Lifetime Incidence and the Distributional Burden of Excise Taxes

James M. Poterba

NBER Working Paper No. 2833 (Also Reprint No. r1226)
Issued in July 1989
NBER Program(s):   PE

This implies that low-income households in one year have some chance of being higher-income households in other years, and significantly affects the estimated distributional burden of excise taxes. This paper shows that household expenditures on gasoline, alcohol, and tobacco as a share of total consumption (a proxy for lifetime income) are much more equally distributed than expenditures as a share of annual income. From a longer-horizon perspective, excise taxes on these goods are therefore much less regressive than standard analyses suggest.

(155 K)

(90 K)

Published: The American Economic Review, Vol. 79, No. 2, pp. 325-330, (May 1989).

This paper is available as PDF (155 K) or DjVu (90 K) (Download viewer) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX