TY  - JOUR
AU  - Sallee,James
TI  - The Taxation of Fuel Economy
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 16466
PY  - 2010
Y2  - October 2010
UR  - http://www.nber.org/papers/w16466
L1  - http://www.nber.org/papers/w16466.pdf
N1  - Author contact info:
James M. Sallee
Harris School of Public Policy Studies
University of Chicago
1155 East 60th Street
Chicago, IL 60637
Tel: 773/316-3480
Fax: 773/702-2286
E-Mail: sallee@uchicago.edu
AB  - Policy-makers have instituted a variety of fuel economy tax policies -- polices that tax or subsidize new vehicle purchases on the basis of fuel economy performance -- in the hopes of improving fleet fuel economy and reducing gasoline consumption. This article reviews existing policies and concludes that while they do work to improve vehicle fuel economy, the same goals could be achieved at a lower cost to society if policy-makers instead directly taxed fuel. Fuel economy taxation, as it is currently practiced, invites several forms of gaming that could be eliminated by policy changes. Thus, even if policy-makers prefer fuel economy taxation over fuel taxes for reasons other than efficiency, there are still potential efficiency gains from reform.
ER  -