Gas prices,beer taxes and GDL programmes: effects on auto fatalities among young adults in the US

Efforts to reduce teenage driving fatalities can be categorized as: enhancing driving skills, constraining driving behaviour and limiting the exposure of young drivers to the road. This article uses state-year specific Fatality Analysis Reporting System (FARS) data on the motor vehicle fatalities of young adults aged 15–24 to estimate the effects of gasoline prices, beer taxes and the enactment of Graduated Drivers License (GDL) programmes over the 1985–2006 period. Results indicate that a 10% increase in gasoline prices reduce fatalities by 3.2–6.2%. The largest percentage reductions occurred among 15- to 17-year-old drivers. 10% higher beer taxes were estimated to reduce motor vehicle fatalities among young drivers by approximately 1.3%. In this case, there was virtually no effect on 15- to 17-year-old drivers. Finally, the introduction of more restrictive GDL programmes, those with a 6-month learner's permit phase and subsequent limits on early nighttime driving or on the number of passengers, reduced fatalities among 15- to 17-year-old drivers by 24%. The effects on 18- to 21-year-old drivers were smaller and the weakest GDL programmes had no effect on fatalities.     

A dynamic general equilibrium model of driving,gasoline use and vehicle fuel efficiency

The paper constructs a dynamic general equilibrium model to study the endogenous determination of gasoline use, driving and vehicle fuel efficiency. Before vehicles are produced, their fuel efficiency can be chosen optimally. Once produced, their fuel efficiency cannot be changed. The model generates endogenously different short-run and long-run price elasticities of gasoline use, with their magnitudes well within the region of plausible estimates in the empirical literature. The paper shows that although raising gasoline taxes and tightening the CAFE standard both reduce gasoline use in the long run, they are different in terms of the transmission mechanism, magnitudes of responses and dynamic paths of key endogenous variables.     

The Effect of Gasoline Taxes and Public Transit Investments on Driving Patterns

This paper analyzes how driving patterns are affected by gasoline taxes and the availability of a substitute for driving—public transportation. We develop a measure of transportation substitutability based on the difference between individuals’ predicted commute times by private and public transit, conditional upon their demographic characteristics and geographic location. Improved substitutability decreases annual vehicle miles traveled (VMT) by inducing modal shifts to public transit, though gasoline taxes are found to have a much larger impact on VMT. Our results imply that a policy that raises gasoline taxes and recycles the revenues into public transit improvements can have even larger impacts on driving patterns than either policy alone.     

Optimal taxation and cross-price effects on labor supply: Estimates of the optimal gas tax

This study estimates parameters necessary to calculate the optimal second-best gasoline tax, most notably the cross-price elasticity between gasoline and leisure. Prior theoretical work indicates the importance of this elasticity, but despite this, almost none of the prior studies of commodity taxation (and none of the studies on second-best environmental regulation) actually estimate it. Using household data, we find that gasoline is a relative complement to leisure, and thus that the optimal gasoline tax is significantly higher than marginal damages-the opposite of the result suggested by the bulk of the prior literature. Indeed, even if there were no externalities at all associated with gasoline, the optimal tax rate would still be almost equal to the average gas tax rate in the U.S. Following this approach to estimate cross-price elasticities with leisure could strongly influence estimates of optimal rates for other important commodity or pollution taxes.     

Equilibrium capital taxation in open economies under commitment

This paper analyzes equilibrium capital taxation in open economies with strategic interaction in a neo-classical growth model. Under perfect commitment, I show that non-cooperative capital taxes are zero in the long run for a large open economy, thereby generalizing the result previously established only for the special cases of a closed and a small open economy. This does not represent a race to the bottom, though, since the result is independent of the degree of capital mobility, the number of countries, or a country׳s size relative to the rest of the world. Moreover, when countries cooperate, they still set capital taxes to zero in the long run. These outcomes are robust to different equilibrium specifications, the inclusion of endogenous government spending, and heterogeneous agents and non-linear labor income taxation. Governments find it optimal to implement the efficient capital allocation in the long run, both in a closed and an open economy; this trumps incentives to tax foreigners’ domestic capital holdings by raising capital taxes and attracting capital from abroad by lowering capital taxes.     

