between listing and sale prices. Equilibrium bargaining framework highlights that taxation affects the ultimate allocation in this search market.

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Section: Introductionmentioning

confidence: 99%

Mansion Tax: The Effect of Transfer Taxes on the Residential Real Estate Market

Kopczuk¹,

Munroe²

2015

American Economic Journal: Economic Policy

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“…They report average long‐ and short‐run price elasticities for the US of –0.62 (high‐energy‐intensity sectors) and −0.83 (low‐energy‐intensity sectors) respectively. However, other recent papers – in particular, Marion and Muehlegger () and Jametti, Redonda and Sen () – suggest that taxes on energy products tend to be at least partially shifted onto final prices, the same as taxes on final consumption. Against this background, we will assume in the baseline that companies do not bear the cost of energy taxes, such that β e = 0, while considering as an alternative the case where β e = 1.…”

Section: Literature Review On the Parameters Used For The Multi‐factomentioning

confidence: 99%

Multi‐Factor Effective Corporate Taxation, Firms’ Mark‐Ups and Tax Incidence: Evidence from OECD Countries

2018

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This paper provides novel evidence on the multi‐factor effective marginal tax rates (EMTRs) for a sample of 17 OECD countries and 11 manufacturing sectors. We use a single framework encompassing capital, labour and energy taxes. Our cross‐country/cross‐sector approach allows us to analyse the contributions of these input factors to the effective tax borne by firms, taking explicitly into account their degree of substitution, their tax incidence and the role of mark‐ups. We find that the labour tax plays a particularly important role in the overall level of the EMTR and that the presence of mark‐ups can significantly alter the levels of the multi‐factor EMTR, although without significantly altering the ranking of countries. We also find that the bulk of the variation in EMTRs is across countries, rather than across sectors (within countries).

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“…20 Then, a Pigouvian tax at that rate levied on the carbon in gasoline and diesel fuel would increase prices by approximately 40-50 cents per gallon. A number of papers on developed countries (e.g., Marion and Muehlegger (2011), or Chouinard and Perloff (2004)) find that consumers bear the vast majority of gasoline taxes and input cost changes in the short-run. Demand for transportation fuels is inelastic in the short-run, allowing producers to shift the burden of taxes or input cost changes almost fully onto consumers.…”

Section: B Fossil Fuel Production and Tradementioning

confidence: 99%

Who Bears the Economic Costs of Environmental Regulations?

Fullerton¹,

Muehlegger²

2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Public economics has a well-developed literature on tax incidence -the ultimate burdens from tax policy. This literature is used here to describe not only the distributional effects of environmental taxes or subsidies but also the likely incidence of non-tax regulations, energy efficiency standards, or other environmental mandates. Recent papers find that mandates can be more regressive than carbon taxes. We also describe how the distributional effects of such policies can be altered by various market conditions such as limited factor mobility, trade exposure, evasion, corruption, or imperfect competition. Finally, we review data on carbonintensity of production and exports around the world in order to describe implications for effects of possible carbon taxation on countries with different levels of income per capita. Terms of use: Documents inJEL-Codes: H220.

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Fuel Tax Incidence and Supply Conditions

Cited by 62 publications

References 30 publications

Mansion Tax: The Effect of Transfer Taxes on the Residential Real Estate Market

Mansion Tax: The Effect of Transfer Taxes on the Residential Real Estate Market

Multi‐Factor Effective Corporate Taxation, Firms’ Mark‐Ups and Tax Incidence: Evidence from OECD Countries

Who Bears the Economic Costs of Environmental Regulations?

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