Incidence of federal and state gasoline taxes

Chouinard, Hayley H.; Perloff, Jeffrey M.

doi:10.1016/j.econlet.2003.10.004

Cited by 95 publications

(70 citation statements)

References 12 publications

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“…The lack of a significant effect of sales tax changes on wholesale prices suggests that they can serve as controls for differential costs across the comparison groups. The result is also consistent with the prior estimates that the tax incidence does not seem to pass on to wholesalers in the market for gasoline (Chouinard and Perloff, 2004).…”

Section: Wholesale Pricessupporting

confidence: 81%

“…Meanwhile, wholesale prices appear unaffected by changes in state tax rates. In another paper, Chouinard and Perloff (2004) also find that state specific taxes fall almost entirely on consumers, especially in states that use relatively little gasoline and have lower elasticity of supply. While the timing of the tax changes were not explored, the results are consistent with less than or full shifting of taxes in gasoline markets.…”

Section: Related Literaturementioning

confidence: 90%

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$2.00 Gas! Studying the effects of a gas tax moratorium

Doyle¹,

Samphantharak

2008

Journal of Public Economics

150

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Despite the considerable attention paid to the theory of tax incidence, there are surprisingly few estimates of the pass-through rate of sales taxes on retail prices. This paper estimates the effect of a suspension and subsequent reinstatement of the gasoline sales tax in Illinois and Indiana on retail prices. Earlier laws set the timing of the reinstatements, providing plausibly exogenous changes in the tax rates. Using a unique dataset of daily gasoline prices at the station level, retail gas prices are found to drop by 3% following the elimination of the 5% sales tax, and increase by 4% following the reinstatements, compared to neighboring states. Some evidence also suggests that the tax reinstatements are associated with higher prices up to an hour into neighboring states, which provides some evidence on the size of the geographic market for gasoline. Effects across different competitive environments are considered as well.This work is preliminary and comments are welcome.

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Section: Wholesale Pricessupporting

confidence: 81%

Section: Related Literaturementioning

confidence: 90%

$2.00 Gas! Studying the effects of a gas tax moratorium

Doyle¹,

Samphantharak

2008

Journal of Public Economics

150

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“…Chouinard and Perloff (2004) estimate the incidence of gasoline taxes and find that a 1¢ increase in the federal tax raises the retail price by 0.47¢, but that an increase in the state gasoline tax by 1¢ raises the retail price by 1.01¢. Doyle and Samphantharak (2008) use a suspension and subsequent reinstatement of the gasoline sales tax in Illinois and Indiana as a natural experiment to estimate the incidence of gasoline taxation and find less than full shifting 17 Estimates on the incidence of general sales taxes find that the amount of tax burden passed on to consumers varies substantially across the type of product used to create the estimates, although many estimates show evidence of substantial over-shifting (see Besley andRosen, 1999 andPoterba, 1996).…”

Section: Explanation Of Tobacco Tax Incidence Resultsmentioning

confidence: 99%

The Incidence of Tobacco Taxation: Evidence from Geographic Micro-Level Data

Hanson¹,

Sullivan²

2009

National Tax Journal

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Abstract:This paper uses a recent increase in the state of Wisconsin's tobacco tax as a natural experiment to measure the economic incidence of tobacco taxation. We estimate the economic incidence of tobacco taxation using micro level data on cigarette prices collected from retail locations in Wisconsin and states that share its border. We find that Wisconsin's $1.00 increase in tobacco tax was over-shifted to consumers; they pay the entire amount of the tax as well as a premium of between $0.08 and $0.17 per pack of cigarettes. We use geo-coded data to test if the incidence of the tobacco tax in Wisconsin is different for retail locations near another state's border (where taxation is different). Stores near the Minnesota border (where the tobacco tax is lower after the law change) lose at least 53 percent and at most 71 percent of the premium. Stores near the Michigan border (where the tobacco tax is higher before and after the law change) gain at least 93 percent and as much as 149 percent of the over-shifting premium depending on the distance in question and the econometric specification.

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“…Not only is US data comparatively good, but there is considerable heterogeneity amongst US states in terms of their regulatory structure, which provides important variation for estimating regression coefficients. Chouinard & Perloff (2004 undertake wide-ranging studies incorporating many differences in markets and regulatory structures in the US including crude prices, heating degree days (to assess the impacts of special fuels required in cold weather), monthly and seasonal dummies, demographic factors, taxes and fuel emissions standards. At the national level, they find that only crude prices and seasonal dummies are important.…”

Section: Regulationmentioning

confidence: 99%