Optimal taxation of car ownership, car use and public transport: Insights derived from a discrete choice numerical optimization model

We formulated and numerically evaluated a model of car ownership, car use and public transport use for peak and off-peak hours of the day. The model was used to study the optimal tax structure for passenger transport in Belgium, with special emphasis on the optimal tax treatment of diesel versus gasoline cars. We obtained a number of interesting results. First, if the government can set all fixed and variable transport taxes optimally, the higher marginal external cost of diesel use implies that the optimal tax per kilometre for the use of a diesel car is higher than for the use of a gasoline car. Moreover, high congestion implies that the taxes on car use in the peak period are more than twice their current levels. However, the optimal tax on ownership of a diesel car is some 200€ below its current level. Second, if the government uses kilometre taxes that do not differentiate between fuel types, the optimal ownership tax on a diesel car is twice as high as the tax on a gasoline car. Furthermore, if political constraints restrict user taxes to their current levels, we find that optimal ownership taxes on diesel cars double, whereas those on gasoline cars rise by 30%. Finally, subsidies to public transport are found to be optimal as long as variable car taxes are not differentiated between periods.     

Price Adjustments by a Gasoline Retail Chain

We use daily data to examine price responses in the Swedish gasoline market to changes in the Rotterdam spot price, exchange rates and taxes. The distribution of price adjustments by a leading retail chain, for the period January 1980 to December 1996, is symmetric with no small adjustments. An error correction model shows that, in the short run, prices gradually move towards the long-run equilibrium in response to cost shocks. There is some evidence that, also in the short run, prices are stickier downwards than upwards. Prices respond more rapidly to exchange rate movements than to the spot market price. Our analysis emphasizes that to fully understand price adjustments it is necessary to examine data sets where the sample frequency at least matches that of price adjustments.
JEL classification: C 22; E 31; F 14; L 71     

Optimal oil taxation in a small open economy

The international oil market has been very volatile over the past three decades. In industrialized economies, especially in Europe, taxes represent a large fraction of oil prices and governments do not seem to react to oil price shocks by using oil taxes strategically. The aim of this paper is to analyze optimal oil taxation in a dynamic stochastic general equilibrium model of a small open economy that imports oil. We find that in general it is not optimal to distort the oil price paid by firms with taxes, neither in the long run nor over the business cycle. The general result could be reversed depending on environmental considerations and available fiscal instruments. We provide simulations to illustrate the optimal response to shocks in such cases.     

Environmental quality,the macroeconomy,and intergenerational distribution

The paper studies the dynamic allocation effects and intergenerational welfare consequences of environmental taxes. To this end, environmental externalities are introduced in a Blanchard–Yaari overlapping generations model of a small open economy. A rise in environmental taxes – taking into account pre-existing distortionary taxes and endogenous labor supply – is shown to yield an efficiency gain if agents care enough for the environment. The benefits are unevenly distributed across generations because agents are heterogeneous in their capital ownership. An accompanying debt policy can be designed – prescribing debt accumulation at impact and debt redemption in the new steady state – to ensure everybody gains to the same extent. With lump-sum recycling of environmental tax revenue, aggregate employment is unaffected in the short run, but falls in the long run. Furthermore, it raises environmental quality more in the long run than in the short run. Recycling revenue through a cut in labor taxes, however, is shown to yield a rise in employment in the short run, which disappears during transition. In the new steady state, environmental quality is higher at the expense of a lower level of employment.     

Social Comparisons and Optimal Taxation in a Small Open Economy

In this paper, we analyze how international capital mobility affects the optimal labor and capital income tax policy in a small open economy when consumers care about relative consumption. The main results crucially depend on whether the government can tax returns on savings abroad. If the government can use flexible residence‐based capital income taxes, then the optimal policy rules from a closed economy largely carry over to the case of a small open economy. If it cannot, then capital income taxes become completely ineffective. The labor income taxes must then indirectly also reflect the corrective purpose that the absent capital income tax would have had.     

环境税征收、社会责任承担与企业绿色创新*

近年来,我国经济发展面临资源环境的约束问题愈发凸显,推进经济高质量发展迫切需要传统工业企业实现绿色创新转型升级,而环境税征收和企业社会责任承担分别作为一种基于外部市场激励型和内部自主激励型的重要工具,两者能否有效发挥激励协同效应？本文以2010—2018年我国沪深A股工业类上市公司为研究样本,实证检验了环境税征收与企业社会责任承担的交互作用对企业绿色创新的影响,研究结果发现：（1）环境税征收与社会责任承担发挥着显著正向激励协同效应,环境税征收强度越大则越有利于促进企业绿色创新能力提升,且该正相关关系将随着企业社会责任承担水平提升而得到增强。（2）企业社会责任承担水平越高并不利于企业绿色创新能力提升,但该负相关关系将随着环境税征收强度增加而受到抑制。（3）进一步研究发现以上效应主要存在于大规模企业、高成长性企业、研发能力较强企业,以及市场化程度较高地区和东部地区。（4）相对于非国有企业,环境税征收及其与社会责任承担的正向交互效应显著存在于国有企业之中。上述研究结论丰富了企业绿色创新驱动因素和环境税征收经济后果的相关文献,对于新时期如何有效发挥企业绿色创新激励协同机制,以助推我国传统工业企业顺利实现绿色创新转型升级等有重要启示。     

Would it have paid to be in the eurozone?

Giving up an independent monetary policy and a flexible exchange rate are the key aspects of joining a monetary union. In this paper we analyse how joining the euro area would have affected the Polish business cycle during the recent financial crisis. To this end we construct a small open economy DSGE model and estimate it for Poland and the euro area. Then we run a counterfactual simulation, assuming Poland's euro area accession in 1q2007. The results are striking — volatilities of GDP and inflation increase substantially. In particular, had Poland adopted the euro, GDP growth would have oscillated between − 6% and + 9% (− 9% to + 11% under more extreme assumptions) instead of between 1% and 7%. We conclude that during the analysed period independent monetary policy and, in particular, the flexible exchange rate played an important stabilizing role for the Polish economy.     

MACROECONOMIC AND REDISTRIBUTIONAL EFFECTS OF CONSUMPTION TAXES IN THE USA*

This paper studies the effect of an increase in consumption taxes using a dynamic general equilibrium model of overlapping generations calibrated to the US economy. When the proceeds are used to reduce income taxes, the reform raises the aggregate capital and labour supply in the long run. Workers increase labour supply immediately in response to the reform, while consumption rises only gradually. The tax reform also transfers wealth from old consumers to young consumers. As a result, while future generations experience significant welfare gains, current generations, particularly old consumers, tend to experience sizable welfare losses. When the proceeds are used for a lump‐sum transfer, the aggregate capital and labour both decrease in the long run. This reform is welfare‐improving for the current low‐income households.     

TAXES, GROWTH AND THE CURRENT ACCOUNT TICK-CURVE EFFECT

This paper examines the dynamic and long run effects of a shift from income taxes to consumption taxes in a growing small open economy. We introduce a government sector that maintains a balanced budget and expenditure at a constant proportion of domestic income to a small open economy Swan-Solow model. Our framework provides a previously unidentified dynamic effect that is robust to endogenising the savings rate. Lowering the income tax rate promotes economic growth and has a tick-curve effect on the current account balance, characterised by instantaneous deterioration, a period of recovery and gradual convergence to an improved position in the long run.     

Horizontal and vertical indirect tax competition: Theory and some evidence from the USA

This paper provides a simple but general theoretical framework for analyzing simultaneous vertical and horizontal competition in excise taxes, which includes several previous contributions as special cases. It allows for both elastic individual demand for the taxed good, and cross-border shopping (and smuggling). It then estimates equations informed by the theory on a panel of US state and federal excise taxes on cigarettes and gasoline. The results are generally consistent with the theory, when the characteristics of the markets for the goods are taken into account. Taxes in neighboring states have a significant and large effect in the case of cigarettes. The possibility of smuggling cigarettes from low tax states also plays a role. In the case of gasoline, taxes in neighboring states do not play a significant role; however, there is evidence in this case of vertical competition.     

Debt financing of public investment: On a popular misinterpretation of “the golden rule of public sector borrowing”

In this paper I challenge the proposition that the golden rule of public sector borrowing is consistent with the principle of intertemporal allocative efficiency, in the sense that growth-enhancing public investment justifies a structural public deficit. I demonstrate that in the long run the social opportunity cost of debt-financed public investment exceeds the social opportunity cost of tax financed public investments. This result holds if the social rate of time preference is lower than the interest rate on government borrowing. Thus a benevolent government would use taxes to finance public investment. In the short run, debt financing is justified if public investment has a considerable growth effect on private consumption. This requires a corresponding initial undersupply of public capital.     

Shifting Taxes from Labor to Consumption: More Employment and more Inequality?

This paper investigates the effect of shifting taxes from labor income to consumption on labor supply and the distribution of income in Germany. We simulate stepwise increases in the value‐added tax (VAT) rate, which are compensated by revenue‐neutral reductions in income‐related taxes. We differentiate between the personal income tax (PIT) and social security contributions (SSC). Based on a dual data base and a microsimulation model of household labor supply behavior, we find a regressive impact of such a tax shift in the short run. When accounting for labor supply adjustments, the adverse distributional impact persists for PIT reductions, while the overall effects on inequality and progressivity become lower when payroll taxes are reduced. This is partly due to increases in aggregate labor supply, resulting from higher work incentives.     

THE MACROECONOMIC EFFECTS OF A SWITCH FROM DIRECT TO INDIRECT TAXES: AN EMPIRICAL ASSESSMENT

This paper investigates the macroeconomic effects of switching the tax burden from direct to indirect taxes in an empirical model based on 22 OECD countries. The Engle-Yoo three step procdure is employed to estimate both the short and long run effects of such a tax switch. The results reveal that a switich from direct to indirect taxes is likely to generate efficiency gans in the short run which lead to higher levels of aggragate output. However, for the majority of countries in the sample the tax changes have no impact on the level of economic activity in the long run.     

Carbon tax pass-through in Canadian retail gasoline markets

A carbon tax's pass-through is one factor influencing its effectiveness in internalizing the externality created by greenhouse gas emissions. This paper measures the pass-through of carbon taxes introduced in retail gasoline markets of four Canadian provinces that did not meet the carbon pollution pricing federal benchmark stringency requirements. Those four provinces are Saskatchewan, Manitoba, Ontario and New Brunswick. Using daily retail gasoline prices for 40 treated cities and nine control cities we find the pass-through rates are city-specific and vary from 0% to over 140%. City-specific pass-through rates imply that estimations at a higher level of geographical aggregation assume homogeneous effects where heterogeneous effects might be present. Our results also suggest it would be difficult for a government to impose an optimal and nationwide carbon tax on automotive greenhouse gas emissions. Although the degree of competition can explain city-specific pass-through rates, it cannot explain over-shifting. Over-shifting can be explained, however, by the demand functional form.     

中国的税收结构、经济增长与收入分配

本文通过实证分析,说明在中国现阶段的经济制度和税收结构下,流转税类、所得税类、资源税类和财产税类份额的增加会扩大资本所有者和劳动所有者市场收入的分配差距,而特定目的税类和行为税类份额的增加则会缩小资本要素与劳动要素的收入分配差距。同时,所得税类、资源税类和行为税类份额的增加会提高经济的总体规模,而财产税类和特定目的税类份额的增加则会降低经济的总体规模。这说明在现阶段的中国经济中,有必要对所得税类和财产税类进行结构和职能两方面改革,使这两种税能够体现社会公平的税收职能。单纯地从税收结构的数量调整上讲,目前应提高所得税类的税收份额,并降低财产税类(即房地产税)的税收份额。